We all remember what happened nearly 40 years ago, when the combination of a sudden scarcity of gasoline combined with newer, more gas efficient vehicles to stun domestic automobile producers. Seemingly out of nowhere the vehicles produced in Japan, known for making cheap toys, were outselling domestic brands handily. Now we are witnessing the China ATV invasion with great trepidation.
This should have been anticipated, as the consumer market here is predictable in its open acceptance of foreign cars that meet our quality standards while presenting at lower costs. This is a process that is a bonanza for the developing country, but it is not necessarily bad for us either. While the initial impact may be frightening to the domestic competition, for the public, like all competition the end result is greater choice and better quality products.
When Japan came out of World War II, it was a shambles of destroyed manufacturing facilities. Korea experienced a similar, though not as complete destruction during the Korean War. As they began to recover in the aftermath of the war, their manufacturing base began to recover as well.
In Germany and Japan, they had a counter intuitive advantage. The entirety of their manufacturing capabilities was destroyed, which was, of course, devastating to the economy in the short run. Over the long run, however, it allowed them to build from scratch, a sort of operational reboot. This allowed them to incorporate the latest, most efficient and productive equipment and processes in their manufacturing plants from the ground up.
Whenever a product is developed, especially the first of its kind, the originating company shoulders the greatest cost, having footed the entire bill for research and development. Once released and accepted by consumers, it is easier for competitors to use these products to produce similar or even better models in competition. This is not limited to foreign competition, the fast food hamburger environment has essentially one company do all the work to find the best place to build new stores, the competition just builds nearby.
When formerly third world nations begin to emerge into the industrial world, they do not have the same steep learning curve their more advanced brothers had. They do not have to make the same mistakes, nor do they have to take the same linear pathway, they have the advantage of learning from the experience of other nations. In addition to their own abilities to learn from history, advanced nations even send advisers to assist in the develop of these countries.
This process of helping emerging nations to develop the factories and processes to make the things that we like is good for businesses here as well as there. For our economy, products are less expensive and more readily available, while it provides employment and economic activity in the developing nation. This economic stimulation creates a more wealthy population in the developing country, a population that represents an open market.
Anything that appears to compete to successfully with domestically produced items is met with fear and suspicion. When the Japanese vehicles began to be seen increasingly on our streets, panic began to set in and dire warnings of doom were intoned. Such drama was never realized, and the China ATV volumes will not drive domestic products out of business either.
This should have been anticipated, as the consumer market here is predictable in its open acceptance of foreign cars that meet our quality standards while presenting at lower costs. This is a process that is a bonanza for the developing country, but it is not necessarily bad for us either. While the initial impact may be frightening to the domestic competition, for the public, like all competition the end result is greater choice and better quality products.
When Japan came out of World War II, it was a shambles of destroyed manufacturing facilities. Korea experienced a similar, though not as complete destruction during the Korean War. As they began to recover in the aftermath of the war, their manufacturing base began to recover as well.
In Germany and Japan, they had a counter intuitive advantage. The entirety of their manufacturing capabilities was destroyed, which was, of course, devastating to the economy in the short run. Over the long run, however, it allowed them to build from scratch, a sort of operational reboot. This allowed them to incorporate the latest, most efficient and productive equipment and processes in their manufacturing plants from the ground up.
Whenever a product is developed, especially the first of its kind, the originating company shoulders the greatest cost, having footed the entire bill for research and development. Once released and accepted by consumers, it is easier for competitors to use these products to produce similar or even better models in competition. This is not limited to foreign competition, the fast food hamburger environment has essentially one company do all the work to find the best place to build new stores, the competition just builds nearby.
When formerly third world nations begin to emerge into the industrial world, they do not have the same steep learning curve their more advanced brothers had. They do not have to make the same mistakes, nor do they have to take the same linear pathway, they have the advantage of learning from the experience of other nations. In addition to their own abilities to learn from history, advanced nations even send advisers to assist in the develop of these countries.
This process of helping emerging nations to develop the factories and processes to make the things that we like is good for businesses here as well as there. For our economy, products are less expensive and more readily available, while it provides employment and economic activity in the developing nation. This economic stimulation creates a more wealthy population in the developing country, a population that represents an open market.
Anything that appears to compete to successfully with domestically produced items is met with fear and suspicion. When the Japanese vehicles began to be seen increasingly on our streets, panic began to set in and dire warnings of doom were intoned. Such drama was never realized, and the China ATV volumes will not drive domestic products out of business either.
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