2. **Labor pooling**: a large and concentrated industry may attract a pool of workers, reducing employee search and hiring costs for each firm
3. **Knowledge spillovers**: workers from different firms can more easily share ideas that benefit each firm when a large and concentrated industry exists. Also, easier to learn from nearby concentration of competitors.
1. ** Specialized equipment or services** may be needed for the industry, but are only supplied by other firms if the industry is large and concentrated