There is a lot of talk in the technology industry at the moment about US companies taking back 'manufacturing' to the US, given a boost by the recent press coverage of working conditions in Foxconn factories. It has been given another boost by the recent announcement of Google's Nexus Q, some uninteresting media streaming device.
However, It isn't uninteresting when it comes to where it is manufactured. Google made a point of the fact it is manufactured in the United States, a move that is (perhaps wrongly) seen as purely an attempt to take advantage of the negative press surrounding Apple and their use of overseas manufacturing factories such as Foxconn. But as soon as the price hit for this product, questions arose about if it is simply worth it, at $299 for such a product - many seem to believe it is overpriced purely due to the much higher manufacturing costs involved in countries like the US.
Whatever, that is unimportant as to what I want to say. There seems to be this idea that to 'save' our economies in our western industrialised and advanced economies, we need to bring back the type of manufacturing that China dominates. The idea that:
Countries like the United States (and UK, the debate goes on here too) cannot compete in regards to the size of the work force and how much those workers have to be paid. We have higher standards of living, higher costs of living that obviously require higher wages.
That bringing back such manufacturing would be beneficial to us on the world stage. No, it would not. Let me explain:
As economies advance, the population gets richer, the education standards rise, standards of living rise, and generally, the work force is capable of more specialised work that cannot be competed with by countries like China, Indonesia, Brazil. Economies have to advance because sooner or later, everyone else will be at your level and they will have that large work force and will be able to do what you were so well positioned to do so, much better.
'High tech' industries, design, services and skills that are only achieved through that higher education levels are what advanced economies specialise in. That is what you export, and because it isn't easily achieved, it is worth more. Look at the military weapons industry, that is massive, the biggest manufacturers of these are the 'advanced' economies, like France, UK and US. It is manufacturing achieved by specialised skills gained via the unique position that these countries find themselves in, it cannot easily be replicated.
I said in my 'about' page that I'll talk about things I am vastly under qualified to speak about, perhaps this is one of those things. But from my perspective, it seems like pretty basic knowledge gained through observing the worlds economies and the history of individual economies. Economies progress by exploiting the advantages of their population over others, the advantages of our populations is not the cheap work force, it is the skilled and educated work force.
The reason why we're not growing as quickly as China and Brazil is not because of the loss of manufacturing, it is because we have stagnated on education, on sciences, on engineering. Of course, it isn't the only thing, we have our problems when it comes to debt levels and how they got so high, but my point still remains, I think.
Subscribe to blog.qassim.uk
Get the latest posts delivered right to your inbox