10 ms·

Sure, but which technology should USA reproduce. Just chips, and then be late on everything else? No. There is a gigantic machine in China, its name is Shenzen

Sure, but which technology should USA reproduce. Just chips, and then be late on everything else? No. There is a gigantic machine in China, its name is Shenzen. Its magic is that you can find any part and people who can rebuild them differently. This is the entire “valley” that USA should bring back home. USA should bring back the construction of the Macbooks, phones, servers and routers, and the entire ecosystem of tinkering that comes with it. This is the backbone of USA’s national security. We just have to acknowledge that having local industries means having poverty and dirty waste disposal at home instead of 9000km away. Which is not necessarily a bad thing either, so we can innovate on efforts.

azernik 5y ago
> Sure, but which technology should USA reproduce. Just chips, and then be late on everything else? Whichever ones are essential to national security. The ability to manufacture local, trusted hardware is important for military purposes, just like the ability to manufacture high-performance aircraft parts was and is important in the case that overseas suppliers are hostile or cut off.
- iancmceachern 5y ago
  The DMEA in Sacramento basically does this. https://federallabs.org/labs/defense-microelectronics-activity-dmea https://federallabs.org/labs/defense-microelectronics-activi...
petra 5y ago
There's a lot of talk about the tinkering culture of Shenzen, but is it really related to innovation? Has Shenzen become a startup hub? What large startups have come out of it?
- deleted 5y ago
  [deleted]
- frisco 5y ago
  Tencent, Bytedance, Huawei, DJI, SenseTime, ZTE? At least back in ~2015 when I visited, it was definitely a major startup hub.
- dzonga 5y ago
  don't know any but personally since it's not in the anglosphere you're bound to miss a lot of companies doing incredible stuff. just like it's easy to miss a bunch of small tech companies in the us doing incredible stuff whether for the right reasons or not.
- sudosysgen 5y ago
  Shenzhen is home to a lot of startups. some of them become unicorns, many of them you'll never hear about unless you're ij that specific market because they're B2B or get rebadged in Western markets. But there's a tooon of startups in every domain there. Basically most of the ebike market for example will use a lot of components from Shenzhen startups, and so do most electronics and a lot of software and e-commerce.
jollybean 5y ago
Shenzen has elements which are probably not reproducible. But 1) subsidies are what we would call a 'distortion' and those should be dealt with, possibly with anti-dumping tariffs; 2) There is such a thing as 'strategic investment' in key industries where the bar is very high and $10M from a VC won't help. This is where we need coordinated leadership. 3) There are other ways of 'building stuff'. Automation, AI etc. present opportunities for creating substitutes for those value chains. In particular, I think what the DARPA should push for is a robotic 'pair of hands' - i.e. a very easily programable set of very nimble robotic hands with accompanying vision, that can be made to do specific tasks within parameters i.e. 'pick up that part, add this other part' and handle most of the weird things that can go wrong. 4) In germs of geopolitics ... it may be more ideal to push for more diversity in sourcing and to help develop India, Malaysia, Mexico etc. towards doing at least more of those things. That's hard though.
- thevagrant 5y ago
  Personally, if the west can't build stuff it is only a matter of time before we are the customer and the prices start rising and our debt starts to crunch. There will be some part/component that during conflict becomes necessary but no ability to manufacture. We will have lost our knowledge and it'll take decades to recover, if we can recover at all. The billionaires will escape unscathed. I agree with point 4. If we had distributed supply chain then things may work better longer term but I am amazed that businesses still look to offshore everything without looking at the long term prospects of their workers and communities.
  - sudosysgen 5y ago
    Short of an amazing breakthrough in automation, this is basically inevitable. If you think about it in terms of labour values (I know, but stick with it) the West basically gets to do unequal exchange, the average westerner consumes a lot more labour-hours than they actually work. Now the reason for that is that behind every hour of work of an average westerner there's a lot more capital helping, and more educational capital too. But if developing countries do get closer, then inevitably prices will start rising. Not all industries can benefit so much from added capital. Those that can, and the service economy, are done in developped countries. Those that can't, are done in developing countries. If the two equalize, then the inequality in labour hours will equalize and westerners will either have to work more or consume less of products that are made in developing countries.
michaelmrose 5y ago
Why would poverty be a necessary import? We don't need to let US companies pay as poorly as overseas to achieve a competitive price in fact we cannot because -You cannot get skilled labor to work for less than competing unskilled work - Welfare and benefits erase the savings. You just make it prohibitably expensive to deal with your foreign competition, subsidize it, or some combination.
- xyzzyz 5y ago
  Yes, and making it too expensive to import, and paying high wages results in high prices of finished products, which reduces purchasing power, and so increases poverty on the margin.
  - visualradio 5y ago
    Industrial development can be promoted without creating poverty by using the tax code to eliminate any after-tax speculative super profits in real estate and finance and non-industrial sectors so that investors are forced to put their money into the real economy. Then by using financial regulations to require loans which expand quantity of legal tender in circulation to be issued on security of the replacement cost of tangible industrial capital, structures, plant, and equipment values rather than on security of the present value of future property rents. Then by replacing regressive sales, consumption, and payroll tax with a distributive ground rent tax on property owners. Promoting industrial development through regressive taxes and wage suppression is only the aristocratic form of industrialization pursued by right-wing governments when they are unwilling to eliminate after tax ground rents and non-industrial super profits enjoyed by the rich.
    - tobmlt 5y ago
      Hi, I have a question if you have time at some point: When you say “ Then by using financial regulations to require loans which expand quantity of legal tender in circulation to be issued on security of the replacement cost of tangible industrial capital, structures, plant, and equipment values rather than on security of the present value of future property rents.” This is interesting to imagine, but how? (Sorry if it’s a stupid-obvious question, but I am earnest in asking it. Perhaps I am stupid tonight.) I could certainly see regulation to kill the “future rents/superprofits industry” but not quite sure how to require loans for ... call it the future-tangible-industry-industry? Also sorry this question is formulated in such a round about way. Gleeful aside: Me thinks the status quo elite would not like it. ;) Finally; I am happy to do research -> how might you suggest I google my way into this viewpoint most directly?
gremloni 5y ago
I understand the dirty waste but why poverty?
- thaumasiotes 5y ago
  If your manufacturing process needs labor input, then it will happen where labor is cheap. Laborers working for cheap constitute poverty.
  - jeswin 5y ago
    But if they're willing to work for cheap, wouldn't they be worse off without the manufacturing? I mean, those people are already struggling and bringing manufacturing doesn't change that.
    - sobani 5y ago
      Yes. But the question is not whether people in Shenzen are better off with those manufacturing jobs, but whether it people in _the US_ would be better off if the manufacturing came back. So then either you have to 'force' people to take Shenzen-laborer level wages in the US, or the costs of manufacturing in the US will be higher than in Shenzen.
  - imtringued 5y ago
    It is poverty from our own perspective. If we stop paying them we don't have to blame ourselves. We can blame them for their own poverty. Cleaning yourself of this "moral guilt" is selfish as hell.
- rtkwe 5y ago
  Much of the competitive advantage that pushed manufacturing overseas was that people in poorer countries would accept lower wages for similar work compared to doing it in the US. That lowers costs a lot and makes up for other inefficiencies like prototyping time (though that has come down since so much is concentrated and can be developed locally in places like Shenzhen) and transportation.
genmud 5y ago
> Sure, but which technology should USA reproduce. Just chips, and then be late on everything else? For ICs: Design, Fabs and Packaging should all be looked at from a national security standpoint. IMHO it needs to be viable to compete with foreign fabs. Whether that looks like subsidies, tax breaks/credits, or guaranteed minimum volumes... Those each are different policy decisions that have pros and cons. We also need to consider the larger electronics manufacturing supply chain: PCB manufacturing, contract manufacturing, pick and place/automation, etc. are all extremely important and should have similar thought put into it. Today it isn't reasonable for most people to do a significant electronic manufacturing run in the US because we essentially pushed it all overseas in the 80s and 90's. There just simply aren't enough CMs and PCB houses to do large runs in the US and its the same chicken and egg problem that you have with IC fabs: You can't do it in the US because there isn't enough volume to get good pricing and there isn't a decent pricing because the PCB houses are focused on low volume runs. Ironically, when we pushed all that stuff overseas, the major reasons were because of costs (primarily) and environmental impact. At the time, many electronics had a non-insignificant amount of hand assembly and it was stupid cheap for labor in China. Coupled with the fact that companies in China just did not give a fuck about the environment, there were literally no downsides. Today, things have changed a ton. First, almost everything is surface mount and is well suited to automated pick and place machines. Second, PCBs have become easier to manufacture/design and there are new technologies that could make this even better. Third, with things like ROHS and all the lead free/environmental requirements, many of the advantages of going to a country that doesn't care about the environment isn't as beneficial, because the requirements are for the end products, not the process. It really wouldn't take a massive amount of government encouragement to really bring back most of this stuff, I think though there is the big issue that there just aren't that many direct jobs created. Most of the money is going to get sunk into machines that make things and sure, there will be people who mind the machines, but you just don't need that many people for these automated processes. Lets just say that spending $50 million on roads produces a lot more jobs than spending $50m in a PCB house. The flip side is that while the $50m on a road might help transport several billion dollars worth of goods over its lifetime, a PCB house focusing on specific types of PCBs could/will enable companies generate billions of dollars worth of profits on the goods manufactured.

azernik 5y ago

> Sure, but which technology should USA reproduce. Just chips, and then be late on everything else? Whichever ones are essential to national security. The ability to manufacture local, trusted hardware is important for military purposes, just like the ability to manufacture high-performance aircraft parts was and is important in the case that overseas suppliers are hostile or cut off.

iancmceachern 5y ago
The DMEA in Sacramento basically does this. https://federallabs.org/labs/defense-microelectronics-activity-dmea https://federallabs.org/labs/defense-microelectronics-activi...

petra 5y ago

There's a lot of talk about the tinkering culture of Shenzen, but is it really related to innovation? Has Shenzen become a startup hub? What large startups have come out of it?

deleted 5y ago
[deleted]
frisco 5y ago
Tencent, Bytedance, Huawei, DJI, SenseTime, ZTE? At least back in ~2015 when I visited, it was definitely a major startup hub.
dzonga 5y ago
don't know any but personally since it's not in the anglosphere you're bound to miss a lot of companies doing incredible stuff. just like it's easy to miss a bunch of small tech companies in the us doing incredible stuff whether for the right reasons or not.
sudosysgen 5y ago
Shenzhen is home to a lot of startups. some of them become unicorns, many of them you'll never hear about unless you're ij that specific market because they're B2B or get rebadged in Western markets. But there's a tooon of startups in every domain there. Basically most of the ebike market for example will use a lot of components from Shenzhen startups, and so do most electronics and a lot of software and e-commerce.

jollybean 5y ago

Shenzen has elements which are probably not reproducible. But 1) subsidies are what we would call a 'distortion' and those should be dealt with, possibly with anti-dumping tariffs; 2) There is such a thing as 'strategic investment' in key industries where the bar is very high and $10M from a VC won't help. This is where we need coordinated leadership. 3) There are other ways of 'building stuff'. Automation, AI etc. present opportunities for creating substitutes for those value chains. In particular, I think what the DARPA should push for is a robotic 'pair of hands' - i.e. a very easily programable set of very nimble robotic hands with accompanying vision, that can be made to do specific tasks within parameters i.e. 'pick up that part, add this other part' and handle most of the weird things that can go wrong. 4) In germs of geopolitics ... it may be more ideal to push for more diversity in sourcing and to help develop India, Malaysia, Mexico etc. towards doing at least more of those things. That's hard though.

thevagrant 5y ago
Personally, if the west can't build stuff it is only a matter of time before we are the customer and the prices start rising and our debt starts to crunch. There will be some part/component that during conflict becomes necessary but no ability to manufacture. We will have lost our knowledge and it'll take decades to recover, if we can recover at all. The billionaires will escape unscathed. I agree with point 4. If we had distributed supply chain then things may work better longer term but I am amazed that businesses still look to offshore everything without looking at the long term prospects of their workers and communities.
- sudosysgen 5y ago
  Short of an amazing breakthrough in automation, this is basically inevitable. If you think about it in terms of labour values (I know, but stick with it) the West basically gets to do unequal exchange, the average westerner consumes a lot more labour-hours than they actually work. Now the reason for that is that behind every hour of work of an average westerner there's a lot more capital helping, and more educational capital too. But if developing countries do get closer, then inevitably prices will start rising. Not all industries can benefit so much from added capital. Those that can, and the service economy, are done in developped countries. Those that can't, are done in developing countries. If the two equalize, then the inequality in labour hours will equalize and westerners will either have to work more or consume less of products that are made in developing countries.

michaelmrose 5y ago

Why would poverty be a necessary import? We don't need to let US companies pay as poorly as overseas to achieve a competitive price in fact we cannot because -You cannot get skilled labor to work for less than competing unskilled work - Welfare and benefits erase the savings. You just make it prohibitably expensive to deal with your foreign competition, subsidize it, or some combination.

xyzzyz 5y ago
Yes, and making it too expensive to import, and paying high wages results in high prices of finished products, which reduces purchasing power, and so increases poverty on the margin.
- visualradio 5y ago
  Industrial development can be promoted without creating poverty by using the tax code to eliminate any after-tax speculative super profits in real estate and finance and non-industrial sectors so that investors are forced to put their money into the real economy. Then by using financial regulations to require loans which expand quantity of legal tender in circulation to be issued on security of the replacement cost of tangible industrial capital, structures, plant, and equipment values rather than on security of the present value of future property rents. Then by replacing regressive sales, consumption, and payroll tax with a distributive ground rent tax on property owners. Promoting industrial development through regressive taxes and wage suppression is only the aristocratic form of industrialization pursued by right-wing governments when they are unwilling to eliminate after tax ground rents and non-industrial super profits enjoyed by the rich.
  - tobmlt 5y ago
    Hi, I have a question if you have time at some point: When you say “ Then by using financial regulations to require loans which expand quantity of legal tender in circulation to be issued on security of the replacement cost of tangible industrial capital, structures, plant, and equipment values rather than on security of the present value of future property rents.” This is interesting to imagine, but how? (Sorry if it’s a stupid-obvious question, but I am earnest in asking it. Perhaps I am stupid tonight.) I could certainly see regulation to kill the “future rents/superprofits industry” but not quite sure how to require loans for ... call it the future-tangible-industry-industry? Also sorry this question is formulated in such a round about way. Gleeful aside: Me thinks the status quo elite would not like it. ;) Finally; I am happy to do research -> how might you suggest I google my way into this viewpoint most directly?

gremloni 5y ago

I understand the dirty waste but why poverty?

thaumasiotes 5y ago
If your manufacturing process needs labor input, then it will happen where labor is cheap. Laborers working for cheap constitute poverty.
- jeswin 5y ago
  But if they're willing to work for cheap, wouldn't they be worse off without the manufacturing? I mean, those people are already struggling and bringing manufacturing doesn't change that.
  - sobani 5y ago
    Yes. But the question is not whether people in Shenzen are better off with those manufacturing jobs, but whether it people in _the US_ would be better off if the manufacturing came back. So then either you have to 'force' people to take Shenzen-laborer level wages in the US, or the costs of manufacturing in the US will be higher than in Shenzen.
- imtringued 5y ago
  It is poverty from our own perspective. If we stop paying them we don't have to blame ourselves. We can blame them for their own poverty. Cleaning yourself of this "moral guilt" is selfish as hell.
rtkwe 5y ago
Much of the competitive advantage that pushed manufacturing overseas was that people in poorer countries would accept lower wages for similar work compared to doing it in the US. That lowers costs a lot and makes up for other inefficiencies like prototyping time (though that has come down since so much is concentrated and can be developed locally in places like Shenzhen) and transportation.

genmud 5y ago

> Sure, but which technology should USA reproduce. Just chips, and then be late on everything else? For ICs: Design, Fabs and Packaging should all be looked at from a national security standpoint. IMHO it needs to be viable to compete with foreign fabs. Whether that looks like subsidies, tax breaks/credits, or guaranteed minimum volumes... Those each are different policy decisions that have pros and cons. We also need to consider the larger electronics manufacturing supply chain: PCB manufacturing, contract manufacturing, pick and place/automation, etc. are all extremely important and should have similar thought put into it. Today it isn't reasonable for most people to do a significant electronic manufacturing run in the US because we essentially pushed it all overseas in the 80s and 90's. There just simply aren't enough CMs and PCB houses to do large runs in the US and its the same chicken and egg problem that you have with IC fabs: You can't do it in the US because there isn't enough volume to get good pricing and there isn't a decent pricing because the PCB houses are focused on low volume runs. Ironically, when we pushed all that stuff overseas, the major reasons were because of costs (primarily) and environmental impact. At the time, many electronics had a non-insignificant amount of hand assembly and it was stupid cheap for labor in China. Coupled with the fact that companies in China just did not give a fuck about the environment, there were literally no downsides. Today, things have changed a ton. First, almost everything is surface mount and is well suited to automated pick and place machines. Second, PCBs have become easier to manufacture/design and there are new technologies that could make this even better. Third, with things like ROHS and all the lead free/environmental requirements, many of the advantages of going to a country that doesn't care about the environment isn't as beneficial, because the requirements are for the end products, not the process. It really wouldn't take a massive amount of government encouragement to really bring back most of this stuff, I think though there is the big issue that there just aren't that many direct jobs created. Most of the money is going to get sunk into machines that make things and sure, there will be people who mind the machines, but you just don't need that many people for these automated processes. Lets just say that spending $50 million on roads produces a lot more jobs than spending $50m in a PCB house. The flip side is that while the $50m on a road might help transport several billion dollars worth of goods over its lifetime, a PCB house focusing on specific types of PCBs could/will enable companies generate billions of dollars worth of profits on the goods manufactured.