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The same logic applies to the management and design. There is no reason a cheaper workforce cannot do that as well. I wonder why that has not been done yet...

by consp 5y ago

robomartin 5y ago
> The same logic applies to the management and design. There is no reason a cheaper workforce cannot do that as well. This is definitely the case. There's a huge pool of talent outside of the US and Europe. One of the mistakes people tend to make is this assumption that you can torture (being dramatic) capital and it will not react, it will just bend to the pressure. This is as wrong as can be. Capital is the easiest thing to move from place to place. And capital, with enough pressure, will always move where it can achieve the same outcome with a lower pain-in-the-ass factor. Despite the popular indoctrinated meme, no, it isn't about greed. It's about getting shit done and staying in business. Our "leaders" over the last 50 years or so, setup a perfect storm, a chain reaction, that is unavoidable for anyone in manufacturing save a few corner cases (military contractors being one category). Say you manufactured coffee mugs. You are doing great. You have two other competitors with equal market shares. One of them decides they'll be smart, move manufacturing to China, lower their prices and grab more market share. They do the math: They are going to make LESS per unit, but think they can increase their market share to compensate for that, and more. They come into the market with their new Chinese made line. You lose a bunch of market share. So does the other competitor. What do you do? You can (1) lower your prices and operate at a loss; (2) lay off a bunch of people to reduce labor costs and use automation to lower your costs; (3) shut down the business and exit the market or (4) move your manufacturing to China. That's it. There might be other options which are generally combinations of the four options given above. You move you manufacturing to China. A few months later, the remining competitor does the same. A year later all three companies are manufacturing in China. They all have about the same market share they had before the move. They are all selling at lower retail price point, which means they are all making less money! Oh, it doesn't end there. A few years later the same Chinese manufacture that makes their coffee mugs decides to sell directly in the US at a lower price. One of the advantages they have is that our "leaders" signed a treaty that makes shipping within the US free for any Chinese product (within certain limits). A Chinese company can get a product from Los Angeles to NYC for virtually free. A US company has to pay full rate for the same shipping. Two out of the three companies go out of business and even more people lose their jobs. > I wonder why that has not been done yet... Oh, it has. Virtually every discipline you can think of has been offshored. From accounting to software engineering and more. I have a quick personal example I can share: We needed to do a bunch of accounting analysis that required a bunch of data entry. Our accounting firm wanted somewhere in the order of $50K to get it done. We got it done by a team of business students in Romania for about a tenth of that. For security/privacy all we had to do was write code to redact (black out) private information (names, addresses, account numbers, etc.) on the thousands of documents they processed. This work required knowledgeable human analysis, so it wasn't a simple matter of OCR -> Excel -> summarize. Capital always tends to find the most efficient way to get things done. Except in government. In that case, assume half is wasted and that's probably about the right domain.
fock 5y ago
Isn't that, what the CCP is doing: Xiaomi, Huawei, all the tooling companies which died completely in America ... They all do their own management and design. Seems that that split on the nice, lawless markets of our globe only profits few a short time (if you have a sufficiently ruthless and intelligent adversary who sees that he could split the spoils of the few between many...).

The same logic applies to the management and design. There is no reason a cheaper workforce cannot do that as well. I wonder why that has not been done yet...

by consp 5y ago

The same logic applies to the management and design. There is no reason a cheaper workforce cannot do that as well. I wonder why that has not been done yet...

robomartin 5y ago

> The same logic applies to the management and design. There is no reason a cheaper workforce cannot do that as well. This is definitely the case. There's a huge pool of talent outside of the US and Europe. One of the mistakes people tend to make is this assumption that you can torture (being dramatic) capital and it will not react, it will just bend to the pressure. This is as wrong as can be. Capital is the easiest thing to move from place to place. And capital, with enough pressure, will always move where it can achieve the same outcome with a lower pain-in-the-ass factor. Despite the popular indoctrinated meme, no, it isn't about greed. It's about getting shit done and staying in business. Our "leaders" over the last 50 years or so, setup a perfect storm, a chain reaction, that is unavoidable for anyone in manufacturing save a few corner cases (military contractors being one category). Say you manufactured coffee mugs. You are doing great. You have two other competitors with equal market shares. One of them decides they'll be smart, move manufacturing to China, lower their prices and grab more market share. They do the math: They are going to make LESS per unit, but think they can increase their market share to compensate for that, and more. They come into the market with their new Chinese made line. You lose a bunch of market share. So does the other competitor. What do you do? You can (1) lower your prices and operate at a loss; (2) lay off a bunch of people to reduce labor costs and use automation to lower your costs; (3) shut down the business and exit the market or (4) move your manufacturing to China. That's it. There might be other options which are generally combinations of the four options given above. You move you manufacturing to China. A few months later, the remining competitor does the same. A year later all three companies are manufacturing in China. They all have about the same market share they had before the move. They are all selling at lower retail price point, which means they are all making less money! Oh, it doesn't end there. A few years later the same Chinese manufacture that makes their coffee mugs decides to sell directly in the US at a lower price. One of the advantages they have is that our "leaders" signed a treaty that makes shipping within the US free for any Chinese product (within certain limits). A Chinese company can get a product from Los Angeles to NYC for virtually free. A US company has to pay full rate for the same shipping. Two out of the three companies go out of business and even more people lose their jobs. > I wonder why that has not been done yet... Oh, it has. Virtually every discipline you can think of has been offshored. From accounting to software engineering and more. I have a quick personal example I can share: We needed to do a bunch of accounting analysis that required a bunch of data entry. Our accounting firm wanted somewhere in the order of $50K to get it done. We got it done by a team of business students in Romania for about a tenth of that. For security/privacy all we had to do was write code to redact (black out) private information (names, addresses, account numbers, etc.) on the thousands of documents they processed. This work required knowledgeable human analysis, so it wasn't a simple matter of OCR -> Excel -> summarize. Capital always tends to find the most efficient way to get things done. Except in government. In that case, assume half is wasted and that's probably about the right domain.

fock 5y ago

Isn't that, what the CCP is doing: Xiaomi, Huawei, all the tooling companies which died completely in America ... They all do their own management and design. Seems that that split on the nice, lawless markets of our globe only profits few a short time (if you have a sufficiently ruthless and intelligent adversary who sees that he could split the spoils of the few between many...).