hoos

(online)

Justin Jacoby Smith is an organizer, web geek, Buddhist, and poet.

we used to make things in this country (the extraction of america)

ASUSTek, the Taiwainese electronics manufacturer, used to make circuit boards for Dell. Then they came to Dell with a proposition: let us make your motherboards. We can do it faster and cheaper. Dell agreed. Why not? Profits went up. ASUSTek came back and offered to take over motherboards entirely. Then computer assembly. Then supply chain management. Then design. Dell accepted each offer in turn.

Then ASUSTek went to the retailers and said "hey, we can make entire computers over here in Taiwan, and for cheaper than Dell."

Bingo. One company gone, another has taken its place. There’s no stupidity in the story. The managers in both companies did exactly what business school professors and the best management consultants would tell them to do—improve profitability by focus on on those activities that are profitable and by getting out of activities that are less profitable.

So the decline of manufacturing in a region sets off a chain reaction. Once manufacturing is outsourced, process-engineering expertise can’t be maintained, since it depends on daily interactions with manufacturing. Without process-engineering capabilities, companies find it increasingly difficult to conduct advanced research on next-generation process technologies. Without the ability to develop such new processes, they find they can no longer develop new products. In the long term, then, an economy that lacks an infrastructure for advanced process engineering and manufacturing will lose its ability to innovate.

If you want to understand why we don't make things in this country anymore, and why it goes so much deeper than Toyota vs GM, you really need to read "Why Amazon Can't Make A Kindle in the USA"