What are agglomeration economies?
Industrial locations are influenced by availability of raw material, labour, capital, power and market, etc.
Manufacturing activity tends to locate at the most appropriate place where all the factors of industrial location are either available or can be arranged at lower cost.
After an industrial activity starts it triggers urbanisation. Industrialisation and urbanisation go hand in hand.
Cities which provide markets and also provide services such as banking, insurance, transport, labour, consultants and financial advice, become urban centres called as agglomeration economies.