If you own and run a business providing products, you would understand that the great importance of manufacturing...
As Bill Gates says, in the 21st Century, product selling companies with their manufacturing plants could only survive and conveyed the ever becoming of importance in developing industries.
Look at European brand name retailers of apparels and accessories...they are literally disappearing one by one each day because of those factories producing apparels and accessories for much lower prices.
That is not the main reason. Here is the catch: As Chinese manufacturers catch up those counterparts in developed nations in Europe, Americas, and Japan, their quality of product increases as a result of heavy investments in machineries and R&D while providing at much lower prices.
Here is another catch. Since my family has been involved in fashion business for over 70 years and have been manufacturing known fashion brands eyewear sunglasses, I know for fact that many of us have suffered greatly due to competition from China, India and so on.
The hurdle that many Chinese businesses faced years before was lack of skilled workers and most of all lack of modern machineries that are productive and accurate. Now the Chinese have caught up much of our skills and obtained cutting-edge technologies and expensive machineries from Europe, USA, and Japan, we are worried - the quality of Chinese goods have significantly improved, and I am not ashamed to announce that we are facing difficulties against those businesses.
There is another catch. For an example, now the Chinese have the substantial amount of skills and good machineries, they can produce goods. Until recently, Chinese have been OEM suppliers, which means that the Chinese produce goods ordered by Western businesses who often give the design and detail instructions in producing our products.
My grandfather, father, and now I am involved in this fashion eyewear business, I fear yet another aspect of this "globalized" market. The Chinese manufacturers of fashion goods have always been "lower" in terms of status while doing business. As I said above, they would take our orders and produce goods for us. They did not have the talent in designing fashion goods.
What is happening now? The Chinese have enough talented fashion designers as well as fashion designers whom they have bought from abroad to design for them.
This is the timeline:
1980 - 1990
- Western businesses dominate fashion market. They designed, manufactured and sold.
1990 - 1995
- Western businesses dominate fashion market. They designed, partially manufactured only the important parts of a good and OEM given to Chinese manufacturers to produce parts of a good that need less technology and skills in efforts to lower cost of production. Western businesses sold products.
1995 - 2000
- Western businesses are now DEPENDENT of Chinese manufacturers. However they still do most of the core works. They designed, however, manufactured almost wholly in China except very few important parts ASSEMBLED in Europe, N. America, or Japan. Western businesses sold products, as well as the Chinese now step up to obtaining rights to distribute their products to the markets they know well - China, Hong Kong etc. huge markets.
2000 - NOW
- Still most of the Western businesses design products. Now almost all the manufacturing process is done in China, and then shipped to the West only ASSEMBLED there. Western businesses and Chinese businesses both sell the products under license or exclusive rights to distribution in Chinese market.
Now - FUTURE
- Chinese obtain talented product designers. Obtain cutting edge machineries. Build efficient plants and modernize businesses computing applications. Plus, a relatively very low and competitive work force. The result? Westerners lose.
The globalization allowed developing countries like China to catch up in a speed of light. We simply can't compete against them AS OF NOW if we continue to think and do business as we have done always. The time has changed, the fall of Rome, the fall of Napoleon, the fall of Great Britain; it could be us next...
Yes, the 21 century entails information. Intelligence. But don't think this is the only thing we need to arm against strong competitors and the ones sky rocketing like China and India. They have "manufacturing" power as of now. In short, they will also have the "brain" power as much as we do. Who wins? The ones who can really manufacture COMPETITIVELY.
Gucci, D&G, Chanel, Versace, and etc. all those brand name luxury fashion optical frames and sunglasses are manufactured most of the parts in China or other developing nations then only assembled in Italy by Luxottica Group SPA or Safilo SPA leading fashion sunglasses and eyewear designers and manufacturers who obtained licenses from brand designers. How is it that your pair of Gucci luxury sunglasses has a mark "Made in Italy"? It's all about tricks in "Made in XXXX" law. To be honest, i regret to inform you that the pair of luxury Gucci sunglasses you recently bought isn't actually manufactured in Italy. But only assembled there, and most of the work that Italians do is "marking" of "Made in Italy". Tough luck.
This is just my thought after reading your post.
You can learn about IT and become an expert. But don't tell America to become such...Bill Gates was actually refering to software and hardware businesses as well as other consumer goods manufacturers. Go out there and experience more, then you will be surprised to notice your previous post was rather radical and groundless assumption speculated upon recent trends and IT craze.
Lastly, don't get me wrong. I am not an anti-globalization maniac and I am not a high school drop out who only inherited wealth from my father. I am still studying, and i am currently pursuing Management Information System.