Saturday, August 16, 2003
The loss of 195 jobs to Mexico is causing one Indiana community to reassess. State EDPros are right to focus on higher productivity, higher value jobs (which require continuous investments in brainpower).
Some manufacturing operations that require routine skills will be difficult for us to hold. The one mistake in our thinking, though, is to lump China and Mexico together.
Mexico has proximity and a low wage base, but little else. China has an enormous pool of low skilled labor and strong logistics (particularly in the Pearl Reiver Delta around Hong Kong). Wal Mart thrives off this combination.
But China also has a sophisticated technology base and low wage, highly skilled workers, too. This combination is far more worrisome.
Ten years ago, I was in Shenyang working with the UN Development Program. Shenyang is the site of General Motors' first Chinese joint venture, a business to assemble light duty pick up trucks from knock-down kits. The business turned out to be a disaster.
Fast forward to Shanghai today. Now you can see on the streets a Shanghai Buick with the fit and finish equivalent to Buicks in the US. That spells trouble.
posted by Ed Morrison |
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Some Background on EDPro Weblog
The purpose of this weblog is to help economic development professionals -- EDPros -- keep up with the changes sweeping our profession. Strap on your goggles. It's a whole new game. There are no experts any more. The only place to learn about economic development is from other EDPros who are doing it.
One other point: the prevaling approach (paradigm, if you like) in economic development is shifting from competition to collaboration. There are a lot of reaasons underlying this shift, but here's the important insight: You, your community, and your region will do better by collaborating and sharing information.
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Speaking and workshops on Open Source Economic Development
As the idea of Open Source Economic Development starts spreading, more people are asking about it. Visit the I-Open web site to learn more. My colleagues and I are happy to explain the basic concepts in a talk or a workshop. E-mail Susan Alshuler if you'd like to learn more about workshops and speaking.
Background on Ed Morrison
Download some background information on me here.
Indiana adjusts to job losses to Mexico
