Multinational manufacturers are leaving China and flocking to Cambodia, the New York Times reported this week. Ben Wang, executive director of the Georgia Tech Manufacturing Institute, comments on how rising wages and the waning number of young factory workers in China are causing manufacturers to look elsewhere.
This phenomenon will continue to repeat itself in labor-intensive, low-innovation content manufacturing. Since labor cost is the main differentiator for low-cost, labor-intensive manufacturers, they will continue to look for the next community that supplies cheap labor. China today, Cambodia tomorrow. It underscores the importance of innovation driven manufacturing to the U.S. We need to continue to innovate, manufacture high value added products and sell them all over the world.
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