Localization of industries refers to the concentration of firms of an industry in a specific geographic area. In other words, it refers to the tendency of firms in the same industry to cluster together in a particular location. This can happen due to various factors such as access to resources, labor, and markets, as well as the presence of a skilled workforce or favorable government policies. The concentration of firms in a particular area can lead to economies of scale, increased competition, and knowledge sharing, which can benefit both the firms and the local economy.