Monday, August 29, 2016

Interesting Article on Future of Manufacturing in China

The Washington Post has a very interesting article by Vivek Wadhwa
Why China won’t own next-generation manufacturing
 There are a number of very interesting points  (that I highlighted) .
"China has made this a national priority and is making massive investments. Just one province, Guangdong, committed to spending $150 billion to equip its factories with industrial robots and create two centers dedicated to advanced automation. But no matter how much money it spends, China simply can’t win with next-generation manufacturing. It built its dominance in manufacturing by offering massive subsidies, cheap labor and lax regulations. With technologies such as robotics and 3-D printing, it has no edge."
 Here Mr. Wadhwa nails it:
"After all, American robots work as hard as Chinese robots. And they also don’t complain or join labor unions. They all consume the same electricity and do exactly what they are told. It doesn’t make economic sense for American industry to ship raw materials and electronics components across the globe to have Chinese robots assemble them into finished goods that are then shipped back. That manufacturing could be done locally for almost the same cost. And with shipping eliminated, what once took weeks could be done in days and we could reduce pollution at the same time."
The education issue below can obviously be addressed, but it is interesting that it has yet to be addressed.
"The bigger problem for China is its workforce. Even though China is graduating far more than 1 million engineers every year, the quality of their education is so poor that they are not employable in technical professions. This was documented by my research teams at Duke and Harvard. Western companies already have great difficulty in recruiting technical talent in China. This will get worse because advanced manufacturing requires management and communication skills and the ability to operate complex information-based factories. Ernst predicts that the increasing scarcity of specialized skills may be the Achilles’ heel of China’s push into advanced manufacturing and services."