Wednesday, March 18, 2009

Innovative production beats marketing.

More on the small-business vs. big-business front:

For decades US corporations have been abandoning the production business in favor of the supposedly more profitable business of branding and marketing. But this strategy is coming back to bite US laptop makers. Wired reports that Taiwan companies responsible for designing and building laptops for Apple, HP and Dell have taken the industry by storm with their innovative netbooks - low-power, low-cost laptops perfect for computing on the go. Or, as Wired's Clive Thompson puts it (bold mine):

In the US, we regard branding and marketing - convincing people what to buy - as core business functions. What Asustek proved is that the companies with real leverage are the ones that actually make desirable products. The Taiwanese laptop builders possess the atom-hacking smarts that once defined America but which have atrophied here along with our industrial base. As far as laptop manufacturing goes, Taiwan essentially now owns the market; the devices aren't produced in significant volumes anywhere else... "When I talk to [the Taiwanese] now," [researcher] Shih laughs, "they say, 'We outsource our branding and sales to them."

But American manufacturing is far from dead. Once again, the innovation and flexibility of small business is filling the gaps left by corporations. Clive Thompson tells us in the same March issue how small-scale DIY manufacturing is making products never seen before - and growing by leaps and bounds.

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