Here is a terrific story from the New York Times on the globalization of Apple. The company has moved jobs around the world to both save on costs and to take advantage of the more flexible and better quality manufacturing facilities and talent that are in Asia.
The reporters present a very balanced story; this is not just about a greedy company willing to exploit powerless workers to get rich. It has been forced to diversify production to become more efficient and produce better products. Some contracted workers in Asia work 12-hour shifts and 6 days per week. When an employee in northern California was asked if he would do the same, he said he wanted his Saturdays free so he could watch his kids play soccer.
I saw one big thing missing from the piece. Although from an employment perspective Asia and China have benefitted imensely from globalization of the consumer electronics supply chain, China participates at the lowest value-added segments of the production of the iPhone. Most of the value-added comes from the US, and most of the profits go to Apple, not suppliers. China is having an extremely difficult time moving up the value-added chain; the story highlights China's ability to provide a flexible workforce and modify manufacturing on a dime; but Chinese firms contribute little to the design of the iPhone or other popular consumer electronics.
The difficulty of being more innovative is a central concern across China. Following the death of Jobs, there was a big conversation on blogs here, "Why does China not have a Steve Jobs?" So far, the main solutions have been to crank out a lot of engineers and scientists, throw a lot of money at R&D, ramp up establishing patents and standards, and provide protection for domestic firms against foreign rivals. Still missing is encouraging creativity in the educational system, opening up the media and flow of information, more seriously protecting IPR for innovators, and making capital more accessible to private business. My guess is that there are lots of innovative people in China, they just live in a non-supportive environment.
Hence, for the time being, China is mainly benefitting on the employment side of hi-tech; if it ever manages to move on reforms that would promote product-level innovation, then China would be in the driver's seat globally. So it seems as if the US and China are mirror opposites. China needs the US's innovative environment, and the US needs a deeper sci-tech workforce and better infrastructure to support manufacturing. Not surprising their economies are so intertwined.
Full disclosure: I'm an iPhone 3Gs owner and just switched from a Dell to MacBook Pro laptop. I love both, but I hope Apple will make Word work better on my Mac; it has been far from a seemless transition, which is the fault of Apple and Microsoft. Also, why on earth can't I easily delete text in front of the cursor (and not just back-up)? I can do so in email and on the web using Ctrl-D, but that does not work in Word; and really, I should just have to hit one key for this, not two. I suppose these are minor complaints, but Apple should be all about the user experience.
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