In Chicago, Illinois there are five broad categories of agglomerated industries. These categories are: hospitality/services-related; automotive-related; publishing-related; manufacturing-related industries; and transportation-related. These categories represent both urbanization economies and industrialization economies. The hospitality/services-related industries represent an urbanization economy because benefits accrue to individual households or consumer-oriented activities due to agglomeration of populations benefiting from the access to the general labor force. The other four categories of industries are industrialization economies. These represent agglomeration economies, i.e., external economies resulting from the spatial concentration of industrial activities. This is why automotive-related, publishing-related, manufacturing-related, and transportation-related industries accrue in the Chicago area – the benefits from labor market pooling, cost savings from proximity to suppliers, input sharing, knowledge spillover, etc.
The automotive-related industries benefit from being in Chicago due to their proximity to Detroit and the automobile manufacturing capitol of the world. This results in cost savings for many automobile dealerships in terms of shipping charges. Further, motor vehicle parts and supplies vendors benefit from proximity to both dealerships and automobile manufacturers in terms of knowledge spillover and input sharing.
The publishing-related industries benefit from being in Chicago due to input sharing, from suppliers to advertisers. Major periodicals, newspapers, and book publishers are in Chicago which ties in to the myriad publishing-related manufacturing industries that supply book-bindings, paper, and other publishing-related needs. Cost benefits accrue from shipping savings an