Economies of Agglomeration is The term urbanization economies, where refers to benefits that firms in a number of different industries receive from population and infrastructure clusters. It is closely associated with economies of scale and the network effects mentioned above. Economies of Agglomeration and transport costs would seem to suggest that agglomerations should become less important, as transportation and communication costs have fallen. It remain remarkably vital, despite ever easier movement of goods and knowledge across space. Economies of Agglomerationis that production is facilitated when there is a clustering of economic activity.