How We Compete

Based on a five-year study by the MIT Industrial Performance Center, HOW WE COMPETE goes into the trenches of over 500 international companies to discover which practices are succeeding in today’s global economy, which are failing –and why.

There is a rising fear in America that no job is safe. In industry after industry, jobs seem to be moving to low-wage countries in Asia, Central America, and Eastern Europe. Production once handled entirely in U.S. factories is now broken into pieces and farmed out to locations around the world. To discover whether our current fears about globalization are justified, Suzanne Berger and a group of MIT researchers went to the front lines, visiting workplaces and factories around the world. They conducted interviews with managers at more than 500 companies, asking questions about which parts of the manufacturing process are carried out in their own plants and which are outsourced, who their biggest competitors are, and how they plan to grow their businesses. HOW WE COMPETE presents their fascinating, and often surprising, conclusions.

Berger and her team examined businesses where technology changes rapidly–such as electronics and software–as well as more traditional sectors, like the automobile industry, clothing, and textile industries. They compared the strategies and success of high-tech companies like Intel and Sony, who manufacture their products in their own plants, and Cisco and Dell, who rely primarily on outsourcing. They looked closely at textile and clothing to uncover why some companies, including the Gap and Liz Claiborne, choose to outsource production to foreign countries, while others, such as Zara and Benetton, base most operations at home.

What emerged was far more complicated than the black-and-white picture presented by promoters and opponents of globalization. Contrary to popular belief, cheap labor is not the answer, and the world is not flat, as Thomas Friedman would have it. HOW WE COMPETE shows that there are many different ways to win in the global economy, and that the avenues open to American companies are much wider than we ever imagined.

SUZANNE BERGER is the Raphael Dorman and Helen Starbuck Professor of Political Science at MIT and director of the MIT International Science and Technology Initiative. She was a member of the MIT Commission on Industrial Productivity, whose report Made in America analyzed weaknesses and strengths in U.S. industry in the 1980s. She lives in Boston , Massachusetts.

From the Hardcover edition.

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Title of ebook: How We Compete
ISBN: 9780385516969
parent-ISBN: 9780385513593
Publisher: Doubleday Publishing
Pages: 320
Published: 12-2005
Released online for download: 12-27-2005
Author of eBook: Berger, Suzanne

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How We Compete

Chapter One

CHAPTER 1

Who’s Afraid of Globalization?

Globalization means a world of opportunity and a world of danger. We rush to Wal-Mart for the basics, but we know that many of them are made in China or some other low-wage country. We want low prices at Best Buy and Circuit City on digital cameras and ﬂat-panel TVs, but we fear that our good fortune as consumers costs jobs at home. We like to be able to place orders on the telephone twenty-four hours a day, but when we hear strange accents on the other end of the line, we wonder where on earth the operator sits. We realize when we think about it that the rise out of poverty of more than 2 billion Chinese and Indians must be good for the world; we question whether it’s good for us.

We celebrate the fact that American success is built on innovation and rising productivity, but we wonder whether the new technologies and products will create enough jobs and if our children will live as well as we do. Surveys in the United States and Europe ﬁnd very mixed opinions about globalization, often reﬂecting these conﬂic ... read full excerpt from: How We Compete ebook

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