there has been a slew of appreciation of what china has done in the world of manufacturing . this article in NYT explains the value addition by Chinese manufacturing which is very low compared to designers, retailers, marketing and patents.
http://www.nytimes.com/2010/07/06/technology/06iphone.html?pagewanted=1&_r=1&hp
there is a limit to growth that can be achieved using contract manufacturing . they need to move to higher end of product cycle a travail which Indian IT giants are going through. The difference is that contract manufacturing has been broad based while contract servicing has been narrow due to technological constraints. Hence china has been able to grow at a higher rate compared to India.
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