The Lonely Future of Buying Stuff

This really depends on what kind of goods you’re trying to manufacture.

Speaking from firsthand experience, if you want to have anything with a circuit in it prototyped, picking a Shenzhen area factory to work with has many advantages. You can have new circuit boards printed and tested within a day. This kind of ecosystem may be hard to replicate elsewhere.

On the other hand, for many other physical products proximity to the end customer is becoming the primary concern. Consider that as real wages in China are increasing, you’re looking at a 20-30% wage increase over the last 4-5 years in China. This means that any cost advantage over other countries is rapidly closing. Chinese raw materials and electricity are no cheaper than in the rest of the world. Due to new factors like increasingly stringent environmental regulations, many of these other inputs are increasing in cost. (http://www.scmp.com/news/china/economy/article/2058175/chine...)

If I want to have a plastics part mass produced, there are a number of regions in the US where there is near-parity with China when you factor in shipping costs, insurance, tariffs, the costs of delays and defects etc.

For industries like textiles, there’s already been significant flight to India and Southeast Asia.

> a lot of software written in Silicon Valley

The vast majority of software are written a) in house b) outside of SV c) in Java and C#

Even if the expertise for this is all in China, why don't the Chinese put a shoe factory/machine in California so I can have my custom made shoes two weeks sooner and cheaper?

It doesn't even require any human experts to run, so why does it matter where the experts live?

"First, humans are still necessary - to build the factories, to operate them, to act as security guards - and the cost of those humans is still lower."

A lot of this work will be automated in the coming decades to the point where the effect of wage costs is marginal. In addition, the salaries in developing countries will continue to increase, eventually catching up Western nations. At that point the main factors are probably tax/import policies, price of enercy etc.

But now you're assuming the labor was selected due to proximity to the raw resources when conventional wisdom says the labor was selected purely on cost.

I work for a Canadian company that manufactures lighting components near Guangdong. Chrome plating is almost impossible to do in North America at a cost competitive price point. Just an anecdote about the conditions there; The supplier we use chome plates parts using a hexavalent chromium plating technique as opposed to a trivalent technique, irrespective of the environmental hazards that come along with it (As far as I know it's produces carcinogenic by products). I didn't see one worker with a respirator on or disposable gloves during my visits, health and safety seems to be an after thought. One of the holding tanks that for the byproduct plating solution was leaking from a fitting into the soil below, the surrounding areas are mostly farm lands (not sure what is in the solution that was leaking, but I would assume you wouldn't want it taken up by food crop). For us it's definitely an environmental sidestep. Really the only way for the west to become cost competitive for low end industrial manufacturing is going to be through a softening of environmental regulations or China's will have to close the gap with improved regulations.

The USPS actually subsidizes the shipping of packages from China to the US. It is due to a treaty that was signed before China was an indistrialized nation.

The point of the article is that humans aren't making shoes anymore. So who has the best human expertise is irrelevant.

The fully automated shoemaking machine could be placed anywhere the raw materials could be shipped.

I don't think they're trying to be racist against robots but wondering why Chongqing Future Robot Co Inc wouldn't put a shoebot in Phoenix to reduce the amount of shipping the shoe requires.

A secular shift in the economics of production by definition can’t be monopolized, thus competition should, as it has through history, force the cost of goods towards the marginal cost of production.

Believing this does not require belief in the goodness of people nor some abstruse economic theory+, just look at the examples of history.

+I love such economics but must admit its predictive power has been poor.

Competition.

So your competitors are also able to automate the supply chain. So you have to too. To be competitive.

Therefore all of the people doing backend tasks with spreadsheets and 'copy/paste' of addresses, sku codes etc. get to be made redundant. The computer does most of it with the process being customer driven as much as possible.

However this is not where the story ends. To be competitive in this new online marketplace where reviews are everything, there is a new requirement for skilled customer service agents, able to do the things that were not automated, i.e. the things that need customer interaction, product knowledge and skill. There is a need for the language support, e.g. French/German/Italian/Spanish/Portuguese and more if selling into the E.U.

So now instead of having a room full of data entry people doing dull work there is now a room full of people doing thinking person work, where skill and independent thought is helpful.

These new staff need to be treated differently, they can't be hired and fired ad-hoc, they need to be paid properly and given opportunities to grow with the company.

Because you now have intelligent staff it is also possible to involve them in more things, so being able to compete in foreign language markets becomes much more possible as there is now in-house translation facilities from someone customer focused and with product knowledge.

When speaking with customers the 'intelligent human agents' will have a more insightful interaction, so less 'lonely' than when everything was manual and not automated. The agents will essentially be dealing with new edge cases, not routine interactions, e.g. to get address details from a customer.

Because the 'intelligent customer service agents' are creating value they are not a cost in the way the previous 'data entry agents' were.

It is not all doom and gloom, there will be winning companies that will thrive by putting the customer first and hiring better people that are paid better.

The fact that it has happened over and over, almost without fail, in the entire history of human economic activity?

Which all comes from taxing... Jeff Bezos?

This all feels like we're sleepwalking into a nightmarish hell far beyond A Brave New World or 1984. Amazon, drones, mass surveillance, erosion of privacy. The day will come when we no longer can opt out.

That, or we have a time-based economy. Physical goods may become accessible to all, but time is still a limited resource, and collaboration with others can save us time, and help to strengthen communities.

I'd guess the desire not to interact with people, whether through this, or telecommuting, is disproportionately represented here (HN). But not at all a norm in the US. People here shop online because it's the path of least resistance, not because of a specific avoidance of participating in the world.

I prefer shopping offline, to have more excuses to get out, not fewer. (Within reason of course, some stores/experiences really are worth avoiding.)

>>> little human pleasures.

Interactions with humans just generally leaves me frustrated and annoyed

I have no desire to talk with, or interact with someone while buying my apples or onions. In fact I shop at larger big box stores specifically because the employees are in different and do not attempt to engage with me. I want to get what I need and get out in the most efficient manner possible, small talk and inane banter waste time.

One would assume drone delivery would be faster, and drones would likely handle the packages better, unlike some (many) drivers who take pride in how much damage thy can inflict on a package including tossing, dropping and kicking packages