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capital spending, robots and “reshoring” of manufacturing to advanced economies

PRACTICAL STOCK INVESTING

Blogging for the New York Times, Nobel laureate Paul Krugman recently referred to a Times article on the possible return to the US of manufacturing once outsourced (or “offshored”) to Asia.  In “Rise of the Robots,” Mr. Krugman suggests that much (all?) “reshored” manufacturing will be highly capital-intensive.  Factories will be run by robots, with only a few, highly educated, highly paid human supervisors finding being employed.  Therefore, he concludes, reshoring isn’t the job creation panacea some might think.

I have several comments:

1.  This is not new news.

For over two decades, tech businesses like semiconductor manufacturing have been very highly automated.  Component assembly is increasingly so.  In  the semiconductor case, only a few process engineers watch over $3 billion installations that may generate billions in annual operating profit.  Units of output are tiny and weigh next to nothing, so transport costs aren’t that important.  As a result, tax incentives…

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About Nicholas Maithya

I am a writer focussing on disruptive technology, Fintech, Big Data and Internet of Things, Online Marketing trends, and investments. When I am not writing about these, I am probably in the gym working out, out and about with family, watching the news (basically business/technology) or soccer. That's why I do sometimes cover soccer-related stories.

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