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by Fricken
3353 days ago
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I'm so impressed with Shenzen, but there's nothing shocking about it. I've been following China's rise up the value chain since the late 90's. It is steady, predictable, and inexorable. They're not done yet. If America doesn't get serious about invigorating it's high tech manufacturing ecosystem, so we have the talent and supply chain needed to stay competitive innovating in the world of atoms they way we do with bits, we're gonna have a bad time... if we aren't already. (Here's looking at you, GoPro) |
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I'm convinced sufficiently that America has lost enough of that ecosystem and will continue the erosion trend enough for the foreseeable future that I'm giving serious consideration to physically moving closer to China if not establish physical residency there, a possibility that was unthinkable only 10 years ago. I don't think China will stop at atoms, and challenging US dominance in bits over the coming decades is no longer fanciful; maybe not in my generation, but perhaps my grandchildren's. The value-over-time delivered from "owning" an ecosystem was and is vastly underestimated by most US business leadership that is simplistically yield-chasing (focusing on ever-larger margins). Ownership in this context is the ability to iteratively turn around half-baked ideas into fully-executed forms cheaper and quicker than sourcing from an ecosystem where the local ecosystem's embedded culture (both socially and professionally), primary language, lingo, nuances, time difference, etc., add up to a significant edge.
What I'm increasingly seeing is ever-more fragile design cycles in the US, with an emphasis upon getting it right as far up front as possible (leading to highly dysfunctional organizational behaviors arising from the gaming of the metrics around "getting it right"), and tossing the design over the fence to the "lower value rungs". There doesn't seem to be an awareness that continuous, small feedback loops built around fast iterations are an excellent method to break up complexity of an effort too large for one person or even one small team to load into working memory all at once. I even see this a lot in commercial sector "agile" software development efforts, where even if there is some feature/area that is completely terra incognita to the team, there is little to no accommodation made to set aside generous time to perform discovery, experimentation, and trialing.
The focus upon ever-larger margins leads to value-ladder-justifications like ditching PC manufacturing, then wondering why your sales team all of the sudden can no longer organically find opportunities like they did before. Those PC's might have had "terrible" margins, but they were a built-in excuse for on-the-ball sales teams to uncover opportunities for cross- and up-sells of other products/services while discussing the latest PC refresh, for example. All that discussion that flows from those "low value" goods? The Chinese and Indian firms hold them now, and based upon what I'm seeing in the field, they know what they hold in their hands and they're inexorably leveraging those opportunities.