Mel Gross
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 p.161 #6 · Canon 5D Mark II master thread | |
Emile Gregoire wrote:
Services typically have higher value than manufacturing so that's where you should focus on. Do you really think you can compete with the likes of China (nowadays, probably Africa in another two decades) in manufacturing? Good luck... And this is what I've been trying to say all along: the focus on manufacturing, manufacturing and manufacturing of a few people here is "passé". Instead, concentrate on innovation, R&D, sales and marketing and produce the results of it where they're better at it. Win/win as the producing country and its citizens will gain too and as they do you can sell your services to them and gain more. Look towards the future, don't dwell on the past. It really wasn't better back in 1943 when you were more of a manufacturing nation as you say you're now. We didn't have a 5D Mark II for instance to discuss 
You're absolutely right about the tomatoes versus paste if you use it as an analogy for low yield versus high yield. My remark was meant as: do what you're good at. In the case of the western world, mass manufacturing isn't one of them anymore....Show more →
I look to what's been happening.
To cut off much history, which is really needed to understand the current situation, but is too long a tale for here, we can cut to a closer time.
Japanese cars cost much less to make than it cost US manufacturers, when they first came over. But over a couple of decades, as Japanese cost of living went up with the wages and benefits, the Japanese car companese opened manufacturing plants here as well. Why? Because it cost more to produce there, once the cost of transporting them, and taxes were added on, even though the Japanese worker, on average still received somewhat less than an American worker did.
In China, for the past two years, manufacturers have been increasingly complaining that wages and benefits are going up too much for them to be competitive. So they are moving factories into Vietnam, which is a lower cost place to do business.
While I don't think that Africa is in any way ready for major business investment, eventually, it will begin to happen. But it will take decades. Their governments are simply not ready, and the promise of that has been long in the making.It will remain that way for a long time.
But, meanwhile the concept of free trade, has been compromized by the problem of uneven production costs, which was never envisioned hen these agreements were originally made up decades ago.
It's fine for countries that are on an approximately level playing ground to agree to free trade, but not when the ground is full of vastly lower depressions, as it is now.
But, over time, and that will take decades, the production costs in China, India, and elsewhere will rise high enough so that the difference will matter little, once those transportation costs and taxes are taken into account.
Once that happens, production will again move to where the total costs are even, or lower, and there will be no advantage to shipping the work, and the jobs elsewhere.
I just hope the West will be in good enough shape by then for it to matter to our economies. I think they will. I just hope I live long enough to see it.
Edited on Nov 10, 2008 at 05:09 PM · View previous versions
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