Productive Vs. Unproductive: Manufacturing Vs. Financialization

06-06-2011 • OfTwoMinds.com/blog

It's not just moving the assembly offshore, it's moving the entire value-added chain that feeds it. As my friend G.F.B. recently noted, the initial invention that is the obsession of America and supposedly its great advantage in the global marketplace leaves off the real value-added proposition, which is the development of the later models and iterations. Place the production elsewhere and keep the design staff in the home nation is an excellent way to lose the design of the actual parts and workflow--the real value added. Apple has been able to keep ahead of competitors by integrating software that is difficult to copy into hardware, but it not the typical case, it is the outlier, hence its outsized value. As I repeatedly point out, Apple, Google, Facebook and Twitter together have relatively few domestic employees. As production is overseas, then that's where the design jobs go, too, eventually. You have to understand the entire value chain, not just the assembly costs. The U.S. culture denigrates skilled labor and glorifies the C.E.O. and innovator as god-like heroes. Other nations, notably Germany, maintain a value and education system which recognizes and nurtures technical skills.