Topic: From Manufacturing to Services and Its Local Impact on the Economy (Read 236 times)

I'm not an economy expert so take my comment however you like but I feel like these "professors" are caught up in a certain flawed and in some cases obsolete ideology and are incapable of thinking outside the box. This is a general problem I've seen a lot around the world not just about these two who wrote this article.

I can see that their statements and even at the end their suggestions of what should be done is alongside that old ideology. For example they are too caught up into the Consumerism methods where you first create a product and then find demand for it. You can clearly see it in the "What should Chinese companies do" part at the end and in wrong statements such as this:
What China has always done was not the same Consumerism approach as exists in the West which is to produce something, then lure people in to buy it (eg. release pretty much the same iPhone every year and still get people to buy it).

The Chinese approach is to first look what the people around the world want and second to look at the quality of the product they want and third look at how much they can pay for it.
So for example if someone in USA wants an electric toothbrush but can only afford to pay 10 bucks for it, they manufacture a low quality toothbrush worth $10 for that demand that already exists. They do NOT lure in people with "cheap low quality offerings", people are already looking for cheap goods because that's what they can afford.

That's not all China does. There is also other people who want a toothbrush and can afford to pay 50 bucks for it so China also produces higher quality toothbrushes worth $50 for that demand.

The reason why China is known for low quality products is first because of propaganda and second because believe or not there is more people in lower class with less money seeking cheap goods than there are people in higher classes looking for expensive goods. So China as the world's factory produces more goods for the category that is the majority so it looks like all their products are low quality where as it's just the majority because that's what the majority demands.

China is of course increasing its production capacity of high-tech goods that are also more expensive but that is not the same as transitioning to a "service-based economy".

The article proves nothing but the author considered very small scale part of China considering as whole China. I just want to counter that with what happened when China locked borders due to COVID, everything stumbled all around the world and if they do the same thing today the situation will be pretty much same.

Although China is not only known for manufacturing cheap products but they also capable of making quality products infact all the mobile we use still today manufactured in China still now and only assembled in other countries.

Your assertion about manufacturing being a significant backbone of the economy is indeed correct and should not be overlooked. The services, such as banking, that developed countries offer are intricate, they are not achieved easily. Yet we must also acknowledge that every nation has its own unique competitive advantages.

China stands as a great exemplar in this light,  emerging from a foundation of robust manufacturing strength to now take its place among global front-runners in production and technology. Manufacturing thus forms the cornerstone of the economy, providing impetus for other sectors to blossom and grow alongside it.

Despite the vital role that services play, manufacturing still holds its significance in the realm of producing tangible goods and fostering employment opportunities. A nation cannot wholly rely on its service industry; manufacturing not only fosters stability but also acts as a frontier for technological innovation and production efficiency.

To sum it up, finding equilibrium between these two sectors would spell out sustainability for any economy. The thriving nations often have prowess rooted in both sectors, which then paves way for a dual strength holding point ensuring stability and sustenance for growth.

Are you sure about this? Because from the Harvard Business Review article with the title, What China’s Shift to a Service Economy Means for Its Managers, the authors clearly states that China is moving away from a manufacturing-driven economy to a more consumption and service-driven model. Unless you can provide a counter opinion with evidence about this, I think I'd be sticking to my stance about China's economic model.

China isn't service based economy and I don't think they ever planned from giving up their manufacturing hub of the world status. Even though USA is highly service based economy due to technology based jobs still it's not completely relying on it and still atleast 5% of people doing agriculture on various crops and exporting as well like corns.

Countries should be focusing on less dependent on any country for their future which is self sustainable economy even though it's not 100% possible they should move towards it that will give the organic growth in the economy that can withstand last long than these quick shifts in the services and manufacturing goods.

Yes because they are already known to be the main supplier of different goods from different parts of the world but it won't be possible if not because of that strict system they have implemented. Other countries might be happy because of the service China did to them but I think they can also feel bad once they realize that there are poor individuals who are busting their assess all day - all night only to make this possible. And the worse thing is, they also didn't get paid well.

Jobs in China are in demand because of the fact we told earlier but majority of those are only the same as the other, so quitting and trying their luck on the other, might be useless. They can't also get accepted on a better job because of their poor background.

When it comes to my country, we need to get into certain areas of manufacturing because it's essential for our survival as a country. I initially wrote that we're mainly agricultural, but apparently we are actually 60% service economy.
I do believe that transitioning more to services is still the right idea for most economies, but someone needs to do agriculture and manufacturing, so relying fully on services is very risky.
Even if we look at China that the op mentioned, it actually has a balance: it's nearly 55% services but also almost 40% industry.

The countries that you have mentioned though are 1st world, and perhaps it was easy for them to make transition, in my opinion. And there are countries who might be trying this formula but failing and still rely on the only thing that can bring money to them, exporting their products.

So there is not positive effects on the country that I lived in, but obviously, we have seen countries that have transitioned really become one of the biggest, but there could be some drawbacks as well, like their population getting old, and the new generation can't adapt on the new economy and that's why they really need immigrant workers for their service-based economy transition.

I have always felt like my country contributed more in terms of services. We probably are one of the biggest service distributors not only within our country but in the whole world. As expected, when I searched for data it is indeed true that my country has long been a service based economy.

Even from the year 2000s until now, it gradually just increased. It is where the biggest percentage of our GDP comes from and it has always been a debate whether it will continue to be. The answer is yes. Though for a stronger economic future, both goods and services must be utilized.

Your observation is valid since there seems to be really a shift in economic strategies or trends. Going from goods based economy to s service based one gives way for more employment and distributes a fairer share of income among citizens. Another beneficial factor of a service based economy is that it contributes greatly to the GDP of a country.

A higher GDP typically translates to a great economic situation.
I don’t live in any of the countries aforementioned but China and United States seems to be still reliant on manufacturing their goods and distributing it all over the world.

Have never seen such within our country in fact our country has to from a productive nation to a consumption nation where no change are made from the previous to the present rather moving from good to worse. I don't really know what one could account for in our country i believe you understood more better.

Countries like India are into both and I don't think China is into service based industries as it's still relying on manufacturing industries but if you take example of India it's everywhere be it healthcare and Pharma or Information technology or educational institutes you name it they are in it, on the other hand we cannot compete with some countries in manufacturing since they have cheap or forced labour but we can win if we do our best in service industry.

Despite not having personal experience, I can notice similar trends in many countries, including those that have transitioned to a service-based economy. However, the impact also depends on various factors such as government policy, infrastructure, and workforce readiness to adapt to these changes. There are countries that focus on creating jobs to improve the economy, but I am in a country that focuses on offering services. This has a synergy impact between one country and another.

I think this is a transition that happens when a country has already grown rich. And this seems to be a logical change. You can't just start with technology, for example, or healthcare. You start with taking advantage of whatever resources you have. As soon as you have the wealth, you can freely explore and generously finance other developments and ventures.

But this isn't absolute. My country isn't strong in both manufacturing and industrial production, but we are offering a labor force that could work in different kinds of services around the world. We're exporting nurses and other healthcare workers, seafarers, laborers, teachers even, and maids unfortunately, among others.

But the country itself can't offer these services. We cannot afford offering the best of healthcare services to the world. Neither do we offer global shipping or transportation services. We also don't offer construction services to the international community. We can only send servicemen.

But I think the growth of this sector in the economy has given us a lot. The entire country's economy is heavily dependent on this. This is where a big portion of the country's labor force finds great opportunities.

Are they?
China is pretty much the world's factory and they do have a massive production based economy.
Germany I'd say is both but mostly production based economy (although deindustrialization is taking that away slowly).
US is neither of these, US economy is a debt based economy.

I honestly see no major shift in the type of each of these economies. Please provide more information on why you think there is such a shift taking place.

We are shifting in the opposite direction meaning we are increasing our production (consequently exports) and that has had positive effects such as increasing employment (and decreasing unemployment), increasing GDP and economic growth, increasing foreign reserves, decreasing inflation, ensuring food security (eg. increasing wheat production by 9 million tons in past 2-3 years), and a lot more.

By the way, type of the economy and whether that type works or not depends a lot on the global situation. For example at times like these years where there is a lot of global tensions and wars that have disrupted production and global supply chain, having any economy other than a solid production based economy will have terrible consequences.

I have something to say about the one regarding China, I think that they're not the heaven for production anymore, maybe they're still at the top but if I recall correctly, India is closing in on them and at the same time, a lot of big companies are slowly migrating to other countries for labor because it's getting expensive in China, not to mention that they're currently experiencing a population decline due to their stupid idea of One Child Policy, so I'm sure that we're not going to be seeing China at the top of production soon. Totally in agreement with your opinion about the keeping of manufacturing industry, I mean look at it this way, people have needs and some people need jobs, and it just so happens that the sector of manufacturing can offer that, basically, the only thing that would totally lose that industry is if there's no humans anymore or if the desire to want something or to work for money is gone with the humans, that's probably the only time that we'd see the decline.

I live in a country where I see the combination of services and manufacturing as not being separated, as I see it as just making the most of the available resources to meet the needs of both parties.

Tourism is something that I see in this country really thriving as it has all the necessary things to attract customers, but I also know that agricultural production is also something that this country very strong as they are almost a major food exporter to the world. So taking advantage of your abilities and learning about change to adapt to change to find a direction for development without being too dependent on one field is something I believe every country needs.

For a country that has a primarily agricultural economy with some trend toward services and manufacturing, we have a lot of raw materials but the industry is still in its infancy.

Large countries give up industries to smaller, developing countries that aspire to become industrialized countries. Large countries want to get rid of many industrial problems such as expensive raw materials, high-paid labor, environmental pollution, etc.

Why go to all this trouble when they can simply shift all this heavy burden to another country that will manufacture for them at a lower cost, while they head to the comfortable and profitable service sector.

Could this transition mean that the service-based economy is more superior to the manufacturing-based economy—that is, that the economies of countries that are service-based are doing better than those of countries with manufacturing-based economies?

Or could the transition be both ways that a country can transition from a service-based economy into a manufacturing-based economy to boost the economy?

China is still goods based my guy, they haven't left that part yet, they're still the biggest goods producing country right now and given the current situation in their real estate and all the lies that's been exposed about China, I think that we're going to be seeing China take much longer to become like USA in terms of economy, not to mention that there's a population collapse in China right now, it's really impossible for China to be this big but you're right about countries transitioning from goods producing to service producing countries but that don't mean they've lowered their output on producing those goods, they just got a really good economy and the improvement of their country is just that good.