Greg Lindsay's Blog

December 21, 2009  |  permalink

China Isn’t (Necessarily) Cheap, It’s Better, Too.

My colleague-of-sorts Jeff Chu has an interview with John Edelman, the new CEO of Design Within Reach. This on the heels of Jeff’s thorough examination of the rise and fall of the modernist furniture retailer, which ruined its business model and alienated designers under previous management. The interview is pretty revealing, as far as CEO interviews go, but I found this exchange especially telling:

One of the common knocks, of course, is that much of what DWR stocks is not within financial reach. That isn’t exactly in keeping with some of the history of modern design, which was meant to be somewhat more accessible to the masses.

I agree. I think if Charles and Ray Eames were producing today, they’d be in China. One of the unfair knocks in this business is against China. If you were to do a knockoff in China, that’s bad taste, bad business, and bad form, but why not do a new design there? What’s the problem? If you’re saying it can’t be done, what a disrespectful comment to the whole nation of China.

Ninety percent of women’s footwear—even the upper part of the market—is made in China, and people are perfectly happy with it. The shoe business did not leave America for price. It left for ease of manufacturing and because American factories just couldn’t adapt. If we work with a top designer, we can do it. It depends on the type of piece. They may not have the quality control in general, but you have to plant one of your employees in China to make sure you get that quality control. You have to get a perfect prototype and you have to babysit and you have to live with production. But you’d have to do that in Italy, America, or China. Just because it was made in Italy doesn’t make is better. In real sourcing, you go to the best place—you should expect new DWR designs that are made in Italy, in America, in China. And it has to be heirloom quality.

Edelman is willing to admit what many CEOs and most Americans are not—Chinese manufacturers are not just cheaper than their American manufacturers, they’re better at it, too. Why? Agglomeration economies for one thing, and Jane Jacobs’ “creative inefficiencies” for another. In a nutshell: if you concentrate enough skilled people in one place, their skills and their work will continue to evolve separately from the tasks required of them. You can’t “bring American jobs back from China” for this reason, because they’re no longer American jobs. In many ways, American factory workers’ Chinese counterparts are the more skilled of the two. Harvard professors Gary Pisano and Willy Shih worried about the long-term consequences of this in a Harvard Business Review article this spring entitle “Restoring American Competitiveness.” By ceding what they called “the industrial commons” to China, they wrote, America had lost the know-how for innovation.

As Edelman notes, you go to the best place when sourcing, and “best” can mean any number of things—a time, cost, skills equation with a number of variables. But it’s clear China is no longer just about cost.

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Greg Lindsay is a generalist, urbanist, futurist, and speaker. He is a 2022-2023 urban tech fellow at Cornell Tech’s Jacobs Institute, where he leads The Metaverse Metropolis — a new initiative exploring the implications of augmented reality at urban scale. He is also the chief communications officer at Climate Alpha, an AI-driven location-analysis platform steering investment toward climate adaptation and more resilient regions; a senior fellow of MIT’s Future Urban Collectives Lab, and a non-resident senior fellow of the Atlantic Council’s Scowcroft Strategy Initiative.

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