Wednesday, April 17

What China has that the United States Doesn’t

It is 1980 and Shenzhen, a Chinese city less than an hour’s drive north of Hong Kong, is an unpaved, rutted network of roads filled with homeless people and small farmers slaughtering chickens along the side of the road.

Now the city is the reason why the United States will never need to manufacture electronics.

From making cheap consumer goods to manufacturing the world’s (i.e. Silicon Valley’s) latest and greatest electronics, Shenzhen is now a large bustling modern city that rivals that of Shanghai and Hong Kong.

What many Americans don’t understand is that Silicon Valley doesn’t need to manufacture their own products; outsourcing to a foreign country is more cost effective.¬†Electronic design and manufacturing don’t always occur under one roof. Shenzhen is to making the products as Silicon Valley is to designing them — both perform their part at a rapid rate.

Pooling resources and securing raw materials are two of the benefits offered by the electronics manufacturing model, which Shenzhen is all too familiar with. Sourcing and manufacturing these products in Asian countries helps keep labor costs extremely low.

At one of the city’s many international hotels (Hilton, Four Seasons, etc.), a guest will find young American engineers and entrepreneurs who have traveled the 15 hour long flight from San Francisco to Hong Kong in order to make sure the manufacturing process of their company’s products is running smoothly. They are also there to troubleshoot and to take their product from the drawing board to the production line.

What is especially unique about Shenzhen is that the city’s companies thrive on building foreign country’s new products — especially America’s. There is bound to be a factory or team of product engineers in the city just waiting for an American businessman to come by and pitch their idea to them for not much cost at all.

With a population of 10.35 million, Shenzhen does everything on a large scale: It boasts the largest library in the world and the largest city hall as well as the highest concentration of companies solely focused on supporting the world’s constant demand for the next greatest tech gadget.

Electronic design and manufacturing companies in the city are all nestled tightly within a two-hour radius. Some companies boast derelict-looking cement structures, while others display well-manicured office parks similar to the ones in Japan or the Mid West.

What this unique little corner of the world does for mankind is produce the highest volume of consumer electronics in the world. Anything from batteries, to LCD displays, to motors and switches, to microphones and touch screens. If any electronics designer can think it, they will build it.

The United States simply cannot put consumer electronic products to market as quickly as the factories can from China. The natural resources and raw materials simply aren’t available to this country, and the “we can do it” attitude has all but faded away from the American mind set. Tech companies who have tried to implement the manufacturing process ran into the issue of having to pay workers who do not manage their time well while also worrying about import costs for the raw materials.

All things considered, electronics manufacturing just isn’t in the cards for today’s America. The country does not have the manpower to turn out products at rapid fire rate while still being efficient.

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