The “Made In China” phenomenon and its impact on both developed and developing countries is a long and complicated issue which requires more than 1000 words to adequately analyze. The point here is to make the discussion relevant to the reader. The story of China continues to unfold but it is one with powerful lessons for nearly every country in the World.
Sometime last year, I had the pleasure of attending a small business conference sponsored by the local Guyana EMPRETEC agency. An accomplished Guyanese business woman representing the local arts and crafts industry; stated while giving her presentation that “3 words had recently impacted the fortunes of the local arts and crafts industry in Guyana and across the Caribbean”. She asked the audience what those three words were. Those three words came to me immediately. They were “Made In China”.
Our family rental business in Georgia needed to purchase some tablecloths back in 2004. My sister identified the US vendor with the most competitive price and we wound up purchasing 100 tablecloths for around 3,000 USD. These tablecloths each rented for $15 and while allowing for the laundry cost of $5 each, our net on each rental was around $10/tablecloth. With an average rental of twice monthly, paying $30 each was a no-brainer, since the tablecloths paid for themselves in a little less than 2 months…was a no-brainer in fact until I received a quote for $7 per tablecloth from China (including shipping, duties and taxes). Although our US vendor was professional and very nice, as small business people we were forced to switch vendors.
Just last week I once again encountered a classical “made in china” moment. Last year I was introduced to a very talented young man in Guyana. He was 23 years old, well spoken and obviously very intelligent. He possessed exceptional website development skills, had done extensive work for small businesses in Guyana and the quality of his work was not in question. Considering his talent, I pitched in to secure some website development contracts for him in the United States. I asked him to send me work samples and pricing which he promptly did stating rates of $16 – $20 USD per hour. The response from one of my US clients was quick and immediate. “are you kiddin me”, he said. “I can get an English speaking IT college graduate outsourced from China for $400 per month”. So while, my client wanted to deal with an English speaking contractor, preferably in the same time zone and a few short hours away from the US, he was unwilling to pay such a comparatively high premium.
These examples can go on and on and in fact many residents of small towns in the United States can attest to factory closings, unemployment and micro recessions long before the issues bubbled up to a national crises in the United States, all because of the manufacturing labour arbitrage opportunity existing in China and India. Several discussions can immediately be launched from my earlier examples but regardless of which way you spin it, nations like China, India, Thailand, and several Eastern European countries will continue to shape the landscape of the global economy because of their large educated populations, wide dispersion of technology, commitment to free market economy and the work ethic of their people.
Developing countries which are unprepared or unwilling to adequately prepare for the future will find themselves “out in the cold”, uncompetitive and left with little choice but to continue to give in to the exploitation of their natural resources by the new breed of hungry developed giants like China and India.
Guyana is still in a position to compete however. Guyana has tremendous agricultural potential, the call centre industry is still in its infancy, value added processing of raw materials can explode with some creativity and investment in Guyana, aquaculture opportunities wait to be exploited, the opportunities are endless. Guyana also has a reputation for having a highly educated workforce and the benefit of being located in the same time zone for 1/2 of the year with the Eastern United States. Guyana is a hop and skip away from the sunny Caribbean and keep in mind that executives in North America do not look forward to that 15 – 22 hour commute to China, Korea or India. Finally of course those who take the early risk of investing in Guyana will reap the greatest financial rewards.
There is still much to be done by the Guyana public and private sectors however. These participants will have to do more to drive technological and process improvements throughout their organizations in order to compete on a global level. Mature companies like Banks DIH and Beharry & Sons and a few new factories are already making such investments. Craft vendors will need to access capital in order to improve technology which will allow them to speed up production while lowering production cost of their very beautiful and creative artwork. The call centre industries need access to a more robust and redundant telecommunications network. Manufacturers need access to technology and lower electricity costs or they will never be able to compete with the likes of China. Agencies like GO-INVEST are making strides in pushing for investors who will add value to our locally available raw materials thus providing more jobs for our people, but Guyana needs a country wide PR campaign, a cohesive commitment and determination to compete or die. The cream must be allowed to rise to the top, we must encourage creativity and brilliance regardless of the colour in which it is packaged. The best brains of China, India, and many other developed countries are now working to craft their 50 and 100 year plans for success. Are we similarly engaged?
