In some countries, government are encouraging industries and businesses to move to regional areas outside the big cities. Do the advantages of this trend outweigh the disadvantages?

Globally, many governments are incentivising their industrialists to move their bases to smaller towns. Some of the key benefits of doing

this

include reduced

labour

cost

, as well as the availability of

land

at a lesser price.

However

, the lack of

infrastructure

and the people not being skilled in smaller towns more than nullify the gains achieved of making

such

a move.

To begin

with, one of the key advantages of shifting industries to regional

areas

is the reduction in employee

cost

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costs

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.

Secondly

, a piece of

land

costs much less in a village when compared to a metro city. Organisations can make their businesses more profitable by capitalising on the lower employee expenses in rural

areas

.

Similarly

, their overhead expenses

also

reduce as the price per square feet of

a

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land

in a village is extremely less.

For example

, Tata

motors

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Motors

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shifted its manufacturing facility to Singur, a small town in Gujarat, from Jamshedpur citing more benefits of reduction in

cost

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the cost

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of

labour

and

land

.

However

, one major drawback is that regional

areas

do not have

world-class

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the world-class

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infrastructure

that is

required to support the production operations.

In addition

to that, the people employed might not possess the required

skillset

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skill set

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to perform their jobs efficiently. Warehousing and

last

-mile connectivity are some of the key facilities which the villages lack for running any business.

Furthermore

, people being employed might not possess the educational credentials that are required of them to succeed in their jobs. To illustrate, once Tata moved its manufacturing facility to Singur, it had a hard time finding skilled

labour

.

Moreover

, they had to incur additional expenses for setting up warehouses.

Therefore

, in my opinion, shifting factories to remote locations

has

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have

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more drawbacks than benefits because of the inefficient

infrastructure

support and the paucity of skilled

labour

. To conclude, in many countries, the ruling

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party

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part

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party

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is encouraging their industrialists to shift their production bases to suburban

areas

. Reduction in

cost

of

labour

and

land

are the key advantages of making

such

a move.

Nevertheless

, I strongly feel that by doing so, companies miss out on the

state-of-the art

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state-of-the-art

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infrastructure

and do not get the skilled employees that they need for running a factory, and

as a result

, these drawbacks far outweigh the gains achieved.