Offshoring

http://www.economist.com/blogs/freeexchange/2014/03/offshoring

What can we learn here?  As the planetmoney piece on the costs of a t shirt showed, half the cost to the US manufacturer is shipping – so perhaps a cost basis is not the correct one here.  The labor in manufacturing is rather cheap no matter where it takes place – sometimes it’s the raw materials that are expensive, sometimes its the high quality finishing touches that are.  The translation from cost into jobs is not easy apparent and obvious.

Second, the complete absence of middle income countries suggests an issue – Mexico is home to plenty of US offshoring, partially because it is a vast market that can now afford American goods.  Maybe we have an issue here.

Third, American R and D seems far too low and concentrate din all the wrong places.

Advertisements
Standard

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s