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Industrial park

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An industrial park with factories in Queenstown, New Zealand

An industrial park, also known as industrial estate or trading estate, is an area zoned and planned for the purpose of industrial development. An industrial park can be thought of as a more heavyweight version of a business park or office park, which has offices and light industry, rather than heavy industry.

Industrial parks are based on economic theories of economic agglomeration or clusters, industrial organisation, and spatial economics that deal with how planned concentrations of firms can lead to efficiencies and to urban development [1]. One of the most important thoughts on this was Alfred Marshall's notion of the industrial districts in the late 19th century; his notion focused on the external economies that are associated with geographic concentration, labour market pooling for specialised skills, and reduction in search costs, access to specialised suppliers and inputs (trans transaction costs) and transfer of knowledge (proximity, imitability and informal exchange). Also, small businesses can obtain scale economies that are equal to large integrated companies through these external economies [2].

On this, Michael Porter's cluster theory concentrates on how affiliated companies, suppliers, service providers and institutions within a space can boost productivity, drive innovation through competition and cooperation and help new institutions to emerge and grow [3]. The firm's strategy, demand conditions, affiliated firms, factor conditions of production and tertiary institutions are combined in what Porter termed the diamond model, in which agglomerations are considered as providing a competitive advantage in the global market.

Meanwhile, agglomeration is represented by inward (economies of scale, input sharing, knowledge flows) versus outward forces (congestion, land costs) , and whenever an industrial park succeeds in eliminating these coordination problems from the economy [4], they can be seen as a formalisation of agglomeration by new economic geography (e.g, Paul Krugman).

In real life, mostly in developing countries, industrial parks are applied as industrial policy instruments that focus on the creation of channels for the attraction of foreign direct investment (FDI), promote export-led industrialisation, integration in the global value chains, transfer of technical knowledge, and the generation of jobs [5]. They help to greatly reduce institutional and infrastructural gaps. In that they manage to deliver shared facilities in specific areas, they are effective if there are secondary policies on sustainability and upgrading on the issues of design, governance and other factors.

In general, these theories emphasise the view that industrial parks are more than just physical environments; they are important strategies for the development and utilisation of agglomeration effects, thereby creating a way to achieve structural change by balancing organic cluster emergence with planned growth [6].

Benefits

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The industrial zone in Dakar, Senegal
The industrial zone in Trier, Germany
Part of the municipal airport industrial complex in Edmonton, Canada
Sumgayit Chemical Industrial Park under SOCAR Polymer, Azerbaijan

Industrial parks are usually located on the edges of, or outside, the main residential area of a city, and are normally provided with good transportation access, including road and rail.[7] One such example is the large number of industrial estates located along the River Thames in the Thames Gateway area of London. Industrial parks are usually located close to transport facilities, especially where more than one transport modes coincide, including highways, railroads, airports and ports. Another common feature of a North American industrial park is a water tower, which helps to hold enough water to meet the park's demands and for firefighting purposes, and also advertises the industrial park and locality, as usually the community's name and logo are painted onto its surface.[8]

Black River Falls industrial park water tower
See also: Water tower cellular

This idea of setting land aside through this type of zoning has several purposes:

  • By concentrating dedicated infrastructure in a delimited area, to reduce the per-business cost of that infrastructure. Such infrastructure includes roadways, railroad sidings, ports, high-power electric supplies (often including three-phase electric power), high-end communications cables, large-volume water supplies, and high-volume gas lines.[9]
  • To attract new business by providing an integrated infrastructure in one location.
  • Eligibility of Industrial Parks for benefits.[10][11]
  • To set apart industrial uses from urban areas[12] to try to reduce the environmental and social impact of the industrial uses.
  • To provide for localized environmental controls that are specific to the needs of an industrial area.

Benchmarking

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Benchmarking helps to rank industrial parks based on various criteria, including performance, investment, environmental protection, social responsibility, and governance (ESG).[13] For the manufacturing companies located in industrial parks, the performance of industrial park operators is important, as the costs for infrastructure and services charged by the industrial park operator is a serious factor for the competitiveness of the manufacturing companies.[14][15]

Criticism

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Different industrial parks fulfill these criteria to differing degrees. Many small communities have established industrial parks with only access to a nearby highway, and with only the basic utilities and roadways. Public transportation options may be limited or non-existent.

Industrial parks in developing countries such as India face a myriad of additional difficulties. This includes the availability of a skilled workforce and the clustering together of radically different industrial sectors (pharmaceuticals and heavy engineering, for example), which often leads to unfavorable outcomes for quality centered industries.[16]

Variations

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An industrial park specializing in biotechnology is called a biotechnology industrial park. It may also be known as a bio-industrial park or eco-industrial cluster.

Flatted factories exist in cities like Singapore and Hong Kong, where land is scarce. These are typically similar to flats, but house individual industries instead. Flatted factories have cargo lifts and some have roads that serve each level, providing access to each factory lot.

The canton of Geneva, Switzerland, is also encouraging the densification of industrial areas and their transformation into mixed-use zones due to a lack of land reserves. These zones house some businesses in industrial buildings operated by real estate companies, which can generate revenue by leasing ground-floor spaces to service providers catering to workers in the zone (shops, fitness centers, restaurants, etc.).[17]

See also

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References

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  1. ↑ Ambashi, Masahito (2025-09-29). "Industrial Parks and Their Impact on Development". Working Papers.
  2. ↑ Ambashi, Masahito (2025-09-29). "Industrial Parks and Their Impact on Development". Working Papers.
  3. ↑ Nguyen, Hoang-Oanh Thi; Nguyen, Khanh-Duy (2024-12-31). "Moderator effect of industrial park on knowledge spillover from sectoral innovation to firm performance in Vietnam". Cogent Economics & Finance. 12 (1) 2403708. doi:10.1080/23322039.2024.2403708.
  4. ↑ Zhang, Xiaobo (2016-12-22). "Building effective clusters and industrial parks". IFPRI Discussion Papers.
  5. ↑ Nguyen, Hoang-Oanh Thi; Nguyen, Khanh-Duy (2024-12-31). "Moderator effect of industrial park on knowledge spillover from sectoral innovation to firm performance in Vietnam". Cogent Economics & Finance. 12 (1) 2403708. doi:10.1080/23322039.2024.2403708.
  6. ↑ Lee, Jongpyo; Jung, Sanghoon (2020-06-01). "Industrial land use planning and the growth of knowledge industry: Location pattern of knowledge-intensive services and their determinants in the Seoul metropolitan area". Land Use Policy. 95 104632. Bibcode:2020LUPol..9504632L. doi:10.1016/j.landusepol.2020.104632. ISSN 0264-8377.
  7. ↑ "Industrial park scheme 2008" (PDF). Archived from the original (PDF) on 2008-12-03. Retrieved 2009-06-11.
  8. ↑ Ferebee, Johanna (20 August 2019). "New water tower to serve Brunswick-Columbus industrial parks gets design funding". PortCityDaily. Retrieved 9 October 2019.
  9. ↑ Industrial Park land and infrastructure http://www.ground57.com/land-and-infrastructure/ Archived 2018-05-21 at the Wayback Machine
  10. ↑ "Industrial Park Benefits" (PDF). Archived from the original (PDF) on 2010-11-23. Retrieved 2009-06-04.
  11. ↑ "List of Approvals & Withdrawals under the Industrial Park Schemes, 1999 & 2002" (PDF). Archived from the original (PDF) on 2011-07-21. Retrieved 2009-06-11.
  12. ↑ "Orthodox Residents in Sanhedria Frightened Of Industrial Zone". The Jewish Press. January 7, 1994. in an uproar over a proposed industrial zone
  13. ↑ "Industrial Park Ranking". Benchmarkia: Crowd-Based Sustainability Benchmarking. Retrieved 2024-07-12.
  14. ↑ Festel, Gunter; Würmseher, Martin (May 2014). "Benchmarking of energy and utility infrastructures in industrial parks". Journal of Cleaner Production. 70: 15–26. Bibcode:2014JCPro..70...15F. doi:10.1016/j.jclepro.2014.01.101.
  15. ↑ Festel, Gunter; Würmseher, Martin (2014-09-30). "Benchmarking of industrial park infrastructures in Germany". Benchmarking. 21 (6): 854–883. doi:10.1108/BIJ-01-2013-0015. ISSN 1463-5771.
  16. ↑ "What is the Delhi Mumbai Industrial Corridor (DMIIC)?". 2024-12-10. Retrieved 2025-02-04.
  17. ↑ Pierre Cormon (16 December 2022). "La grande transformation des zones industrielles genevoises". Entreprise romande (in French). Retrieved 10 December 2025.
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