Hiring an engineer in Guangdong costs more than hiring one in Malaysia
Surprise, Surprise! This IHT report reveals that oft-repeated predictions of the demise of South-East Asia's manufacturing industry might just be wrong.
Though the impact of China has been dramatic, ("The Malaysian government estimates that almost 15 percent of Penang's manufacturing jobs were lost between 2001 and 2003") some manufacturers are now seriously reconsidering whether they should be putting all their eggs into the single bamboo basket.
Some of their concerns: "Rampant technology piracy, resurgent nationalism, and - surprisingly in a country of 1.3 billion people - a dire shortage of high-skilled labor."
And interestingly, the article continues: "But the most common frustration foreign investors face in China - and one of the biggest surprises - is the spiraling cost of increasingly scarce skilled labor, which on China's eastern seaboard can roughly approximate salaries in some of its Southeast Asian rivals. Indeed, executives say hiring an engineer in Guangdong already costs more than hiring one in Malaysia."
With so many manufacturers racing to hire a limited pool of skilled workers, it doesn't surprise me that this has happened to China. But let's not kid ourselves into thinking that Penang is going to boom like the old days again - we'll more likely move up the value chain and produce more advanced electronics components to complement China's factories - and then find that we have to move up higher again to keep at least 2 or 3 steps ahead of China.
posted by hew @ 11:40 am
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