How Asia Has Become The Consumer Electronics Manufacturer For The World

I posted an article a few months ago by Andy Grove, the founder of Intel, who wrote about the problems that high tech company's had scaling up employment in the US. This article tells the story in detail. It explains why Asia has become the consumer electronics capital of the world. Asia provides a large and flexible supply chain that cannot be easily duplicated in the US. It is also a very large market for consumer electronic products like the iPhone and iPad. It takes a relatively small number of US employees to do the jobs that remain in the US. The labor intensive work is done in Asia. According to this article, low wages in Asia are not the only reason why the jobs are in Asia. Foxconn, which does the assembly for Apple, and many other US high tech firms, has over one million employees.

Apples stock price has increased by a factor of ten since it struck gold with mobile products. The executives in the US, as well as investors in Apple stock, have prospered from Apple's success. Its profit per employee is over $400,000. Other companies, that hope to compete with Apple for shareholders, are driven to reach Apple's profit per employee.

There are no easy solutions that will enable the US to bring the lost jobs in consumer electronics to the US. The article suggests that the scarcity of skilled technicians in the US is part of the problem. The level of training that would be required to increase the supply in the US is at the community college level. However, there is no reason to believe that increasing the supply of skilled technicians would solve the problem. The organization of work, and access to a complex supply chain, would not be easy to duplicate. Given the enormous market for consumer electronic products in Asia, it also makes sense to locate manufacturing close to the market.