At some stage in the development of an industrial complex, maximum economies of scale are achieved and further expansion may result in 'dis-economies' which offset or more than offset the economies. There is, for example, the constant competition between various industries which increases the price of materials and other factors of production such as skilled labour, land, capital and transportation. There may be militant labour unions whose activities affect wages and attitudes towards labour. Strikes may be frequent and widespread. When the provision of services and amenities increases in cost, taxes are raised to pay for them. Costs rise as a result of congestion and the strain on existing services such as transportation, water supply and waste disposal. Rural population, attracted by employment opportunities in growing centres, migrate to these centres in quest of jobs ranging from work in trades, administration and services, to labouring jobs such as digging, carrying, loading and cleaning. The urban-industrial complexes are usually ill-prepared to receive the 'in-migrants'. The preparation of building sites, the provision of roads and services and the construction of houses cannot keep pace with the influx. Without money or possessions and willing to live at a lower standard than other residents, the newcomers crowd in with friends who have arrived earlier, become squatters and create shanty towns; in extreme cases some band together into gangs and go foraging.
The negative aspects of economic concentrations are not only localized within the concentrations themselves, but at the national level they have produced one of the most urgent problems facing the large developing countries, namely the problem of regional inequality and stranded or neglected areas. Undue emphasis has often been laid on the development of the privileged areas. Consequently, other regions, some of them very promising growth poles, may be left relatively inaccessible and virtually neglected.
2. The use and distribution of industrial process by the larger society are determined by self-seeking, profit-making forces. The need of two-thirds of humanity for a minimal standard of living is blocked by a maldistribution of manufacturing technologies.
Through such geographic concentration, opportunities for economizing in certain areas will increase. Just as a single industry can, up to a point, achieve internal economies as it expands its output and capacity, so can the mass of industries in a concentrated area as the industrial capacity of the area grows. As the nucleus grows, banking and insurance facilities become available, maintenance and repair services are established, journals are produced and a host of tertiary activities develop.
Enormous economic advantages can thus be derived from the concentration of economic activities within a few large centres. Consequently, the development of these concentrations is inevitable in the early stages of industrial development and their existence in developing countries is, to a large extent, justified.