Innovation, the US and China

If you haven’t read the excellent How U.S. Lost Out on iPhone Work in the New York Times, you should do so now. The story describes a seismic shift in technology that many haven’t noticed until only recently.

A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day.

“The speed and flexibility is breathtaking,” the executive said. “There’s no American plant that can match that.”

Similar stories could be told about almost any electronics company — and outsourcing has also become common in hundreds of industries, including accounting, legal services, banking, auto manufacturing and pharmaceuticals.

Charles Duhigg and Keith Brasaher- How U.S. Lost Out on iPhone Work

It’s also worth reading Why China Wins after you’ve read the first article for additional context:

Go to the lobby of the Sheraton Four Points in Shenzhen — or a dozen hotels like it. Table-after-table is a white guy from middle America trying to make his company competitive again sitting with a Chinese factory head or “fixer” who can get them into the right factories. It’s not unlike wandering into Cuppa Cafe in Palo Alto and seeing table-after-table of VC sitting with hopeful entrepreneurs.

It shocks me that people always assume the Chinese can only make inferior products when Apple– the gold standard of well-made products– is made in China. Sure, China can make shitty products for cheap. But it can also make the world’s best products. Again, like Silicon Valley can produce a bloated, uninteresting startup like Color and a nimble startup like Instagram that millions love. The startup machinery doesn’t make a company great or bad. It just makes whatever is put into it, more efficiently than any other place. Ditto China and manufacturing.

Sarah Lacy – Why China Wins

If you haven’t tossed all of your old assumptions about quality, innovation, China and the future already, you should do so now. If you want to be prepared for the future, you can’t carry old expectations as baggage.

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