It is said that industrial relocation has negative impacts on source regions. And while this sounds logical, there has to be some explanation behind it. The reasons why industrial relocation harms source regions are:

  1. Increase in unemployment as industries close down, leaving the labor without jobs. Layoff of many labourers takes place as new hiring is done majorly from the new place of shifting. This makes it easier for the industry to recruit an available workforce near the new location, and they don’t have to initiate shifting their existing labour from one place to another.
  2. A majority of the population moves out due to the unavailability of jobs. Daily wagers are displaced, and many people are left homeless and jobless.
  3. Fall in the standards of living of labours. Since they no longer have a job now, their standard of living declines, and their lives become miserable.
  4. Increase in criminal activities as people strive to earn a livelihood. When a person becomes jobless and cannot find a new job, becoming a thief is sometimes the only option they are left with. This increases the number of theft in the state as this is the only source of living the fired labour is left with to feed their families.
  5. Lack of infrastructure and housing due to the development of depressed regions. This creates an imbalance between houses for labours and other populations in the region as more and more land is covered with infrastructure for industries and factories.
  6. Fall in the economic performances of the source region with the displacement of one industry from a region. Even if the industry is not entirely shifted, but only partial relocation is done, that region’s economy gets highly affected.
  7. Loss of resources. When an industry is set up in a region, big and small developments keep happening to support the industry. Road, electricity, and transportation are a few things that improve industry presence. When an industry gets relocated, the availability of these resources gets highly affected in that region.