Monday, December 10, 2012

Bonddad Blog: Ahead of the Curve

Over the last few day, the discussion of robots and technology has been taken up by professor Krugman and FT Alphaville (see here and here).

This is something we talked about a year and a half ago on July 11, 2011:

For the last 10 years, we've seen large drops in US manufacturing employment. Part of the reason is the increased use of automation -- which is a natural by-product of technological development. As for offshoring, most offshoring is not bad. Remember that other markets have been developing for the last 20+ years and are now to the point (and have been for at least 10 years) where locating facilities in those countries makes practical sense. For example -- Brazil, India, China and Russia are all emerging economies with growing manufacturing and consumer markets. Locating manufacturing facilities in these countries (at the expense of US production) cuts down on transportation costs and creates new profit centers and local goodwill for parent companies. In short, loss of US manufacturing jobs represents as much an overall realignment of global manufacturing, consumption and economic patterns as it does an "evil plot by those nasty capitalists." Most importantly, this also means the manufacturing jobs lost will not be coming back.