Bolaji,
I think you have a crystal ball. Point 2 is particularly insightful. As I witnessed first hand during the outsourcing craze, many of our assembly houses started selling their pick 'n place equipment for dimes on the dollar. Also the machine shops I was working with we're picking up CNC equipment at fire sale prices. For those assembly houses that kept their capital equipment assets, the challenge was how to keep enough business coming in to keep the lines going and not lose highly trained employees. The whole thing was rather sad. China's hand labor is plentifully so I don't see it going away anytime soon. Machines have a fixed operating and maintenance cost and people don't. You can always lower the cost of human labor when times are tough. Automation may bring some jobs back here, but will it be enough to make a difference in the overall employment numbers? Maybe somewhat, but somewhat is not what we are going for. With tax de-incentives here, how many factories do ou think will want to come back until they see a distinct advantage to the bottom line for their shareholders?
Now those are most critical and important reasons for the west to revive manufacturing on a large scale, but a question to ask is: what drove manufacturing away from the west in the first place?
Was it just the desire for cheaper manufacturing cost, or weren't the benefits you listend being derived when manufacturing was being done, so why was it allowed to die in the first place?
Did companies suddenly feel their previously short supply chain, and other benefits were not significant enough for them to keep outsourcing locally?
In summary i think the "WHY" of the matter will determine its possibility and sustainability.
Africa does have a strong attraction as far as labor costs are concerned. But labor is just one component to manufacturers. African countries also need to work on infrastructure development and technology to come up to a level where they can attract hi-tech industries.
TiOluwa, How about the opportunity to regain some control over the supply chain, provide jobs for their citizens, gain some political stability, revive consumption (unemployed folks can't buy much), reduce pressure on the society from having a large unemployed workforce, rebalance the geo-economic global landscape, avoid being swamped with products from a poorly regulated economy, ensure fairness to workers and sleep better at night knowing your country is not being systematically starved of much needed work?
For the companies, how about a shorter supply chain, avoidance of unwanted publicity about a production system situated in a country that allows its citizens to be poorly treated by manufacturers, assurance a partner is monitored, regulated and forced to comply with globally accepted standards and being able to sleep at night knowing if a plant blows up it won't be because of negligence that could result in a very expensive lawsuit in a local court and possible reduction in market value?
So invariably, what will drive the west back into manufacturing is the economic pressure, the increasing desatisfaction from outsourcing to china, and the battered ego of the west.
I would like to know if these are really sustainable reasons to go revive the weak manufacturing sector?
What does the west have to offer that china has failed to offer?
I agree with you but Africa is already an attraction to investments and investors and the list keeps increasing day by day. But then its only for investors that are ready to over-look the challenges.
@TaimoorZ, I don't think India is more attractive comapred to China. India is also facing inflation problems just like China. Moreover India faces major problems like corruption. Also the government at the centre is very unstable because its a coalition government. So comapred to India, China is in better position. I guess African countries might attract lot of investment.
@Chipmonk, I am not sure if this is true. Are you aware that recently IBM and GLOBALFOUNDRIES began its first production At New York's Latest Semiconductor Fab ? Moreover Intel has also started building world's first 14nm fab in Chandler, Arizona. So its totally wrong to say that semiconductor game is almost over.
@Bolaji thanks for the post. I totally agree with most of the reasons you pointed out. I think rising oil prices will also help west get back some manufacturing activities because rising oil prices will push the transportation cost higher.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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