Backward and Forward Linkage of Industries
Linkage are the relation of one's business with the business of other companies. They are related with product produced by the other manufacturers in terms of processing further the product, to come out with a new product idea.
Industrial Linkage
The backward and forward linkages of industries mean that producers depend on other industries for their operations. Let us take for example, the logging industry. The outputs of this industry are the timber, boards, planks, and plywood. This logging industry requires inputs like planting trees equipment and technical know-how. Both outputs and inputs need electricity, water, fuel, and transportation.
The backward linkage as given in the example refers to industries of other companies whose products are required as inputs to produce the outputs of the logging industry such as timber, boards, planks, and plywood Understanding this further, backward linkages are logging products used to produce outputs or made through the use of the woodworking machine, transportation, transporting equipment and materials, cutting trees equipment, and technical know-how.
The forward linkages of the industry are manufacturing industries required to further process the logging products, such as furniture and cabinet factories, toy factories, and other companies that are making use of wood.
These forward and backward linkages of a product and other products should guide a would-be entrepreneur in a business idea venture.
Industrial Linkage
The backward and forward linkages of industries mean that producers depend on other industries for their operations. Let us take for example, the logging industry. The outputs of this industry are the timber, boards, planks, and plywood. This logging industry requires inputs like planting trees equipment and technical know-how. Both outputs and inputs need electricity, water, fuel, and transportation.
The backward linkage as given in the example refers to industries of other companies whose products are required as inputs to produce the outputs of the logging industry such as timber, boards, planks, and plywood Understanding this further, backward linkages are logging products used to produce outputs or made through the use of the woodworking machine, transportation, transporting equipment and materials, cutting trees equipment, and technical know-how.
The forward linkages of the industry are manufacturing industries required to further process the logging products, such as furniture and cabinet factories, toy factories, and other companies that are making use of wood.
These forward and backward linkages of a product and other products should guide a would-be entrepreneur in a business idea venture.
