India is trying to be Industrial giant with an illiterate, unhealthy labour force !

[LeveragedBuyout]

@Shotgunner51

A timely case in point:

Africa Should Lure Bangladesh's Garment Industry - Bloomberg View

Historically, the path to wealth for nations has run through manufacturing. Manufacturing gives you a way to quickly move a lot of people from low-productivity farming to higher-productivity jobs without requiring that they pick up lots of new skills first. And the garment industry fits the bill admirably; it does not not require lots of expensive infrastructure or a skilled population that can supply and maintain fancy machines, and it does use lots of low-skilled labor. Once you get people through the factory gates, their higher productivity and earnings will support improvements in infrastructure, education and services, that can fuel further growth. Eventually, one hopes that your country will get too rich to support much garment manufacturing, because workers will be able to command wages too high for low-margin, hypercompetitive garment factories. Then the workers move into higher-wage jobs, the factories move to a lower-wage locale, and everyone enjoys a higher income through the magic of Ricardo's theory of comparative advantage.

 

[Audio]

@Shotgunner51

A timely case in point:

Africa Should Lure Bangladesh's Garment Industry - Bloomberg View

Historically, the path to wealth for nations has run through manufacturing. Manufacturing gives you a way to quickly move a lot of people from low-productivity farming to higher-productivity jobs without requiring that they pick up lots of new skills first. And the garment industry fits the bill admirably; it does not not require lots of expensive infrastructure or a skilled population that can supply and maintain fancy machines, and it does use lots of low-skilled labor. Once you get people through the factory gates, their higher productivity and earnings will support improvements in infrastructure, education and services, that can fuel further growth. Eventually, one hopes that your country will get too rich to support much garment manufacturing, because workers will be able to command wages too high for low-margin, hypercompetitive garment factories. Then the workers move into higher-wage jobs, the factories move to a lower-wage locale, and everyone enjoys a higher income through the magic of Ricardo's theory of comparative advantage.

Some American invented a sowing robot. The implications are that the newest trends of cloth making (wearable electronics) won't be produced in Asia anymore. Or Africa. Can't say i disagree. Time for reshoring!!!

http://www.economist.com/news/techn...-throw-garment-workers-low-cost-countries-out

 

[LeveragedBuyout]

Some American invented a sowing robot. The implications are that the newest trends of cloth making (wearable electronics) won't be produced in Asia anymore. Or Africa. Can't say i disagree. Time for reshoring!!!

http://www.economist.com/news/techn...-throw-garment-workers-low-cost-countries-out

Automation and 3-D printing are changing the face of manufacturing, to be sure, and now the US, with its stagnant wages and abundant energy resources, is newly competitive. That said, the principles behind the special economic zones can apply to other industries as well (services, IT, etc.), so I still believe it is worth pursuing.

 

[Audio]

Automation and 3-D printing are changing the face of manufacturing, to be sure, and now the US, with its stagnant wages and abundant energy resources, is newly competitive. That said, the principles behind the special economic zones can apply to other industries as well (services, IT, etc.), so I still believe it is worth pursuing.

AI coming to take the call centers away.....

 

[Shotgunner51]

I suspect your comment is sarcastic, but I'll reply as if it were not.

Yes, and tend to be diplomatic, commenting seriously on thread like this isn't easy!

All developed countries have more developed and less developed regions, from the American coasts, to the European blue banana, to China's coastal areas. Indeed, China's model of development is quite normal and repeatable (as it was done before China and will continue to be pursued by others after China's development).

India's main problem is that it is not a unified economic bloc (at least, not until GST reform happens), so setting up special economic zones and favoring states that are willing to play ball actually seems especially appropriate for India. Jumping directly into competition with the developed countries will not work, because the knowledge base is too undeveloped, the talent pool is too small, and the culture and processes necessary to emphasize high quality products are not in place.

You are right, China's model, if there is any so to speak, isn't uniquely different, just follow the usual pattern as long as the fundamentals are right. The fundamentals here mostly revolve around cultural emphasis like you have mentioned social harmony, deference to authority, and there are others. Let's not derail this thread and maybe we can discuss somewhere else!

Back on topic, hope India do well!

@Shotgunner51

A timely case in point:

Africa Should Lure Bangladesh's Garment Industry - Bloomberg View

Historically, the path to wealth for nations has run through manufacturing. Manufacturing gives you a way to quickly move a lot of people from low-productivity farming to higher-productivity jobs without requiring that they pick up lots of new skills first. And the garment industry fits the bill admirably; it does not not require lots of expensive infrastructure or a skilled population that can supply and maintain fancy machines, and it does use lots of low-skilled labor. Once you get people through the factory gates, their higher productivity and earnings will support improvements in infrastructure, education and services, that can fuel further growth. Eventually, one hopes that your country will get too rich to support much garment manufacturing, because workers will be able to command wages too high for low-margin, hypercompetitive garment factories. Then the workers move into higher-wage jobs, the factories move to a lower-wage locale, and everyone enjoys a higher income through the magic of Ricardo's theory of comparative advantage.

Well said, by welcoming investments (check Daewoo's "quota hopping" of RMG) Bangladesh is a successful example in establishing a garment industry, it absorbs large amount of labor force, requires little infrastructure, a good starting point for the country. Focus is also important, high concentration of a specific industry is easier to build up supply chain and human expertise.

Automation and 3-D printing are changing the face of manufacturing, to be sure, and now the US, with its stagnant wages and abundant energy resources, is newly competitive. That said, the principles behind the special economic zones can apply to other industries as well (services, IT, etc.), so I still believe it is worth pursuing.

Automation is the name of the game since steam engine and weaving machine replaced human labour, it will just go on. Business corporations, usually from areas with more solid foundation of industrialization, would create business in the upstream e.g. robotics, automation, to make downstream industries (and services) more efficient.

With more and more sophisticated supply chain, integration/trade is important to healthy development.

 

[LeveragedBuyout]

Automation is the name of the game since steam engine and weaving machine replaced human labour, it will just go on. Corporations, usually from areas where industrial foundation is stronger, would create business in the upstream e.g. robotics, automation, to make downstream industries (and services) more efficient.

You're absolutely correct. Fully automating production sounds alluring, until one examines the capex requirements vs. the margins available. That's why the garment industry still requires labor, even though it should hypothetically be one of the easiest areas to automate.

In addition, automation still only addresses a particular form of manufacturing (rote tasks, repeated with precision), and thus leaves opportunities available on the higher end (too complex or requires too much creativity) and on the lower end (capex requirements too large for a meaningful return).

If India wants it, manufacturing is there as a solution. I'm not certain India wants it. "Make In India" really means "make in India, by Indians, in companies owned by Indians." China realized that those sorts of conditions don't make for an attractive FDI environment. India appears to not realize this yet, or more likely (given the NAM history), doesn't care.

 

[21 Dec 2012]

If India wants it, manufacturing is there as a solution. I'm not certain India wants it. "Make In India" really means "make in India, by Indians, in companies owned by Indians." China realized that those sorts of conditions don't make for an attractive FDI environment. India appears to not realize this yet, or more likely (given the NAM history), doesn't care.

I'm afraid you have got 'Make in India' completely wrong. 'Make in India' is literally an ad campaign asking Foreign Investors to 'make' in India.
FDI soars 48% after 'Make in India' campaign, says govt official | Latest News & Updates at Daily News & Analysis
First item in Google search
Proud to 'Make in India': BMW announces brand new prices - Yahoo News India

 

[LeveragedBuyout]

I'm afraid you have got 'Make in India' completely wrong. 'Make in India' is literally an ad campaign asking Foreign Investors to 'make' in India.
FDI soars 48% after 'Make in India' campaign, says govt official | Latest News & Updates at Daily News & Analysis
First item in Google search
Proud to 'Make in India': BMW announces brand new prices - Yahoo News India

I'm referring more to limits on foreign ownership in what the rest of the world would consider to be non-strategic sectors, like multi-brand retail operations.

 

[21 Dec 2012]

I'm referring more to limits on foreign ownership in what the rest of the world would consider to be non-strategic sectors, like multi-brand retail operations.

Well, you used the phrase Make in India and the quotes so I naturally jumped there.
Yes, Multi-brand retail seems to have unfortunately become a politicized matter. The previous UPA regime wanted it passed but was obstructed by petty politics. The current government was the principal opposition to it, when it was in opposition although presently opposes it on paper but secretly wants it too (it initiated it). Apart from that these are the only sectors prohibited for FDI's.

SECTORS WHERE FOREIGN DIRECT INVESTMENT IS PROHIBITED :

• Lottery Business including Government /private lottery, online lotteries, etc.
• Gambling and Betting including casinos etc.
• Chit funds
• Nidhi company-(borrowing from members and lending to members only).
• Trading in Transferable Development Rights (TDRs)
• Real Estate Business (other than construction development) or Construction of Farm Houses
• Manufacturing of Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes
• Activities / sectors not open to private sector investment e.g. Atomic Energy and Railway Transport (other than construction, operation and maintenance of (i) Suburban corridor projects through PPP, (ii) High speed train projects, (iii) Dedicated freight lines, (iv) Rolling stock including train sets, and locomotives/coaches manufacturing and maintenance facilities, (v) Railway Electrification, (vi) Signaling systems, (vii) Freight terminals, (viii) Passenger terminals, (ix) Infrastructure in industrial park pertaining to railway line/sidings including electrified railway lines and connectivities to main railway line and (x) Mass Rapid Transport Systems.)
• Services like legal, book keeping, accounting & auditing.

FOREIGN DIRECT INVESTMENT | MAKE IN INDIA
Saying that '"Make In India" really means "make in India, by Indians, in companies owned by Indians."' would be a gross and highly erroneous generalization.

 

[Donatello]

Becoming a nobel laureate doesn't grant you magical powers. You still have to undergo scrutiny, and quite a few fail at that. Paul Krugman is an immediate example that comes to mind.

Yes, becoming a Prime Minister give you magical powers like fudging up Economic numbers, because you believe in vedic economics and science.

 

[21 Dec 2012]

Yes, becoming a Prime Minister give you magical powers like fudging up Economic numbers, because you believe in vedic economics and science.

What?

 

[nForce]

I have attended a few of Amartya Sen's lectures. I like what he says. A bit socialistic may be..

But I like his daughter more than his lectures

 

[Echo_419]

I suspect your comment is sarcastic, but I'll reply as if it were not. All developed countries have more developed and less developed regions, from the American coasts, to the European blue banana, to China's coastal areas. Indeed, China's model of development is quite normal and repeatable (as it was done before China and will continue to be pursued by others after China's development).

India's main problem is that it is not a unified economic bloc (at least, not until GST reform happens), so setting up special economic zones and favoring states that are willing to play ball actually seems especially appropriate for India. Jumping directly into competition with the developed countries will not work, because the knowledge base is too undeveloped, the talent pool is too small, and the culture and processes necessary to emphasize high quality products are not in place.

I agree with you fully our country is not fully unified(economically) so state led development is the way to go & when less developed states notice the successful policies of developed states it will have a domino effect.also this problem will be solved by 2016 by implementing many tax reforms

 

[Ragnar]

The old debate, the cart before the horse and all that:

Everything you wanted to know about the Sen-Bhagwati debate - Livemint

 

[Echo_419]

You're absolutely correct. Fully automating production sounds alluring, until one examines the capex requirements vs. the margins available. That's why the garment industry still requires labor, even though it should hypothetically be one of the easiest areas to automate.

In addition, automation still only addresses a particular form of manufacturing (rote tasks, repeated with precision), and thus leaves opportunities available on the higher end (too complex or requires too much creativity) and on the lower end (capex requirements too large for a meaningful return).

If India wants it, manufacturing is there as a solution. I'm not certain India wants it. "Make In India" really means "make in India, by Indians, in companies owned by Indians." China realized that those sorts of conditions don't make for an attractive FDI environment. India appears to not realize this yet, or more likely (given the NAM history), doesn't care.

I am afraid you are wrong Make in India means any company can come & make their stuff in India & the recent integrators seems to show that this stratergy is working