Question on: JAMB Economics - 2024
Which of the following is a disadvantage of localization of industries?
A
Creating structural unemployment
B
Reducing cost of production
C
Encouraging the growth of skilled labour
D
Encouraging subsidiary industries
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Correct Option: D
The disadvantage of the localization of industries is the potential to create structural unemployment. Here's why:
- Localization and Structural Unemployment: When industries concentrate in a specific geographical area, it can lead to structural unemployment. If the industry declines or changes (e.g., due to technological advancements or a shift in consumer demand), the specialized skills of the local workforce may become obsolete, and job opportunities may disappear. Workers may find it difficult to transition to other industries, especially if those industries are located elsewhere.
Other options:
- B. Reducing cost of production: Localization can reduce production costs through economies of scale and the availability of specialized resources.
- C. Encouraging the growth of skilled labour: Localization often encourages the development of a skilled labor force as workers gain experience and training in the concentrated industries.
- D. Encouraging subsidiary industries: Localization stimulates the growth of supporting industries and services.
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