mead cohen berger shevtsova garfinkle michta grygiel blankenhorn
Google Glass Will Be Made in the USA

Plenty of people have already chimed in about whether Google Glass, the high-tech mobile camera, video, and computing device welded to a pair of glasses, is an innovative work of staggering genius or, well, kinda dorky-looking, but we’re struck by something else entirely: Google’s decision to produce the device in Silicon Valley, USA. The FT reports:

The small scale, high cost and complexity of the project’s initial run makes it practical to base manufacturing operations near the search company’s Silicon Valley headquarters, according to people briefed on the plans….

Manufacturing locally will allow Google’s engineers to be closely involved with the production process and provide more opportunities for last-minute fixes and for personal customisation….

Such moves may also blaze a trail for Silicon Valley’s resurgent community of hardware start-ups, which remain largely reliant on cheaper offshore manufacturing. As contract device makers scale up production for large clients such as Apple and Google, their prices will fall and provide capacity for smaller companies too.

Two trends are converging here. The first is the insourcing of manufacturing back to US shores. The growth of the middle class in countries like China raises labor costs there, while automation makes US-based labor costs less burdensome. American factories boast higher quality control, a simpler supply chain for bringing products to market, and access to plentiful supplies of cheap natural gas. Second, infotech sector firms are increasingly aligning behind the interests of the nation states they call home. Google increasingly behaves as if a close relationship with a strong US government is a vital component of its business model. Amazon is developing a cloud-computing network for the CIA.

These are significant changes, but at the same time we shouldn’t expect this new era of American manufacturing to replicate the mass employment of the old days. Santa Clara isn’t going to be the new Detroit.

The future of manufacturing seems to lie in high value-added, sophisticated, and highly productive jobs. This will be great for those who have such jobs, and it will be good for the economy overall, but it will not recreate the Fordist middle class of old.

[Google Glass image courtesy of Wikimedia.]

Features Icon
show comments
  • Luke Lea

    “while automation makes US-based labor costs less burdensome . . .”

    In two ways. First, because you need less of it. And second, because the little you need is cheaper when there is less demand for it. This would be true even if we were not trading with China. If we had a balance of trade with China (exporting as much as we import) we would manufacture more than we do now, demand for labor would rise, and wages would be higher. If we placed a tariff on Chinese imports we would import less and manufacture more here at home, which would increase the demand for, and the wages of, labor. Or, alternatively, we could trade with China but tax capital and subsidize labor, thereby sharing the gains of trade. In the case of automation, considered by itself, the only way to share the fruits of advancing technology between labor and capital is to place statutory limitations on the length of the workweek, thereby artificially restricting the supply of labor and raising its price. Even so this would not address the problem of mass immigration, which increases the supply of labor and thus lowers its price.

    Without addressing all three of these factors simultaneously the problem of low wages in America cannot be solved. And, no, I don’t buy the argument that the abundance of cheap labor in China — much cheaper than in the US that is — is about to dry up. That will take generations.

© The American Interest LLC 2005-2016 About Us Masthead Submissions Advertise Customer Service