Production Links, Territorial

relations established during the functioning of production units (enterprises, groups of enterprises, sectors, and territorial production complexes of an economic region).

Territorial production links reflect the territorial division of labor. Its extension has both complicated and differentiated territorial production links. Each sector of the national economy (industry, agriculture) forms its own systems of territorial production links, which are determined primarily by the technical and economic features of the production and marketing of the product. The system of territorial production links associated with a territorial production unit (region) reflects the particular features of the natural and economic conditions of the unit’s development, as well as its production structure. In the USSR, territorial production links operate in conformity with a single national economic plan. The criterion for assessing the efficiency of territorial production links is the minimum aggregate national economic expenditures for producing and delivering the product to the consumer, under the condition that the production results established by the state plan must be achieved.

The formation of territorial production links begins at the level of the production enterprises, among which there are a number of different production links, including links associated with the delivery of fuel (energy), raw materials, and other primary materials; links providing the production process with machines, equipment, and auxiliary materials; and links that ship semifinished and finished products. Each type of production link at the level of the enterprise may be intraregional (local) or interregional (seeINTERREGIONAL ECONOMIC RELATIONS). As a rule, mining and agricultural enterprises have close territorial production links, whereas long-distance shipments account for a significant proportion of the production links among enterprises in manufacturing industry. Production combinations of enterprises (for example, in the processing of chemical or agricultural raw materials) are associated primarily with the formation of close territorial production links. In many instances, cooperation of enterprises (in machine building or light industry, for example) causes the formation of long-distance links, particularly when the cooperating enterprises are characterized by narrow specialization (seeINTEGRATION IN INDUSTRY; COOPERATION IN INDUSTRY).

Economic and geographic diversity characterizes links among production associations that enjoy the advantages of both intrasectoral and intersectoral production specialization, as well as the benefits of efficient territorial organization of production. Such links may exist within an industrial center, administrative raion, or oblast, or they may encompass the territory of an economic region or of several regions. The organization of the territorial production links of associations based on integration is either centralized (industrial combines) or regional (agrarian and industrial conglomerates). Intraregional and interregional organization of production links is characteristic of associations that make extensive use of the principle of cooperation among their own enterprises.

Production links are also classified in terms of their association with the current consumption of the objects of labor (raw materials, fuel, and electric power, for example), with providing the instruments of labor for production, with the accumulation of the objects of labor under expanded reproduction, with semifinished products (articles used in processing in current production), and with the end product (for consumption, for replacing withdrawn fixed assets, for creating reserves, for exports, and so forth). There are intrasectoral and intersectoral production links. The latter are subdivided into direct and indirect links. The specific territorial characteristics of the production links of sectors, enterprises, and associations are determined by the degree to which the primary materials are transportable, by the particular features of processing, by the distance between the region in which a product is produced and the region in which it is consumed, and by the comparative cost of a unit of the finished product. For example, a higher proportion of intraregional production links is characteristic of livestock raising, of the cultivation of sugar beets, and of the coal and iron ore industries. Territorial production links in grain farming, machine building, and the petroleum industry constitute interregional exchange.

General regional economic relations among territorial production units result from the use of the same sources of energy, water, and auxiliary materials by the enterprises and production units. Production links resulting from the division of labor among territorially separate enterprises of production associations, combines, or groups of cooperating plants and factories are subdivided into links associated with integration in industry, with the comprehensive use of raw materials or waste products, with production cooperation to ensure a balanced supply of the articles produced, and with supplying primary production with specific auxiliary materials (for example, at metallurgical combines, production links for fluxes and foundry sand).

Most of the general regional and specific production links operate within territorial production complexes. However, these complexes have been curtailed by processes stemming from the scientific and technological revolution, including improvements in equipment and in production methods, the deepening of production specialization, and reduced costs for transportation. In other words, individual production stages have been transferred to regions that are more favorable for their development, and there has been a corresponding increase in the proportion of external links among the complexes for cooperation and for increasing the volume of deliveries of fuel, raw materials, and other materials, as well as the volume of shipments of semifinished and finished products. The production territorial complexes in the economic regions of the USSR are characterized by different ratios between internal and external territorial production links. Thus, regional complexes in which a significant degree of production combining has developed (the Donets-Dnieper and the Urals) are characterized by a high proportion of intraregional links. Conversely, complexes characterized by the extensive development of production cooperation (the Central, Volga-Viatka, and Byelorussian regions) have a higher proportion of interregional links.

In the socialist countries, the study of territorial production links, especially by means of mathematical models, makes it possible to discover inefficient links, to establish the correct sectoral and territorial proportions, and to achieve the optimal development and location of production. Usually, the main reasons for inefficient territorial production links are shortcomings in the location of production (for example, the separation of processing industries from supplies of raw materials), inefficient technological structure of particular enterprises (for example, reduced or increased capacity of particular shops or plants in the production combines), and errors in planning the marketing of output. The current and long-term national economic plans of the USSR provide measures for eliminating inefficient territorial production links. In the foreign socialist countries, national economic interests are also taken into account in developing territorial production links. The development of socialist economic integration has an ever-increasing effect on the structure and geography of production links among the members of the Council for Mutual Economic Assistance (COMECON).

In the capitalist countries, territorial production links are determined by market conditions and are spontaneous in many respects. In the most developed capitalist countries (the USA, Japan, the Federal Republic of Germany, France, Great Britain, and Italy), acute contradictions have developed between the objective interest in optimizing territorial production links and the desire of the monopolistic associations to organize efficient territorial relations between “their own” enterprises. The territorial production links of the largest monopolies (for example, the petroleum and petrochemical industries) encompass the entire capitalist world. Under the conditions of private ownership of the means of production and acute competition, this situation gives rise to crosshauls and shipments over excessively long distances, as well as to the inefficient use of natural resources, the labor force, and production assets.