Made in India
The world is shrinking. The term “trade area” used to mean a
few-mile radius. With internet auctions and international
manufacturing, most of us buy more than we realize from around the
globe. Our “trade area” is suddenly the entire planet.
I bought some microwave popcorn a few years ago. “Nebraska
Popcorn” was proudly displayed on the package. But the fine print
stated that it was packaged in China. So the popcorn that was
harvested just a few miles from here was hauled across the U.S.,
shipped across the Pacific Ocean, and trucked into China—only to
be put into a cellophane package and shipped back the 12,000 miles
to Nebraska for sale. The world is definitely shrinking.
India has taken advantage of the shrinking globe. What shocked
me the most about India was the affordability of labor. At the
brick factory, workers had to produce 1,000 bricks by hand before
they were compensated less than $5 for the lot. Weavers of
hand-made Kashmiri scarves and rugs were paid 50 cents to make
articles that would sell for 100 times as much. Our driver worked
long hours in stressful traffic, and saw his family once a month,
to make $40 per month with no benefits. Typical salary for the
working class is less than $2 per day, again with no benefits.
It’s easy to see why so much manufacturing is being outsourced
overseas. And it’s not just the working class. I went to the
clinic of a physician in India who lived in a beautiful mansion
with several servants. His rates were posted on the wall of the
waiting room—the equivalent of $1.13 for an office visit, and
$2.27 for an after-hours emergency.
The internet gives a new dimension to international trade.
Consider this; many of the tax forms filled out this spring will
be prepared online by employees in India before being certified by
a CPA here in the U.S. Someone recently told me that they went to
a hospital in Nebraska and had an MRI, which was immediately
analyzed by a physician in another country halfway around the
world. Suddenly “international trade” is not just about shipping
manufactured items around the world. It’s now about sending
information around the world. And unlike manufactured goods,
information is immune to shipping costs and import taxes. If the
trends continue, engineers in India will be hired to design a
building in Nebraska and will submit their final blueprints
electronically. Banking, accounting, engineering and medicine
could become as commonly outsourced as manufacturing is to China
and India today.
So how does the U.S. compete in this market?
Designed in the USA
We must keep reinventing the world. Most of our children own an
iPod, all of which are made overseas. But the iPod is designed and
sold by Apple, an American company. Even if the majority of what
we buy is manufactured overseas, it is almost all designed and
owned by American inventors. The purse strings are still held in
the U.S.
The political system in much of the rest of the world is very
authoritarian, and challenging the government is less common than
we experience here in the U.S. The education systems that I’ve
seen also seem authoritarian. Memorizing names and dates and
learning what you are told is important. But many education
systems around the world seem to lack innovative thinking,
critical thinking, problem solving, and the willingness to
challenge accepted norms that we take for granted in the U.S.
In other words, an employee in India working for H&R Block may
fill out my tax forms. But it will be an American that sits down
with me to creatively plan my investments. Engineering
calculations may eventually be outsourced overseas. But the
creative aspect of engineering design and problem solving will
still be done by local engineers working with clients. Even if
spotlights for checking calves that mount on your truck and swivel
360 degrees are manufactured overseas, but they will be designed,
owned, and sold by a creative thinker in Nebraska.
America has to capitalize on its strengths—quality labor, pride
in workmanship, and creative problem solving. We also have to
recognize the potential in the rest of the world.
We can stay ahead in this shrinking world. We do that by
constantly reinventing the world. And that ability depends on the
education of our children. It is our children’s ability to think
creatively and problem-solve today that will determine the success
of the United States as an economic force in the world tomorrow.
Jeff Tidyman
Labor in India:
