I've investigated starting a modern manufacturing company. Regulation and bureaucratic impediments are immense in most countries. When a manufacturing process is new it usually gets some old, broad regulation applied to it. If you doubt me, pick any already industrialised economy and read their health and safety requirements (usually found in multiple, conflicting documents). Governments are doing their best to remain as rigid and inflexible as possible in most cases (not deliberately, usually due to incompetence, lobbyists and special interests). From my point of view, one of the hardest tasks in starting an agile, flexible manufacturing company is finding a government that won't prevent you from starting in the first place. However, I'm still hopeful of finding that magical sweet spot of talented people congregating, relaxed regulation and at least basic infrastructure.
I visited someone yesterday who has a very small manufacturing business. His product is security screening for windows.
In the middle of the floor was a very large delivery of aluminium. It has just arrived from China. He said it wasn't just the price that made him get it in. It was the fact that he could send them a design on the computer, and receive the finished product some time later. No fuss, no questions, no nosy government types.
As the article points out - everyone assumes the products are coming from China because of low wages. That's partly true, but it's much more than that. China has a flexible manufacturing sector made up of lots of tiny factories all producing something small. With a mass of government regulations you effectively mandate a minimum factory size, which mandates a minimum batch size to justify using the factory.
It's not until the ever-increasing regulations get wound back will home-grown manufacturing be able to return.
Comments
I've investigated starting a modern manufacturing company. Regulation and bureaucratic impediments are immense in most countries. When a manufacturing process is new it usually gets some old, broad regulation applied to it. If you doubt me, pick any already industrialised economy and read their health and safety requirements (usually found in multiple, conflicting documents). Governments are doing their best to remain as rigid and inflexible as possible in most cases (not deliberately, usually due to incompetence, lobbyists and special interests). From my point of view, one of the hardest tasks in starting an agile, flexible manufacturing company is finding a government that won't prevent you from starting in the first place. However, I'm still hopeful of finding that magical sweet spot of talented people congregating, relaxed regulation and at least basic infrastructure.
I visited someone yesterday who has a very small manufacturing business. His product is security screening for windows.
In the middle of the floor was a very large delivery of aluminium. It has just arrived from China. He said it wasn't just the price that made him get it in. It was the fact that he could send them a design on the computer, and receive the finished product some time later. No fuss, no questions, no nosy government types.
As the article points out - everyone assumes the products are coming from China because of low wages. That's partly true, but it's much more than that. China has a flexible manufacturing sector made up of lots of tiny factories all producing something small. With a mass of government regulations you effectively mandate a minimum factory size, which mandates a minimum batch size to justify using the factory.
It's not until the ever-increasing regulations get wound back will home-grown manufacturing be able to return.