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Industry is massive and geographically nearby in China. If you need to source a different size bolt at scale, the factory for them may be 10-15 minute drive dow
by JoeCortopassi 9y ago
Industry is massive and geographically nearby in China. If you need to source a different size bolt at scale, the factory for them may be 10-15 minute drive down the road. In the US, you may have to have them overnighted. The amount of raw resources quickly available is a huge competitive advantage in being able to pivot on manufacturing changes and keep lead times down
- crdoconnor 9y agoYeah, this is the real reason. The pearl river delta has the densest industrial ecosystem in the world. This is was a result of China's mercantilist trade policy - e.g. suppressing the value of the yuan/subsidizing industry -> manufacturing moves to China -> ecosystem gets richer -> manufacturing becomes more valuable in China -> more manufacturing moves there. etc. It took 20-30 years to get the ball rolling before network effects took over, but now if you want a specific kind of LED or a different size bolt at scale the chances are the pearl river delta will be the easiest place to source it and if that's what you want to build, it's the best place in the world to sell it. The economic risk this presents to the rest of the world is severely underestimated. Industrial ecosystems take decades to grow and decades to decline, but access can be cut off overnight.
- addicted 9y agoThe vast majority of people on this board are located in geographical tech hubs. The benefits of network effects that cause software companies to concentrate in a few areas are even more pronounced in the hardware field.
- dv_dt 9y agoSo was Detroit basically like that in its heyday?