EDP Notes

1) Economies of Scale: It arises because all the industrial units enjoy common infrastructural
facilities like water, roads, etc. As the size of the industrial units increases, the costs of estate
development and administration per unit of each facility decrease.

2) External Economies: Several industrial units are clustered together in an industrial estate. This
enable them to enjoy the benefits of agglomeration and external economies like improved transport
facilities, availability of trained labour, repair facilities, power and water etc.
3) Low Investment: Even a small entrepreneur can acquire an industrial plot or shed on rent or hire
purchase basis.
4) Less Risks: Since all units enjoy common facilities and low capital investment, risks are
relatively low.
5) Mutual Co-Operation: All industrial units located in an industrial estate face common problems
and seek to achieve common objectives.
6) Balanced Regional Development: It is possible to secure a balanced regional development by
developing industrial estates in industrially backward areas.
7) Saving Of Time and Effort: An individual entrepreneur is relieved of trouble of searching for
suitable space.
8) Entrepreneurial Development: Industrial estates reduce risks and increase profitability through
internal and external economies.