My column this week in Expansión, Spain’s leading financial daily, is called “They’re here” (pdf in Spanish) and uses the news that the Foxconn assembly line has now introduced robots in the run up to manufacturing the iPhone 6 to speculate on the importance of this radical change in the way that China makes things. I chose the title because I couldn’t make up my mind about the robots, the Chinese, or the little girl from Poltergeist, or all three at the same time :-)
China’s shift from being a “manufacturing paradise”, where things are made by hand, to becoming a global robotic assembly power will have more repercussions than might initially appear: we are talking about redefining an entire country’s competitive advantage, the consequences of which will affect every aspect of life there. The idea of a China whose engineers earn more than their counterparts in countries like Spain is not easy to digest, and highlights a problem that needs a diagnosis.
That said, moving to robotic assembly line is not as simple as it sounds. Many processes there have been traditionally carried out by hand not just because it is cheaper, but also because of certain characteristics of the process related to factors like the flexibility of materials, the tight spaces involved, or tolerance management. Foxconn’s experience with its Foxbots on the iPhone production line could easily change the global competitive panorama.
Below, the full text:
Foxconn, China’s largest manufacturer, a giant employing 1.2 million people, has announced that for the production of the next iPhone it will be using some 10,000 Foxbots, robots costing between 20,000 and 25,000 dollars, teach of which is able to build some 30,000 unit a year. The machines are in the final phase of testing.
Foxconn has not said if the robots will be able to carry out the complete construction of the phone, or if they will be used for specific parts of a process that will be completed by hand. Some aspects of the assembly process would be a severe challenge to robots. But mechanization on this scale is a watershed that could have major economic implications down the road.
For several years now, China has been a major industrial power, thanks to its seemingly limitless manpower and low labor costs. In China, whatever can be done by hand is done by hand, with all that means in terms of costs, but also quality, as well as exploitation of workers.
The Asian giant has used this advantage to lead global economic growth; at the same, its labor costs have gradually risen. Spanish companies manufacturing in China say that in some cases, Chinese engineers are being paid as much as their Spanish counterparts.
The implications of China becoming a global robotics power will be far-reaching. We are going to have to come to terms with it: they’re here.
(En español, aquí)