Geo Political Comment

So, where does the story end?

The majority of the world's robot population can be found in the industrialised world. Of the 950,000 Robots Worldwide in 2005, less than 2% were to be found in China, India, Middle East, South America, Malaya, Indonesia, South Africa, Australia and New Zealand. This gives an indication of the resistance to automation where the labour costs and employee benefits are low. Where this principle does not apply, there is less incentive to automate heavily. In countries like Australia, where wages are higher, the drive to export is not present.

Many of the fringe countries are quite industrialised but unstable. I cannot see investment taking place without security and assurance. The volatility of many countries in that 2% will rule out inward investment.

As the low wage economies are favoured with Black Box technology, the countries prosper, wages increase as do the standard of living and the expectations of their citizens. China is a case in point with staggering growth year on year and incredible development. Affluence is there for all to see on the streets. How long will it be before the next move for the manufacturers? Or is it perhaps the obvious place to base all manufacturing. With access to a 600,000,000 customer base, and the economies of scale which that brings to the manufacturing operation, Why not export to the rest of the world from a Chinese base.

Control is a key factor in all these discussions. When you export your technology and jobs, licence the manufacturing process, train the personnel and build the infrastructure of the new company with the latest technology on greenfield site, you also relinquish your ultimate control over the process.

A simple political decision or change of government could turn the partners of today into the competitors of tomorrow. Having relinquished the technology and the expertise, de-skilling the domestic workforce in the process, the only weapon you have left is research and development. When they know what you know, you have to learn some new stuff to stay ahead and remain an attractive partner.

We all know how good the Japanese are at exploiting other countries R&D efforts without the the burden of funding development.

Is there a case for us to benefit from our own creativity and and innovation at a national level? The financiers would need to review their investment strategies by taking the long view on the future health and welfare of the population.

If we can put together a manufacturing plant capable of 'lights out' 24/7 profitable operation, which we can, what benefit the low wage outsource solution half way across the world.

When wages and benefits are taken out of the equation, you are left with real estate and energy costs. Is that where it ends? Countries with energy resources do all the manufacturing? Look at Russia and gas prices at the moment. The increase in Gas prices has turned profitable UK companies into loss makers.

If we send our manufacturing abroad, what bargaining chips are we left with. Manufacturing generates wealth!