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The multiplier effect with reference to Newport and Setubal
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| Submitted: Thu Jul 11 2002
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The multiplier effect with reference to Newport and Setubal The multiplier effect is caused when a big business sets up a big new industry or development in an area. The new development will need new infrastructure such as roads, which needs people to build them, providing even more jobs. If it is a manufacturing industry, then other industries may set up nearby to keep transport costs down. A good example of the multiplier effect is in the region of Portugal called Setubal. The carmakers Ford and Volkswagen decided to build a £1.7billion car manufacturing plant in the area, which created three thousand jobs. Along with the plant, a dock needed to be renovated and roads needed to be built, creating more jobs. As a car factory assembles parts, some factories were setup nearby, for example a metal works. These new jobs meant that some people, who had out-migrated to places like...
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