That's an extreme example of the problem, but I think it's endemic in the UK being so centered around the financial industry. While the middle class is centered around the cottage industry of rising property prices. The most ambitious people go into finance, not businesses where you actually have to make something or deal with employees. The factory, employees and culture surrounding that then just become tradeable tokens that will have their surplus value extracted and then discarded. Meanwhile it's hard to get ambitious, effective managers because people with that skill set are earning a lot more elsewhere in the economy.
A lot of what makes a good manufacturing process is, effectively, oral culture - passed on through apprenticeships and shadowing skilled technicians. Attempts to document it are surprisingly hard (this is why ISO9001 et al are unpopular). So in order to get a good factory startup you have to get experienced staff, which is easier in a cultural location that already has them.
That is also what will ultimately bring us down. I have a suspicion that a more general formulation of this effect is a major cause of why civilizations collapse.
Management styles and staff reflect this...
Edit: I guess what I'm saying is; things will stratify. Someone will always be "paying the rent".
those people are called the poor. and they get the bad end of the stick.
As with all parasitic systems, sometimes the host is killed and sometimes the host fights back.
Right now the host doesn't appear to be fighting back very effectively.
The latter is largely how Trump managed to grow his wealth; he's pretty bad at the former.
This provides a good summary of this principle: https://en.wikipedia.org/wiki/Georgism
As a counter point, it felt like the engineering talent is still from European countries - note that the plant manager is European, and the machinery they use in the factory is again by a European company. So the upper management that you say moved to finance is still in the industry.
Another reason I think is what some sibling comments of yours have pointed out - lax rules and willingness to co-operate with tech advancement (at the risk of environmental degradation)
Read Thomas Sowell's Culture and Migrations for more on this and the historical evidence.
https://www.amazon.com/Migrations-Cultures-World-Thomas-Sowe...
You can see similar trends with respect to telecom infrastructure adoption in developing nations versus developed nations.
Another advantage China has is population. When you have well over a billion people, you can afford to throw them at the problem and try out numerous things. Failure becomes an option because they have both the people to try it, and the space to try it in.
Their government also has a willingness (unlike in the US, and not as common in Europe anymore) to step in and subsidize costs to encourage moving in a certain direction in order to grow their national economy. The US, in particular, doesn't do this or does it haphazardly due to the frequent changes in political leadership (we could never create and stick with a 10 year plan, for instance).
Not to mention political point scoring over large job creation projects. With the rise of robot workers factories such as these might find themselves unwelcome in previously accommodating areas where their size, logistic needs and impact on the surrounding infrastructure were previously offset by job creation.
So at this sort of scale it's as much a question of logistics and impact to the surrounding area as it is one of pure engineering.
I also think the natural independent streak running through America (and Canada / Israel / UK / AUS to a lesser extent) draws more of us to software because you don't need to reach consensus to get things done.
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.
The benefits of network effects that cause software companies to concentrate in a few areas are even more pronounced in the hardware field.
The difference in resources and capacity are so vast, businesses like Apple have depended on these differences to make their huge profits.
Steve Jobs has advocated US jobs and US factories and has said he would do everything he could, but the truth is, even Apple is/was too dependent on Foxconn, and there would be no Apple as we know it otherwise.
1. '"You can't find that many in America to hire," Jobs told the president, according to his biographer, Walter Isaacson. "If you could educate these engineers, we could move more manufacturing plants here."' [1]
2. When Apple needed to change the glass on their iPhones last minute, Foxconn obliged. The flexibility, speed, and sheer scale of their assembly operations are unmatched. [2]
3. Foxconn leverages Chinese work ethics and culture to its maximum. The world marveled at 2008 drummers in perfect sync at the Chinese Olympic opening of 2008 [3]. Now just imagine them building phones.
It also doesn't help that costs are lower.
So Apple wouldn't exist without Foxconn, and Foxconn wouldn't exist without China.
Now Foxconn is outgrowing China, and is building factories elsewhere. But Foxconn city isn't going anywhere anytime soon, and arguable, whatever they do elsewhere will never match what they've build in China, nor will they ever cease to be dependent on its output.
When Apple fails, you know the scale of the problem.
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[1] http://money.cnn.com/2012/10/17/technology/apple-china-jobs/...
[2] http://www.nytimes.com/2012/01/22/business/apple-america-and...
[3] https://www.theguardian.com/sport/2008/aug/09/olympics2008.o...
As I understand it, the problem is that China is getting too expensive for Foxconn.
Wages are rising in China, so Foxconn is hunting for somewhere cheaper.
In the US they will build factories and do the best they can with a US based factory. And same with everywhere else. Each location will give rise to various cost and performance attributes, but at the end of the day, they will:
1. Compete regionally with factories that share those exact same constraints.
and
2. Be Foxconn. All their factories belong to them, giving them unparalleled leverage and output capacity than the mere sum of their parts.
US companies will flock to Foxconn's "US" factory. It will be in quotes because nothing will stop them from doing absolutely everything beyond what will qualify as Made in USA elsewhere to minimize costs and maximize performance, as do US companies do already. But no one is Foxconn.
I also suspect China, as a whole, is willing and able to move mountains (perhaps literally?) to win factories. Entire cities exist just to build "widgets" for the rest of the world.
I remember a similar article/editorial that made similar points about electronics production. China has both the engineering professionals and the factory line staff on-hand to spin up massive efforts in short time. The US simply doesn't have that many people in any one place like China does.
Add to that snowball effects...everything else is there. Everyone else is building there....it is physically closer to things, but land is still (relatively) cheap.
Compare the permitting process/cost + available land + available workforce + general cost of doing business + general government mindset + a well established supply chain to distribute products outward + a poorly tapped market for cars locally (local versions are truly terrible) + lack of political uncertainty in China as compared to Japan. Japan, Indonesia, the US, Ghana, etc. might better on a few of those metrics but the overall model makes China a minimum in terms of risk.
You add to that that as companies increasingly globalize they are developing significant competencies to build factories and do business in places further afield. First this was partnered outsourcing, because it bought a partnership that knows the local affordances and externalities. Now that they have the competency, they can do it anywhere because they have learned to do it anywhere[0] and look to run the minimization routine. Toyota is actually shrinking the size of plants so they can be more agile not just in models and output but in plant location...right now the math says china, later it might say Africa.
That said, there's a whole bunch of other good explanations in this thread. Very informative.
This obviously can’t continue as china becomes more serious about environmental protection.
Also, I’m not sure how staying off the board will actually clean up their encoronments.
To say it does not care about environment is just plain ignorant. Anything is planned top down. They care anything and everything, as long as there is actual value or risk.
> This obviously can’t continue as china becomes more serious about environmental protection.
So who is being ignorant? Or are you claiming china was doing this all along for the last 30 years?
Anyways, I’ve been in a Southern chinese City during winter, I know what life is like without indoor heating.
I thought you mean they are not going to do anything because of their tracking records.
Maybe that is happening now (I still reserve judgement). I get what they did rural coal heating (but I’m sure there are plenty of cold villagers who didn’t get enough subsidies to use gas or electricity). It is definitely helps the air this season, though the real test will be January and February, which were actually regressions in 2017 vs. 2016.
Expertise means that the architects and construction guys have done it before. The regulators get it.
When I was in the business of building out and managing on-premise data centers, our team could get a project off the ground in a few days. We knew the vendors, the contractors, etc. Now? It would be tougher.