And now, the end is near…
25 July 2011
There is a sense that we are reaching a defining point in the global electronics manufacturing industry – time for a fundamental change?
It is no surprise that I take this as a topic this week as there is about to be a fundamental change at EMTWorldWide. Since launching EMTWorldWide in May 2007, I have had the pleasure of being its Editor, but at the end of this week I am moving on to pastures new, leaving a new man, Alistair Winning, at the helm.
Alistair’s career in electronics, starting with a masters degree in electronics, spans journalism, agency, distribution and – as a personal friend – I can think of no better person to be passing over the reins to. His recent experience with one of the world’s most significant distributors will ensure that he brings his own ideas to the table (or desktop… or laptop – and probably your smartphone too!) It is time for change at EMTWorldWide!
But is it time for change for the electronics manufacturing industry? It is so difficult to tell. Certainly the technology is mature and a mature technology should be a reliable one and therefore mobile in the sense that there is no technological advantage (in the vast majority of cases) to manufacturing in, for example, America rather than China. So, logically, virtually all manufacturing should move to China where real estate and employment costs are comparatively low. A counter argument goes that as fuel costs for shipping increase, and the costs of automated assembly are by definition fairly equal wherever you are on the planet, then it makes sense to manufacture in either your home market or your end market. Such arguments, as people try to untangle what is an up-front price and what is an end cost, have been on-going since the trend to outsourcing and globalisation – a trend that really gained momentum after the dot-com crash.
However, I do think that we are approaching that defining moment. What happens next? By removing so much of the manufacturing to low-cost/developing countries what can happen is that the link in Western countries between design and manufacturing is lost and the knowledge that makes a design manufacturable is diminished. There is a downward spiral, potentially, that could leave the electronics in countries like the USA and the UK concentrating only on high value low volume sectors like defence, aerospace and medical. Conversely it could be argued that China, with an established manufacturing expertise coupled with an ability to churn out more electronics design graduates per annum than most western countries have working in their entire electronics industry, have the potential to spiral upwards with an unstoppable momentum and fuelled by an insatiable domestic market.
However, China is no longer quite as cheap as it once was and Western countries, Germany apart who has always valued its engineering sector, are now realising the importance of having a thriving manufacturing industry. Could the flow change again? Could a new equilibrium be reached? Could new factors (e.g. limited resources, climate change, over-population) come into the equation and fundamentally affect the way the global electronics industry is organised? I have no doubt they will, but to what end I don’t know. And it is with a tinge of jealousy that I hand over to Alistair (alistair.winning@imlgroup.co.uk) to report on the next chapters in this fascinating story.
A quick moment of indulgence if I may to thank everyone across so many different parts of the industry for making the last four years on EMTWorldWide (and for readers in the UK I extend that to my 16 years as Editor of Electronics Manufacture & Test and more recently Electronic Product Design), so enjoyable, intriguing and satisfying. From trade associations, event organisers, PR agencies, suppliers, my fellow press and of course you, the readers, without whom we are nothing. A thank you to the internal team here, most particularly Neil Whitaker, Keith Murray (my long-standing partner in crime!), and Paul Wolfe, who provides so much of the graft that goes into maintaining the quality and content of EMTww, and who will provide the editorial continuity, no doubt popping-up with occasional comment. And also to my global correspondents - Anand Sethi, Gordon Wong and Susan Mucha - from whom I have learned so much, have hugely enjoyed corresponding with, and have so much to thank for giving EMTww its unique role in the electronics world.
I will remain on the same email address (tim.fryer@imlgroup.co.uk) if anyone wants to get in contact, as my move is an internal one.
Thank you all for reading us for the last four years and stick with us as the story unfolds…!
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