Why China makes our electronic products (it’s not just cheaper labor)

January 22, 2012 by Amara D. Angelica

iPhone 4S (credit: Apple Inc.)

It’s not just that workers are cheaper abroad, according to an important article in The New York Times Saturday. Most of the components of cellphones, computers, and other electronic products are now manufactured in China (and European and other East-Asia countries), so assembling the device half-a-world away would create huge logistical challenges, the article points out.

China now has a far larger supply of qualified engineers than the U.S. And China’s factories are far bigger and can react faster than those in the U.S.   “Made in the USA.” is no longer a viable option for most electronics products. So, many companies have closed major facilities in the United States to reopen in China, and middle-class jobs are disappearing as the nation has stopped training enough people in the mid-level skills that factories need.

“Economists debate the usefulness of those and other efforts, and note that a struggling economy is sometimes transformed by unexpected developments,” say the Times writers. “The last time analysts wrung their hands about prolonged American unemployment, for instance, in the early 1980s, the Internet hardly existed. Few at the time would have guessed that a degree in graphic design was rapidly becoming a smart bet, while studying telephone repair a dead end.

“What remains unknown, however, is whether the United States will be able to leverage tomorrow’s innovations into millions of jobs.”

So it seems to get down to this: what exactly are tomorrow’s innovations — what’s the next “Internet,” what skills will be required, and how can the U.S. (and elsewhere) compete?

Amara D. Angelica is Editor of KurzweilAI