10.21 Notes

Econ 274 / October 21, 2015

Misc on Hessler part III

– The Machine:

– copied, illicitly and probably poorly

– enabled entry to the industry to all willing to pay the cost of $65,000

– didn’t work right, needed to be paired with business skills (who will buy, need for color books) and operating experience (cantankerous equipment) plus management of that sort of production operation

cf. work of David Teece on “turnkey” projects (I discussed H2SO4 plants as an example; I could have used boilers or many other seemingly generic “by the book” technologies). most not fully successful, some outright failures, even though mature technologies replete with operating manuals (sufficient for using software, right?) and operations management consultants.

∑ technology is more than blueprints

– why Lishui? 丽水市

– location: historically at intersection two rivers, today on major expressway connecting to Wenzhou 温州 and just off another expressway further inland [it’s about 100 km east of Jingdezhen 景德 of porcelain renown]

– industrial park: local government role. local enterprise as real estate developer [may have had some rights to land, certainly knew how to, well, “play the game” to get permits and to get the local branches of various banks to finance]

– for Boss Gao & Boss Wang, a better location than their rivals relative to existing bra manufacturers.

– labor

– Tao family, with youngest daughter as initial worker

– prejudices (appropriate or not) in hiring: 

young, inexperienced women

off the farm: only 12 hour days?! a life of leisure, and in a city!

– entrepreneurship:

– knew of profits, earlier business past prime due to new entry.

– but lower expectations

– not new to setting up ventures, but varied “unconnected” background reflecting the rapid transformation of China and the nature of jobs useful for those with ambitions

– lots more in the chapter. first local retail business? shifting nature of entertainment? ties to village (hitching rides with strangers…)