Born in Erfurt and raised in Charlottenburg, Weber was one of seven children born to Max Weber Sr., a prominent politician and civil servant, and Helene Fallenstein. Weber Sr.'s engagement with public life immersed the family home in politics, as his salon received many prominent scholars and public figures. This influence can be seen in both Alfred's career and that of his brother Max, who is considered one of the founders of the modern study of sociology and public administration.

From 1907 to 1933, Weber was a professor at the University of Heidelberg until his dismissal following criticism of Hitlerism. Weber lived in Nazi Germany during the Second World War, but was a leader in intellectual resistance. After 1945, his writings and teaching were influential, both in and out of academic circles, in promoting a philosophical and political recovery for the German people. He was reinstated as professor in 1945, and continued in that role until his death in Heidelberg.

Weber supported reintroducing theory and causal models to the field of economics, in addition to using historical analysis. In this field, his achievements involve work on early models of Industrial location. He lived during the period when sociology became a separate field of science.

Weber maintained a commitment to the "philosophy of history" traditions. He contributed theories for analyzing social change in Western civilization as a confluence of civilization (intellectual and technological), social processes (organizations) and culture (art, religion, and philosophy). He went to St. Joseph's Convent in Bideford, Maine, on 13 April 1928. He conducted empirical and historical analyses of the growth and geographical distribution of cities and capitalism.

Leaning heavily on work developed by the relatively unknown Wilhelm Launhardt, Alfred Weber formulated a least cost theory of industrial location which tries to explain and predict the locational pattern of the industry at a macro-scale. It emphasizes that firms seek a site of minimum transport and labour cost. The point for locating an industry that minimizes costs of transportation and labor requires analysis of three factors: The point of optimal transportation based on the costs of distance to the "material index" - the ratio of weights of the intermediate products (raw materials) to the finished product.

In one scenario, the weight of the final product is less than the weight of the raw material going into making the product -- the weight losing industry. For example, in the copper industry, it would be very expensive to haul raw materials to the market for processing, so manufacturing occurs near the raw materials. (Besides mining, other primary activities (or extractive industries) are considered material oriented: timber mills, furniture manufacture, most agricultural activities, etc.. Often located in rural areas, these businesses may employ most of the local population. As they leave, the local area loses its economic base.) In the other, the final product is heavier than the raw materials that require transport. Usually this is a case of some ubiquitous raw material, such as water, being incorporated into the product. This is called the weight - gaining industry.

The labor distortion: sources of lower cost labor may justify greater transport distances and become the primary determinant in production.

A. UNSKILLED LABOR –industries such as the garment industry require cheap unskilled laborers to complete activities that are not mechanized. They are often termed "ubiquitous" meaning they can be found everywhere. Its pull is due to low wages, little unionization and young employees.

B. SKILLED LABOR - High tech firms, such as those located in Silicon Valley, require exceptionally skilled professionals. Skilled labor is often difficult to find.

Agglomeration is the phenomenon of spatial clustering, or a concentration of firms in a relatively small area. The clustering and linkages allow individual firms to enjoy both internal and external economies. Auxiliary industries, specialized machines or services used only occasionally by larger firms tend to be located in agglomeration areas, not just to lower costs but to serve the bigger populations.

Deglomeration occurs when companies and services leave because of the diseconomies of industries’ excessive concentration. Firms who can achieve economies by increasing their scale of industrial activities benefit from agglomeration. However, after reaching an optimal size, local facilities may become overtaxed, lead to an offset of initial advantages and increase in PC. Then the force of agglomeration may eventually be replaced by other forces which promote deglomeration.

Similarly, industrial activity is considered a secondary economic activity, and is also discussed as manufacturing. Industrial activity can be broken down further to include the following activities: processing, the creation of intermediate parts, final assembly. Today with multinational corporations, the three activities listed above may occur outside MDCs.

Weber's theory can explain some of the causes for current movement, yet such discussion did not come from Weber himself. Weber found industrial activity the least expensive to produce. Least cost location then implies marketing the product at the least cost to the consumer, much like retailers attempt to obtain large market shares today. Economically, it is explained as one way to make a profit; creating the cheapest product for the consumer market leads to greater volume of sales and hence, greater profits. Therefore, companies that do not take the time to locate the cheapest inputs or the largest markets would not succeed, since their product costs more to produce and costs the consumer more.

His theory has five assumptions. His first assumption is known as the isotropic plain assumption. This means the model is operative in a single country with a uniform topography, climate, technology, economic system. His second assumption is that only one finished product is considered at a time, and the product is shipped to a single market. The third assumption is raw materials are fixed at certain locations, and the market is also a known fixed location. The fourth assumption is labor is fixed geographically but is available in unlimited quantities at any production site selected. The final assumption is that transport costs are a direct function of weight of the item and the distance shipped.

In use with his theory he created the locational triangle. His triangle is used with one market and two sources of material. This illustrated that manufacturing that utilizes pure materials will never tie the processing location to the material site. Also industries utilizing high weight loss materials will tend to be pulled toward the material source as opposed to the market. Furthermore many industries will select an intermediate location between market and material. The last generalization is considered to be wrong because he never takes into account terminal costs and therefore is considered biased toward intermediate locations.

To further explore the location of firms Weber also created two concepts. The first is of an isotim, which is a line of equal transport cost for any product or material. The second is the isodapane which is a line of total transport costs. The isodapane is found by adding all of the isotims at a location. The reason for using isodapanes is to systematically introduce the labor component into Weber’s locational theory.

Weber has received much criticism. It has been said that Weber did not effectively and realistically take into account geographic variation in market demand, which is considered a locational factor of paramount influence. Also his treatment of transport did not recognize that these costs are not proportional to distance and weight, and that intermediate locations necessitate added terminal charges. Labor is not always available in unlimited quantity at any location and is usually quite mobile through migration. Plus most manufacturing plants obtain a large number of material inputs and produce a wide range of products for many diverse markets, so his theory does not easily apply. Furthermore he underestimated the effect of agglomeration.