Friday, July 6, 2007

Responding to a New World Order requires some radical thinking

Brown is well aware of how lower production costs in China and other parts of the developing world pose major challenges to manufacturing in Britain. But the traditional argument has been that knowledge - in the form of high-tech skills, design and the rest - is the way to respond. Hence the stress on "education, education, education" under Tony Blair. But, although the new Prime Minister is promising more focus on this area, it is not likely to be enough on its own.

A new book, Dragons At Your Door: How Cost Innovation is Disrupting Global Competition by Ming Zeng and Peter Williamson (Harvard Business School Press, £16.99), suggests that the Chinese are not content to be merely a cheap workshop for Western companies. Instead, they are creating their own multinationals able to compete with and even displace established corporations.

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