My Huffington post blog article on Apple

[Yu Zhou]

Hi, I would like to hear your feedback on my blog post on Huffington
Post on Apple factories in China. Thanks

http://www.huffingtonpost.com/yu-zhou/apple-china-factory_b_1240580.html

--
Yu ZHOU
Professor of Geography
Department of Earth Science and Geography
Vassar College
Tel: 845-437-5543
Fax: 845-437-7577
E-mail: yuz...@vassar.edu
You can access my publication through this site
Website: http://earthscienceandgeography.vassar.edu/bios/yuzhou.html

Author: Inside Story of China's High-tech Industry: Making Silicon
Valley in Beijing. Rowman and Littlefield, 2008.

[William Lazonick]

Yu,

 

Excellent article. The fact is that in any society the conditions for work and pay are regulated by social norms. Historically these norms have been at most national but often have even varied across national sub-regions. Given the globalization of production, the social norms have to become global as well.  The New York Times report on Apple was another case of the mainstream media failing to recognize the larger social implications of its own report.

 

All the best,

 

Bill

 

William Lazonick
Professor and Director, UMass Center for Industrial Competitiveness
President, The Academic-Industry Research Network (theAIRnet)
12 Newport Road, Cambridge MA 02140
617-576-0880

 

My book, Sustainable Prosperity in the New Economy? 

Business Organization and High-Tech Employment in United States

(Upjohn Institute, 2009) was awarded the 2010 Schumpeter Prize.
For a review of the book, click here.

 

See my series of posts on the theme,
"Breaking through the jobless recovery", on

the Perspectives page of

The Academic-Industry Research Network

http://theairnet.org/perspectives/?cat=5

[Jason Dedrick]

Hi Yu,

I found your article very interesting. I think there is room for an independent verification that suppliers are following basic labor and environmental practices, which might even be welcomed by the big electronics firms. I don't think the idea of setting floor prices would have much chance, though. The prices of components are the subject of a lot of negotiation, and neither the buyer nor seller would be willing to have these prices out in the open. That was the main reason that B2B marketplaces never took off. Also, considering that a laptop has over 2000 parts, which change in price almost weekly, and distributors can have over a million different items in their databases, the practical obstacles to creating maintaining an up-to-date set of price information would be pretty much insurmountable. Monitoring actual prices on transactions would be even more difficult.

In the end, I think it's up to the likes of Apple, Dell, HP etc. and their top-tier suppliers to monitor practices in the supply chain. If there's enough pressure from consumers, they'll do a better job. Alternatively, the US government could establish some policies regarding overseas suppliers, like they have with regard to offering bribes. Creating environmental and labor standards in the WTO has been discussed, but has never really gotten off the ground.

Jason Dedrick
Associate Professor
School of Information Studies
Syracuse University

-----Original Message-----
From: chinainn...@googlegroups.com [mailto:chinainn...@googlegroups.com] On Behalf Of Yu Zhou
Sent: Sunday, January 29, 2012 10:29 PM
To: ChinaInnovation-l
Subject: Google China Innovation Group My Huffington post blog article on Apple

[Yu Zhou]

Thank you for your feedback.

The problem I have with asking Apple or whoever else to discipline
their OEM suppliers is that it gave more power to Apple or other lead
firms, and shift all the blames and responsibilities of ethical
practices to their suppliers. The root of the problems is at the lead
firms when they constantly push for lower prices while asking the
suppliers to do everything in addition to having an ethical practices.
As American said, you can not have the cake and eat it too. Apple's
profit margin has been increasing in the last few years, while at the
same time, Foxconn's margin is half of it had been from a few years
ago (about 2%), while workers salary is increasing, shipping is
increasing and other costs are increasing. Something got to give
somewhere. It would be logical to have Apple sacrifice some of its
hefty profit margin to the rest of the chain. But this could not be
done by Apple, being the sole enforcer. Fair trade is invented to
deal with the bargaining power problems of the large number of growers
facing small number of buyers. It has its own problems but at least it
got the third party involved. Electronic is complex for consumers,
but not necessarily so to the people inside the trade. While everyone
hope to have deals in secret, many seem to know the prevailing
industrial standard pricing. It is not as if they are functioning in
the dark.

In addition, if the prices or practices are so secret for even people
in the trade, how could pressure from consumer actually work? We are
back to square one of trusting Apple or other lead firms to do a good
job disciplining their suppliers, and be upset that they did not.

Systematic problem needs systematic solution. I am not sure how
practical the fair trade model work in electronics. What I try to do
is to bring some different thinking in the debate. There are too much
of conflict of interests to expect the lead firms to fix the problems.

Yu Zhou