Creating, selling, transporting and buying consumer goods such as casual footwear now requires just one significant human—the consumer—plus an individual here and there to oversee assembly and repair robots. Many of the basics we buy are now constructed, bought, and shipped with no one besides the customer ever laying eyes on them.
Just to complete the story, there is no consumer because nobody has a job, so there's no reason to create consumer goods in the first place.
This all feels like we're sleepwalking into a nightmarish hell far beyond A Brave New World or 1984. Amazon, drones, mass surveillance, erosion of privacy. The day will come when we no longer can opt out.
> The day will come when we no longer can opt out.
That day already came a long time ago. Even those of us who do everything we can to avoid the surveillance end up being sold out (often inadvertently) by those we know when they share information about us or have their contact lists harvested. That's without even getting into the data Google/Facebook/Amazon/etc collect from public records, credit card companies, etc.
Or maybe even comes from ultra-rich people voluntarily deciding to fund one or more states' basic income, purely because they have nothing else to do with their money.
No, it's probably going to take a very fundamental reorganization of the economy. I can't see labour continuing along the path of increasing irrelevancy and the concentration of wealth continuing to increase as it has without something breaking
That, or we have a time-based economy. Physical goods may become accessible to all, but time is still a limited resource, and collaboration with others can save us time, and help to strengthen communities.
Why are the shoes manufactured in China if no humans are necessary to do so? The primary reason to do manufacturing in low-wage countries now seems to be just that: low wages. Take out the need to pay wages and it makes a lot of sense to manufacture locally to save on shipping costs (and maybe even do things like manufacturing to order instead of keeping stock).
I work for a Canadian company that manufactures lighting components near Guangdong. Chrome plating is almost impossible to do in North America at a cost competitive price point. Just an anecdote about the conditions there; The supplier we use chome plates parts using a hexavalent chromium plating technique as opposed to a trivalent technique, irrespective of the environmental hazards that come along with it (As far as I know it's produces carcinogenic by products). I didn't see one worker with a respirator on or disposable gloves during my visits, health and safety seems to be an after thought. One of the holding tanks that for the byproduct plating solution was leaking from a fitting into the soil below, the surrounding areas are mostly farm lands (not sure what is in the solution that was leaking, but I would assume you wouldn't want it taken up by food crop). For us it's definitely an environmental sidestep. Really the only way for the west to become cost competitive for low end industrial manufacturing is going to be through a softening of environmental regulations or China's will have to close the gap with improved regulations.
I speak from experince in chroming. In the USA, hex chrome is insanely expensive, if even still possible under EPA. You may be thinking of tri chrome, which is what you can get here. Everyone outsources now due to this.
Hoenstly, the chemicals are horrendus and chrome's days are numbered in any capacity thanks to new mirror finish water based paint. Even china will soon ban hex chrome process, by proxy if not explicitly.
I'm not a chemist, how will water based paint displace (heh) chrome? I understand the environmental and possibly cost benefits but if it is water based how will it work for exposed surfaces? Will it be used in heavy equipment on hydraulic actuators? I see the benefit of water based paint inside the cylinder where it meets the oil but what about the exposed area?
Shorter supply lines to components and materials probably matters more than shorter supply lines to consumers. Plus, logistically speaking, China has a huge domestic market and a lot of manufacturing should probably be located there to minimize overall shipping costs.
This would probably be true if China didn't subsidize delivery of packages to the US. In many cases it is cheaper to send a package from China to the US than send the same thing within the US.
The USPS actually subsidizes the shipping of packages from China to the US. It is due to a treaty that was signed before China was an indistrialized nation.
2. Currency Exchange Rate (i.e State Manipulation)
3. Raw Supply Chain Location
4. Government Subsidies
5. Large Domestic Market
Plenty of reasons why the shoes may continue to be made in China or in the Region.
Companies move for a number of reasons, Raw Wages are often not as high on the list as people believe, at least not these days. Government Regulations, Taxation, and other non-wage factors are much higher
I imagine another large factor is economies of scale.
e.g. if a machine that makes 1000 widgets an hour is only 10 times the price of one that makes 10 widgets an hour, then you'll get centralisation.
The other factor I imagine is proximity/availability of raw resources, and refineries of raw resources: if you're not shipping those shoes across the world, you still have to transport the plastic, leather, rubber etc to make them.
But now you're assuming the labor was selected due to proximity to the raw resources when conventional wisdom says the labor was selected purely on cost.
- Location selected based on cost of labor.
- Major port is developed to deal with large amounts of goods
- A few more factories/industries start in same area due to port accessibility
- Refineries are built to be close to location of usage (now they import raw materials instead of refined materials)
- More factories are built due to easy availability of resources + accessible port for export
- Labor gets more expensive, but economies of scale of factories + refineries means it is cheaper to stay in place then to move elsewhere
- Automation slowly displaces labour.
End result being that economies of scale in manufacturing and refining make it cheaper to centralise manufacture and pay for shipping the end product than to decentralise and pay for small factories/refineries everywhere + shipping of raw resources.
As a thought experiment if there was a magical 3d printer that could take any number of raw materials as inputs and combine them in any way would it become more efficient to ship a mix of raw materials to each end consumer? Say I consume x amount of rubber, y amount of cotton, z amount of plastic, etc in my consumer goods in a day, week, month whatever. Could it be more efficient to get the rubber and cotton to my door and run them through the printer than it would to build the shoes, basketballs and t-shirts somewhere else and ship them?
This only works if the materials are homogenous (can be used for lots of different things), don't require too much packaging and shipping overhead themselves, and there isn't a wastage issue from the manufacturing process. And the manufacturer is willing to let the IP out of their factory and into the wild where it can be pirated.
It's a bit like Blue Apron etc; you pay a small premium for the theatre of doing the assembly step yourself.
I don't think they're trying to be racist against robots but wondering why Chongqing Future Robot Co Inc wouldn't put a shoebot in Phoenix to reduce the amount of shipping the shoe requires.
> So who has the best human expertise is irrelevant.
i agree, there's no way on earth any chinese firm could have the best shoe-making robot plant in 20 years. we all know chinese people aren't smart enough for that.
Nationalistic flamewars have no place on HN, regardless of which nations are at issue. We've banned this account. If you don't want to be banned on HN, you're welcome to email hn@ycombinator.com and give us reason to believe that you'll follow the rules in the future.
Why is a lot of software written in Silicon Valley? There are lots of good reasons why it shouldn't be (labor costs, etc), and nothing is as location-independent as software, yet networking effects mean that Silicon Valley remains the hub for software.
China is similarly dominant for manufacturing. It's no longer about cost, it's about the concentration of expertise and cross-fertilization that results. Because of automation nobody will ever have the cost advantage that gave China its current dominance so China will remain the hub for the foreseeable future.
This really depends on what kind of goods you’re trying to manufacture.
Speaking from firsthand experience, if you want to have anything with a circuit in it prototyped, picking a Shenzhen area factory to work with has many advantages. You can have new circuit boards printed and tested within a day. This kind of ecosystem may be hard to replicate elsewhere.
On the other hand, for many other physical products proximity to the end customer is becoming the primary concern. Consider that as real wages in China are increasing, you’re looking at a 20-30% wage increase over the last 4-5 years in China. This means that any cost advantage over other countries is rapidly closing. Chinese raw materials and electricity are no cheaper than in the rest of the world. Due to new factors like increasingly stringent environmental regulations, many of these other inputs are increasing in cost. (http://www.scmp.com/news/china/economy/article/2058175/chine...)
If I want to have a plastics part mass produced, there are a number of regions in the US where there is near-parity with China when you factor in shipping costs, insurance, tariffs, the costs of delays and defects etc.
For industries like textiles, there’s already been significant flight to India and Southeast Asia.
Even if the expertise for this is all in China, why don't the Chinese put a shoe factory/machine in California so I can have my custom made shoes two weeks sooner and cheaper?
It doesn't even require any human experts to run, so why does it matter where the experts live?
I expect that as robots, in a loose sense, become better at fine movements, you'll have more and more "near-sourcing". An early example of this: Brother, the printing company, had an exhibit at CES a couple years ago that really wowed: http://techfaster.com/brother-brought-some-awesome-sewing-ma....
For now, there is at least an initial "activation energy" hump to get over in terms of training people to assemble shoes. A sneaker or dress shoe may seem simple, but there are hundreds of individual stitches that are essential for a quality product. If you're interested, look into the story of American Giant. To make clothes in North Carolina, they had to implement extensive training for the entire supply chain for their clothing.
Some simpler footwear products are actually already made in the U.S. The custom orthotics for my running shoes were measured for and made in the U.S.
First, humans are still necessary - to build the factories, to operate them, to act as security guards - and the cost of those humans is still lower.
Second - all the other costs in low wage countries are also a lot lower. Combine that with how absurdly cheap international shipping is and there is no reason to relocate the manufacture of low-margin goods to the US until you are really starting to talk about the costs of automation being so efficient the extra pennies on shipping will make a difference in earnings. Given the expense of maintaining real assets in the U.S., i.e., buildings (utilities, maintenance, insurance, taxes, building), this is likely to be a while.
"First, humans are still necessary - to build the factories, to operate them, to act as security guards - and the cost of those humans is still lower."
A lot of this work will be automated in the coming decades to the point where the effect of wage costs is marginal. In addition, the salaries in developing countries will continue to increase, eventually catching up Western nations. At that point the main factors are probably tax/import policies, price of enercy etc.
There's something so enjoyable to me in going to the farmer's market and buying nice fresh products from the same friendly grocers I see every week. Maybe this is not available in the US, I don't know, but I always feel sad when I read such posts, as this feels so much like missing out on little human pleasures.
I'd guess the desire not to interact with people, whether through this, or telecommuting, is disproportionately represented here (HN). But not at all a norm in the US. People here shop online because it's the path of least resistance, not because of a specific avoidance of participating in the world.
I prefer shopping offline, to have more excuses to get out, not fewer. (Within reason of course, some stores/experiences really are worth avoiding.)
Interactions with humans just generally leaves me frustrated and annoyed
I have no desire to talk with, or interact with someone while buying my apples or onions. In fact I shop at larger big box stores specifically because the employees are in different and do not attempt to engage with me. I want to get what I need and get out in the most efficient manner possible, small talk and inane banter waste time.
Aside from the associated cost savings, how is that any better than having the delivery guy drop the computer parts at your doorstep after ordering them on your phone?
One would assume drone delivery would be faster, and drones would likely handle the packages better, unlike some (many) drivers who take pride in how much damage thy can inflict on a package including tossing, dropping and kicking packages
Why “lonely?” This sounds lovely to me. The main cost of most goods is the labor, and by eliminating that you drive the marginal cost way down (and as another poster observes, when the cost of labor is eliminated, why ship finished goods long distances?)
And this will leave more time for people to spend with each other instead of in drudgery,
> And this will leave more time for people to spend with each other instead of in drudgery,
This assumes that those increased profits from the increased productivity would end up in the hands of the lower-class laborers. What makes you think this would happen?
Using just wages is misleading since benefits (like healthcare) make up a much larger portion of total compensation than they used to. If you adjust for this, you'd find that that total compensation has roughly kept pace with productivity.
Similar phenomena are visible in other developed countries, perhaps with different dates; this page gives a graph for the UK, where healthcare is paid from general taxation and has not suffered the same cost explosion: http://touchstoneblog.org.uk/2013/05/the-progress-of-exploit...
In that case the decoupling seems to have happened around 1990.
The healthcare cost explosion in the US seems to be a whole other phenomenon which it's hard to get a handle on.
Those charts almost never adjust for feminism and the fact that we added about 40% more people into the work force by allowing women to work. And for the US it certainly doesn't account for the 30 million or so in additional population we've gained through illegal immigration which increases wage competition on the low end of the spectrum, keeping the working poor wages down to the benefit of the upper classes.
I've noticed that the "decoupling" in your UK chart roughly coincides with the creation of the EU which allowed cheap Eastern European laborers to come in which potentially had a similar impact to the illegal immigration in the US. Though I'm less confident of that since I'm not as familiar with economic changes in the UK over that time period.
Productivity and wages are still related, it's just that productivity is not the only variable.
A secular shift in the economics of production by definition can’t be monopolized, thus competition should, as it has through history, force the cost of goods towards the marginal cost of production.
Believing this does not require belief in the goodness of people nor some abstruse economic theory+, just look at the examples of history.
+I love such economics but must admit its predictive power has been poor.
History has also never seen nor experienced anything like the Amazons and Googles and Facebooks of present day. They make the Rockefellers and JP Morgans of yester-century red with envy. As much as I like to say that today is the greatest day in the history of human civilization, I'm quite reticent and fearful for the future. It's inevitable that we will live with either Big Government or Big Corps, but both of them in tandem will not be good for civilization.
Have you read history? Rockafeller’s net worth was 1.5% of the gdp. In the early 20th century a handful of people could solve the government debt crisis.
Going back further Augustus was actually wealthier than the government.
So your competitors are also able to automate the supply chain. So you have to too. To be competitive.
Therefore all of the people doing backend tasks with spreadsheets and 'copy/paste' of addresses, sku codes etc. get to be made redundant. The computer does most of it with the process being customer driven as much as possible.
However this is not where the story ends. To be competitive in this new online marketplace where reviews are everything, there is a new requirement for skilled customer service agents, able to do the things that were not automated, i.e. the things that need customer interaction, product knowledge and skill. There is a need for the language support, e.g. French/German/Italian/Spanish/Portuguese and more if selling into the E.U.
So now instead of having a room full of data entry people doing dull work there is now a room full of people doing thinking person work, where skill and independent thought is helpful.
These new staff need to be treated differently, they can't be hired and fired ad-hoc, they need to be paid properly and given opportunities to grow with the company.
Because you now have intelligent staff it is also possible to involve them in more things, so being able to compete in foreign language markets becomes much more possible as there is now in-house translation facilities from someone customer focused and with product knowledge.
When speaking with customers the 'intelligent human agents' will have a more insightful interaction, so less 'lonely' than when everything was manual and not automated. The agents will essentially be dealing with new edge cases, not routine interactions, e.g. to get address details from a customer.
Because the 'intelligent customer service agents' are creating value they are not a cost in the way the previous 'data entry agents' were.
It is not all doom and gloom, there will be winning companies that will thrive by putting the customer first and hiring better people that are paid better.
Seriously, this piece assumes everything will be exactly like it is now except everything that can be automated will be automated.
It does however have some really pretty vaporwave illustrations so I guess there's that in its favor. I'd listen to an album that had most of those drawings as the cover art.
"Creating, selling, transporting and buying consumer goods such as casual footwear now requires just one significant human—the consumer—plus an individual here and there to oversee assembly and repair robots."
I've said (half-jokingly) to my friends that in the future, recommendation systems will know so much about us and be so accurate that we won't even need to make many purchasing decisions anymore. They will make the decisions that we would have made anyway.
This "futurist prediction" assumes that there will be no more innovation in footwear other than supply chain optimization and no desire for craftsmanship.
Moreover, the kinds of "self driving vehicle" software it is predicting are kind of assuming a new kind of software that doesn't have bugs (what happens on your unmanned container ship when something goes awry?).
The main thing I'd want to know is which false incentives are in the system, eg. subsides, bribes. Those are things that can really be disrupted by the stroke of a pen. If this is the naturally optimal way to build things at scale, then I'm all for it. Also, rail and ship costs are marginally low, but it's hard to get past the visuals created by picturing the vehicles themselves (ie. it's a marketing problem).
80 comments
[ 5.8 ms ] story [ 143 ms ] threadJust to complete the story, there is no consumer because nobody has a job, so there's no reason to create consumer goods in the first place.
This all feels like we're sleepwalking into a nightmarish hell far beyond A Brave New World or 1984. Amazon, drones, mass surveillance, erosion of privacy. The day will come when we no longer can opt out.
That day already came a long time ago. Even those of us who do everything we can to avoid the surveillance end up being sold out (often inadvertently) by those we know when they share information about us or have their contact lists harvested. That's without even getting into the data Google/Facebook/Amazon/etc collect from public records, credit card companies, etc.
Try think better and further!
Of course then things would be expensive...
They compete by being extremely efficient with their use of labor hours and cutting waste. Just-in-time everything.
I'd be careful to extrapolate your direct experience to indicate trends.
Hoenstly, the chemicals are horrendus and chrome's days are numbered in any capacity thanks to new mirror finish water based paint. Even china will soon ban hex chrome process, by proxy if not explicitly.
2. Currency Exchange Rate (i.e State Manipulation)
3. Raw Supply Chain Location
4. Government Subsidies
5. Large Domestic Market
Plenty of reasons why the shoes may continue to be made in China or in the Region.
Companies move for a number of reasons, Raw Wages are often not as high on the list as people believe, at least not these days. Government Regulations, Taxation, and other non-wage factors are much higher
The other factor I imagine is proximity/availability of raw resources, and refineries of raw resources: if you're not shipping those shoes across the world, you still have to transport the plastic, leather, rubber etc to make them.
As a thought experiment if there was a magical 3d printer that could take any number of raw materials as inputs and combine them in any way would it become more efficient to ship a mix of raw materials to each end consumer? Say I consume x amount of rubber, y amount of cotton, z amount of plastic, etc in my consumer goods in a day, week, month whatever. Could it be more efficient to get the rubber and cotton to my door and run them through the printer than it would to build the shoes, basketballs and t-shirts somewhere else and ship them?
It's a bit like Blue Apron etc; you pay a small premium for the theatre of doing the assembly step yourself.
Proximity to resources is priced in to 'cost', no?
why is this so difficult for you to imagine?
i mean, i'm pretty sure i know why, but ask yourself.
The fully automated shoemaking machine could be placed anywhere the raw materials could be shipped.
i agree, there's no way on earth any chinese firm could have the best shoe-making robot plant in 20 years. we all know chinese people aren't smart enough for that.
https://news.ycombinator.com/newsguidelines.html
China is similarly dominant for manufacturing. It's no longer about cost, it's about the concentration of expertise and cross-fertilization that results. Because of automation nobody will ever have the cost advantage that gave China its current dominance so China will remain the hub for the foreseeable future.
Speaking from firsthand experience, if you want to have anything with a circuit in it prototyped, picking a Shenzhen area factory to work with has many advantages. You can have new circuit boards printed and tested within a day. This kind of ecosystem may be hard to replicate elsewhere.
On the other hand, for many other physical products proximity to the end customer is becoming the primary concern. Consider that as real wages in China are increasing, you’re looking at a 20-30% wage increase over the last 4-5 years in China. This means that any cost advantage over other countries is rapidly closing. Chinese raw materials and electricity are no cheaper than in the rest of the world. Due to new factors like increasingly stringent environmental regulations, many of these other inputs are increasing in cost. (http://www.scmp.com/news/china/economy/article/2058175/chine...)
If I want to have a plastics part mass produced, there are a number of regions in the US where there is near-parity with China when you factor in shipping costs, insurance, tariffs, the costs of delays and defects etc.
For industries like textiles, there’s already been significant flight to India and Southeast Asia.
And Chinese brands like Li-Ning grabs all other markets.
The vast majority of software are written a) in house b) outside of SV c) in Java and C#
It doesn't even require any human experts to run, so why does it matter where the experts live?
For now, there is at least an initial "activation energy" hump to get over in terms of training people to assemble shoes. A sneaker or dress shoe may seem simple, but there are hundreds of individual stitches that are essential for a quality product. If you're interested, look into the story of American Giant. To make clothes in North Carolina, they had to implement extensive training for the entire supply chain for their clothing.
Some simpler footwear products are actually already made in the U.S. The custom orthotics for my running shoes were measured for and made in the U.S.
Infrastructure, price of electricity, political stability, availability of cheap land.
Second - all the other costs in low wage countries are also a lot lower. Combine that with how absurdly cheap international shipping is and there is no reason to relocate the manufacture of low-margin goods to the US until you are really starting to talk about the costs of automation being so efficient the extra pennies on shipping will make a difference in earnings. Given the expense of maintaining real assets in the U.S., i.e., buildings (utilities, maintenance, insurance, taxes, building), this is likely to be a while.
A lot of this work will be automated in the coming decades to the point where the effect of wage costs is marginal. In addition, the salaries in developing countries will continue to increase, eventually catching up Western nations. At that point the main factors are probably tax/import policies, price of enercy etc.
Where the Author says Lonely, I say Wonderful....
The less interaction I have with people to get the things I need/want the better.
The day I can have all my food, groceries, and Computer parts delivered by Drone after ordering them on my phone is a day I will be happy.
I prefer shopping offline, to have more excuses to get out, not fewer. (Within reason of course, some stores/experiences really are worth avoiding.)
Interactions with humans just generally leaves me frustrated and annoyed
I have no desire to talk with, or interact with someone while buying my apples or onions. In fact I shop at larger big box stores specifically because the employees are in different and do not attempt to engage with me. I want to get what I need and get out in the most efficient manner possible, small talk and inane banter waste time.
And this will leave more time for people to spend with each other instead of in drudgery,
This assumes that those increased profits from the increased productivity would end up in the hands of the lower-class laborers. What makes you think this would happen?
http://www.nber.org/digest/oct08/w13953.html
In that case the decoupling seems to have happened around 1990.
The healthcare cost explosion in the US seems to be a whole other phenomenon which it's hard to get a handle on.
I've noticed that the "decoupling" in your UK chart roughly coincides with the creation of the EU which allowed cheap Eastern European laborers to come in which potentially had a similar impact to the illegal immigration in the US. Though I'm less confident of that since I'm not as familiar with economic changes in the UK over that time period.
Productivity and wages are still related, it's just that productivity is not the only variable.
Believing this does not require belief in the goodness of people nor some abstruse economic theory+, just look at the examples of history.
+I love such economics but must admit its predictive power has been poor.
Going back further Augustus was actually wealthier than the government.
So your competitors are also able to automate the supply chain. So you have to too. To be competitive.
Therefore all of the people doing backend tasks with spreadsheets and 'copy/paste' of addresses, sku codes etc. get to be made redundant. The computer does most of it with the process being customer driven as much as possible.
However this is not where the story ends. To be competitive in this new online marketplace where reviews are everything, there is a new requirement for skilled customer service agents, able to do the things that were not automated, i.e. the things that need customer interaction, product knowledge and skill. There is a need for the language support, e.g. French/German/Italian/Spanish/Portuguese and more if selling into the E.U.
So now instead of having a room full of data entry people doing dull work there is now a room full of people doing thinking person work, where skill and independent thought is helpful.
These new staff need to be treated differently, they can't be hired and fired ad-hoc, they need to be paid properly and given opportunities to grow with the company.
Because you now have intelligent staff it is also possible to involve them in more things, so being able to compete in foreign language markets becomes much more possible as there is now in-house translation facilities from someone customer focused and with product knowledge.
When speaking with customers the 'intelligent human agents' will have a more insightful interaction, so less 'lonely' than when everything was manual and not automated. The agents will essentially be dealing with new edge cases, not routine interactions, e.g. to get address details from a customer.
Because the 'intelligent customer service agents' are creating value they are not a cost in the way the previous 'data entry agents' were.
It is not all doom and gloom, there will be winning companies that will thrive by putting the customer first and hiring better people that are paid better.
18 weeks? Stuff that. The sneakers will be printed on demand at a local fab and delivered by drone within the hour.
It does however have some really pretty vaporwave illustrations so I guess there's that in its favor. I'd listen to an album that had most of those drawings as the cover art.
I've said (half-jokingly) to my friends that in the future, recommendation systems will know so much about us and be so accurate that we won't even need to make many purchasing decisions anymore. They will make the decisions that we would have made anyway.
Moreover, the kinds of "self driving vehicle" software it is predicting are kind of assuming a new kind of software that doesn't have bugs (what happens on your unmanned container ship when something goes awry?).