Economic Geography of Manufacturing Of The Future
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Now, let’s imagine the economic geography of manufacturing of the future: in the year 2025. Background assumptions
While there remains a wage gap between Eastern China and Northern Mexico, the gap has shrunk considerably. Currently, wage rates in Eastern China are now only 10% lower than in Northern Mexico (in 2013, the gap was roughly 24%; see, for example, this articleLinks to an external site.).
Mexico retains its strong locational advantages relative to United States consumer markets.
The Mexican government has engaged in a program to redevelop the Northern border as a high-tech competitor to Asia, with substantial investments in worker training, infrastructure, and so forth.
Through economic growth, China has evolved a larger consumer market, and exports relatively less of the goods it produces.
Because of a combination of startling economic growth in China and India, continued geopolitical conflict in the oil-rich Middle East, and dwindling discoveries of new oil reserves, oil prices have skyrocketed to over $200/barrel (more than twice what they were in 2013).
Other intervening opportunities have emerged.
Before we proceed further, consider the processes underlying these projections; why am I making these assumptions? What is the changing geography they suggest?
Consider these three possible scenarios for 2025:
Apple produces most of its new iPhone 20s devices in Northern Mexico; factoring in all the costs of production and assembly, it’s just cheaper to produce there than in China.
Apple continues to do all iPhone production and assembly in China.
Proving Steve Jobs wrong (who, shortly before his death reportedly told President Obama that these “jobs aren’t coming back”; see Duhigg and Bradsher, 2012), Apple decides to move its assembly and production back to the United States, building massive new factories, and hiring hundreds of thousands of workers. Consumers happily pay 25% more for the products because they can now say “Made in the USA.”
Choose one of the above scenarios, and submit a 500-700 word essay that supports your choice, based on the above assumptions, and evidence of current trends from course readings and other material.
If you would like, you may consider variants of the above scenarios as well.
Your assignments must include proper APA citation of any data. The citations above are already in that format, so you may copy-and-paste them to include in your paper. Just make sure to then use them in text (Doe, 2013) and such