Harvard business school got us started on this road to ruin, with a flood of MBA's (mindless bottom-line analysts) who were convinced that you don't have to know anything about a business to run it - all they're concerned with is money, and short-term profits at that. America in the 50's was a land of innovators and lots of us aspired to be one. Now, the younger generation believes it's more important to be "cool" (and rich) than smart. Harvard, and corporate America in general, have sold us down the river. It will be difficult at best to get us back on track!
I wonder why it took whole 10 years for a professor in Harvard to raise this question, and the stupid guys in Wall Street to figure out a country with just an empty shell-no meat has no bargaining chips in business either. Let along the innovation, the whole livelihood of this country is in danger.
I have been talking like this for 8 years. Since the very beginning of outsource MOVEMENT. I am no economist, no policy makers. But I know that since the dawn of civilization, people have to hold on to their IP and know-how to get competition edge. My grandpa in China will die to keep his Chinese medicine recipe to the family and not to give away. If the manufacturing process will give up the protection, he will be a fool to outsource. As simple as this.
I knew how strong US was when I came here for engineering study 25 years ago. And we all know how bad it is today. The leading Si process is mostly in Asia. Design also begin to lose edge. The Wall Street is selling this country for 10 years. They used to dream they can do it forever. The current crisis is the end of this country selling. We are full of dummies who can make up funny stories of making big money, but there is no bases. Just use your common sense. Why it took Harvard to study this? Was it the "elite" of Harvard business school bunch who used to think they can control the world and boss the industry to outsource to save a penny of cost difference? Oh, now somebody in Harvard realize there might be something wrong with the ASSUMPTION of the theory?
Dummies, Dummies, Dummies!
Design, development, proto-type and high volume manufacturing should be regarded as a TOTAL PACKAGE. Right now, the US is at the mercy of the outsourcing countries. We are lucky these countries value these businesses. When these countries are rich economically, our companies will have to beg them to produce their brand new products. I believe this day will come in the future. US is still an ideal place for manufacturing, if we know how to get rid of the red tapes. Automation, inline systems and other new manufacturing technologies will enable us to be competitive. However, most companies choose to outsource. This is one big strategy for the US industry.
The US should not even consider a move to a Service Based Economy, services are not innovative but are followers of technology. The US should bolster its manufacturing here and make rules and agreements to ensure the survival of its manufacturing base here. China has been allowed to have some unprecedented economic advantages by not allowing its currency on the open market where it would be valued much higher, this changes the value of products they export to an unfairly low value, and given the cost of their labor as well - they have an extreme cost advantage in exports and manufacturing (call it dumping by mandated value). This also makes it very difficult to export into China as the cost disparity is both ways. Perhaps we should value the dollar at 1/10th the chinese currency and then see how many countries use the United States as a point of manufacture for their products. The problem is not whether the costs are higher but whether the trade is fair. Unfortunately we have tough talkers when they campaign but now the campaign is over it would be nice to see real progress.
Manufacturing jobs are good jobs and support good jobs, they are not just line workers, they are engineeers, managers, and product testers, they are marketing and sales.
Having worked for an international company and seeing how they ensure control for manufacturing , engineering and direction along with the top posts they all go to their own along with the profits and benefits
The United States is the largest market in the world, while China is catching up - (who cares as they will not be able to get their products into China except they make them there as if they should try otherwise they will not be affordable to the average Chinese person). I am sure that fair trade would swing the balance in favor of innovation, and productivity!
SHAME on the U.S. and its leaders for allowing this to occur.
Innovation take a long time to bear fruit, typically in years. In my belief, until Wall Street rewards business establishment for dedicating sufficient amount of their revenue to R&D, innovation in US likely keeps declining. Of course, I am listening and is happy to correct my thought otherwise.
I have heard this cry for the past 25 years. The United States remains the single biggest manufacturer in the world, bar none: $1.7 trillion in manufacturing outputs. China is a distant second at $1.3 trillion. Open and free trade is required, and if sustained more manufacturing will return as the cost of logistics to move finished products around continues to increase. I have been in the high tech product industry for 30 years and have been in manufacturing sites in the US, Japan, Mexico, China, India, and Taiwan. No one, other then the Japanese are cost to the US from a process capability and efficiency perspective. Yes they can throw low cost labor at it, but they cannot produce to the consistent and traceable quality levels.
Manufacturing is a base upon which the society builds. Base level workers have families that want work up the knowledge chain. It is a slow decline in the "dumbing down" of society without manufacturing.
We can see the rate of knowledge growth in China, not just as a result of government education, it comes as a result of the knowledge built in society from manufacturing. Accountant and those that fashion wall street, fail to account for the educational benefits to teh society that has a base with manufacturing. That, and the fact that we are complicit in supporting human exploitation through moving manufacturing and services to the lowest cost locations in the world. This is not truly a long term, viable solution and shows that offshoring of manufacturing and services is a short term profit maximization strategy. Vision and doing what is right is no longer seen as an investment in the future, but management for next quarters results is all that matters.
That person soldering a surface mount capacitor in Malaysia who gets $2 a day can be replaced by a robot. If we automate our manufacturing to the hilt, the wage disparity will evaporate. This will cause, of course, fewer jobs to be created in the USA. An easy solution to that is to reduce the work week to spread around the remaining jobs. Convincing the "ownership" class in this country to pay a living wage for 4 days of work will require some political clout.
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