Apple switching some of its products to being manufactured in the USA is not just a publicity stunt. While, in the short term, the effects of globalization have allowed for greater profits by outsourcing over time the economic playing field will begin to flatten, the lower cost of localization plays a factor in Apple’s decision to move some manufacturing back to America, but, in the long term, robots will play a bigger role.
As previously reported by The Inquisitr, Apple and “Made In USA” made the headlines for a while. Competitors like HP were quick to point out their servers and desktops were already been made in the USA. While the popular iPhone and iPad will still be manufactured in China for the moment, in the long term, this business strategy could change.
“A big-value product, like an iPhone or an iPad, would be a bigger deal,” said Rob Enderle, an analyst in San Jose, California, who has been following the industry for a quarter-century. “[Apple CEO] Cook is looking to give Apple some good news. He doesn’t want people thinking about Apple as a declining company that Steve Jobs used to run.”
During the 2012 Election, Jeep received much flack for speculating about shifting its manufacturing to China. This was primarily due to the rapidly growing Chinese economy and the fact that the new Jeep models would be manufactured in China and sold to the Chinese. This is called localization, and it’s plain smart business, although it also means that potential US jobs will go overseas instead of manufacturing the cars here and shipping them to Chinese markets.
Speaking of which, according to the New York Times, shipping costs will continue to increase and the wages of overseas workers will likewise increase. This trend will be accelerated by the devaluing of the US dollar. The shift back to US manufacturing may be on the horizon for many companies when they realize they can save money.
Unfortunately, this shift may not be accompanied by a large number of US jobs. As cheap as a Chinese assembly worker may be, specialized manufacturing robots promise to be even cheaper. The most valuable part of a computer, smartphone, or tablet is the motherboard loaded with microprocessors and memory, and these parts are already largely made with robots.
Foxconn is already talking about replacing Chinese workers with robots, which have a one-time cost of $25,000 combined with maintenance. People do things like fitting in batteries and snapping on screens. As more robots are built, largely by other robots, “assembly can be done here as well as anywhere else,” Mr. Enderle said. “That will replace most of the workers, though you will need a few people to manage the robots.”
The movie iRobot featured an economy rocked by the effects of robotization. Though only a fictional movie, the next industrial revolution will likely feature very high company efficiency along with low employment. Fortunately, this only applies to jobs involving automation. Most jobs will still require a human touch, but it’s possible this could change over time as AI research progresses.
“The next frontier for automation is non-routine work,” explains Matt Beane, a researcher at MIT’s Sloan School of Management. “Some of the biggest changes in work could be at the high end. These jobs can be automated without a physical avatar.” So while taxi drivers and farm workers can be replaced by robots operated by Artificial Intelligence (AI) or a human operator, it’s still expensive to manufacture that hardware. “Most automation will be intangible. It’s progressing very rapidly and is much less expensive than physical production. Once you have got good AI, it’s replicable at almost zero cost.”
So it is possible that in the future we may want to call on Will Smith to get our jobs back. What do you think about this potential future for the American economy? How should businesses and politicians respond to the hardships the shift will cause?