Manufacturing Impasse in the Developing World?

Factories have changed steadily from the 18th century cotton mills to today's "robot" controlled shop floors. Through all this remarkable progress the basic concepts of manufacturing has still remained the same, i.e., it must effectively combine the machineries, technology and labor for obtaining optimum product value. Much of today's ideas of manufacturing operations can be traced back to the scientific management era in the early 1900's.
Popularized by Fredrik Taylor, this theory held that in production of goods by removing as much freedom as possible from the production work force and investing the control to the management for obtaining the best results. Over time that basic approach fueled the prosperity of the industrialized and developed world for over four decades.

However, as soon as developing countries with their low wages started making significant progress in increasing quality and productivity of their production operations, then the traditional approach of Fredric Taylor was no longer viable.

Today we have only two scenarios to deal with. One suggests that countries having high wage rates will continue to loose their manufacturing base to the more cost efficient offshore producers. In the other scenario, much of developed countries basic manufacturing industries will be regenerated and transformed in order to secure a long term competitive position against low wage developing countries. The high labor cost in the developed nations is a powerful reason to invest in modern production management concepts for utilizing labor as a valuable resource.
However, in the United States the revitalization process of the manufacturing sector will require a structural change in the public and private sector mind-set.

Government:

To accelerate international trade in manufactured goods, governments of developed countries must remain neutral and minimize excessive policies and controls. In lieu of abolishing all controls, the government should at least safeguard its citizens from corporate interest groups so that it becomes very difficult fro interest groups to influence policies which are harmful to its citizens.
Non-labor business cost especially health care costs in the United States must be reined. In the United States average annual health care cost for a family of four is approaching $9000.0 per annum which is three times the cost of a manufacturing worker in China and Indonesia.

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