- It leads to the provision of employment opportunities to the people in the area.
- It leads to the development of subsidiary industries which provide market to the main industry.
- It leads to interdependence between firms due to the sharing of same facilities and market.
- It leads to the development of infrastructures in the area like hospitals, roads, banks e.t.c.which are vital for development.
- It promotes urbanization which is significant in breaking the traditional rigidities that hinder development.
- It promotes competition among firms which enhances the production of quality output.
- It increases government revenue through taxing these industries.
- It promotes joint research hence reducing the cost of production for the firms in the industry.
- It leads to the international reputation of the area hence attracting tourists which increases foreign exchange in the country.
- It leads to the creation of market for the raw materials and finished products since a big population is attracted in the area.
- It increases the supply of skilled manpower in the area to work in the industry hence promoting development.
- It improves on the standard of living of the members in the area since they are exposed to a variety of goods at cheap prices.
- It becomes easy for firms producing related products to merge and expand their operations hence enjoying economies of scale.
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