Blog: Dave LeggettThe economics of manufacturing

Dave Leggett | 29 October 2003

I've had an interesting response to an earlier blog entry about GM in Europe and the question of migrating production to lowest cost areas of production. On a global basis, the shift to lower cost production areas raises some pretty big questions of course. One of the central principles under which manufacturing developed in the last century was that a market had to be generated for the goods being made. The workers on the new high volume manufacturing lines had the purchasing power to afford many of the new goods that became available (at lower unit cost and high volume). Demand and supply worked together - mass sales with low price. Hey presto - the consumer society was born. What about the new manufacturing models involving widespread outsourcing to low-cost countries? Where will that leave both the developed and developing countries? What exactly is fair trade? There are some interesting posts touching on these issues in the second page of this discussion forum thread.


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