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But factories won't physically move at all. As costs change, makers will just spend money to create new factories wherever costs are lowest -- labor, raw mater
by randcraw 8y ago
But factories won't physically move at all. As costs change, makers will just spend money to create new factories wherever costs are lowest -- labor, raw materials, power, regulations, shipping. The old factories (and companies) will close, as they did in the US starting in the 1960's, and new ones will arise somewhere else, usually run by someone else.
The effect will be the same though: the site of manufacturing will change. But like the Star Trek transporter, no matter actually gets moved.
- deogeo 8y agoCareful - that something happened in the past is no guarantee it'll happen again, especially if conditions change. > wherever costs are lowest -- labor, raw materials, power, regulations, shipping. Due to automation, labor costs will be less and less of a factor. Ocean shipping is already very cheap, and comprises a negligible fraction of the cost of most products - it's how markets in Europe are full of Chinese garlic. Raw materials can be shipped, so those are also not much of a factor. That leaves only power and regulations as factors. A smart country is likely to make sure those don't work against it, and to outsource only the most environmentally-harmful production steps. There are still tariffs, but being willing to host polluting industries is otherwise dangerously close to being the only advantage an under-developed country has left.