Manufacturing is China's forte, and the IT world is India's. Transporting India's products is a matter of sending electrons over the telecommunication infrastructure. China's products (and raw materials too) need to be physically transported. Up until the recent astronomical increase in oil prices, transport costs were practically negligible.
Not anymore. A story in the NY Times says:
Many economists argue that globalization will not shift into reverse even if oil prices continue their rising trend. But many see evidence that companies looking to keep prices low will have to move some production closer to consumers. Globe-spanning supply chains — Brazilian iron ore turned into Chinese steel used to make washing machines shipped to Long Beach, Calif., and then trucked to appliance stores in Chicago — make less sense today than they did a few years ago.
Meanwhile the cost to transport electronic data? The marginal cost is almost zero!
No comments:
Post a Comment