Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: tonka552000 who wrote (29874)	10/10/2003 12:03:24 PM
From: Jim Willie CB	Respond to of 89467

some good quotes from Roach's Oct 6th essay A powerful confluence of three mega-trends is driving the global labor arbitrage -- the first being the maturation of offshore outsourcing platforms. China personifies the critical mass that has now been attained in new manufacturing outsourcing platforms. Built on a foundation of massive inflows of foreign direct investment -- China is now the world’s largest recipient of FDI -- and domestically funded infrastructure, the Chinese factory sector has become a critical ingredient in the global supply chain. Fully 65% of the tripling of Chinese exports over the past decade -- from US$121 billion in 1994 to US$365 billion in mid-2003 -- is traceable to the outsourcing dynamic of Chinese subsidiaries of multinational corporations and joint ventures. Of course, China is hardly alone in the outsourcing business. Similar patterns are evident elsewhere in Asia, as well as in Mexico, Canada, South America, and Eastern and Central Europe. ..... Rapid growth is also occurring in the offshore outsourcing of services. Such activities span the value chain -- from low-value added functions such as transactions processing and call centers to high-value added activities such as software programming, engineering, design, accounting, actuarial expertise, legal and medical advice, and a wide array of business consulting activities. Increasingly, service sector outsourcing is shifting to intellectual capital -- heretofore thought to be the sheltered mainstay of economic activity in the wealthy developed world. ..... E-based connectivity is the second new mega-trend behind the global labor arbitrage. This is the first business cycle since the advent of the Internet. Say what you want about the Web, but I believe it has been a transforming event on the supply side of the global macro equation. For manufacturing, it puts new meaning into the real-time monitoring of sales, inventory, production, and delivery trends that drive the logistics of global supply chain management. And it provides a new transparency to the price discovery of factor inputs and upstream materials and supplies -- offering efficiency breakthroughs never before attainable. For services, the Internet enables outsourcing to penetrate an entirely new realm of economic activity. The intellectual capital of research, analysis, and consulting can now be transmitted anywhere in the world with the click of a mouse. For example, a systems problem in New York can be fixed by a software “patch” written in Bangalore. ..... The new imperatives of cost control are the third key ingredient of this equation -- in effect, the catalyst that brings the global labor arbitrage to life. In an era of excess supply, companies are lacking in pricing leverage as never before. As such, businesses must remain unrelenting in their search for new efficiencies. Not surprisingly, the primary focus of such efforts is on labor -- the bulk of production costs in the developed world; in the US, for example, worker compensation still makes up more than 75% of total domestic corporate income. And that’s just the point: Wage rates in China and India range from 10% to 25% of those for comparable-quality workers in the US and elsewhere in the developed world. Consequently, offshore outsourcing that extracts product from relatively low-wage workers in the developing world has become an increasingly urgent tactic for competitive survival by companies in the developed world. Mature outsourcing platforms, in conjunction with the Internet, give new meaning to such tactics. / jim

To: tonka552000 who wrote (29874)	10/10/2003 1:15:40 PM
From: elpolvo	Read Replies (1) \| Respond to of 89467

tonka truck- Q: ...what is it that we make here??? A: Ammunition and ADS (ammunition delivery solutions) including WMDs. -polvo

To: tonka552000 who wrote (29874)	10/10/2003 2:34:01 PM
From: Rick McDougall	Read Replies (1) \| Respond to of 89467

<I see one thing wrong with your assumptions...and perhaps I'm off base here...but what is it that we make here??? >......not sure that I understand your question, however will make an attempt to answer. High $US makes all goods made in the US expensive as compared to the same products made in foreign countries. Thus it reduces the US's ability to be competitive. The only solution is to devalue the $US. Example: Bush is attempting to persuade the Chinese government to re-evaluate their currency higher in an attempt to prevent US companies from exporting manufacturing jobs to China.....microsoft comes to mind......hope this helps.