Addressing the impact of globalisation, computerisation and the growing wealth disparity on the world and, in particular, the supply of industrial safety footwear.
If not China, where? This question is now being asked far and wide, from nation to nation and industry to industry. People to people. The situation has also been exacerbated by the Trump USA Presidential Election Victory and his many ‘rantings’ on what he will and won’t do when he is in power.
There is no way to disguise the fact that as of this moment, with the US in an advanced state of anguish as to what is their future national and global direction, the subject of today’s current China problems is but one of the many major obstacles that Western sourcing has to analyse, planning for a worst case scenario while hoping for a better one.
While still reeling from Brexit, the world now also has to contend with its American counterpart, Amexit. It is quite possible that these two events may still set off a whole series of domino effects in other countries suffering from the same “mass unrest”.
We went in just a few short weeks from worrying about the impact of Brexit on EEU trade conditions to now having stressful thoughts as to what could be the outcome if the USA turns insular or has grandiose ideas for their own global dictatorship terms.
On top of this scenario, we have major trading agreements pending such as the Trans Pacific Partnership (TPP) and another series of free trade agreements called the Transatlantic Trade and Investment Partnership (TTIP) between the EEU and other major nations that were scheduled to include the USA.
Added to this Castro died in Cuba, leaving the question of what will happen next. Putin is running up a series of political and military victories and the Chinese have now mastered space and how to build fake islands in the south pacific to claim extra maritime boundaries.
If there was any good executed in the past six months it was perhaps the fact that a Nobel prize went to none other than Bob Dylan.
The general consensus as to the root causes of Brexit and Amexit, according to elite experts, was that the anger and rejection were caused by three factors, namely globalisation, computerisation and bitterness towards national leaders who were making secret trade agreements that only seemed to be of benefit to the wealthy benefactors of such politicians and did not create jobs for the less educated.
The irony of this scenario is that China becomes the main central focus of everything that has happened and to be blamed for.
History is full of examples of the rise and fall of great nations and it is interesting to note that some form of globalisation strategy was the eventual demise of those same expansive thinking nations over the centuries.
The original Victorian British industrial revolution was meant to benefit and improve the lives of the working classes, but it took just a short time for the Americans, gifted with an abundance of raw materials, to take the best advantage of the “Revolution”.
The Chinese did not ask for this last globalisation strategy; it was an American driven vision supported by its western minions. It’s hard to believe that the US was the largest global exporter of GYW and vulcanised footwear at the end of the 19th century and is today the largest importer of such, mainly from China their number one enemy in terms of political philosophies.
This migration of manufacturing did not start with China.
The first beneficiaries of the exporting of footwear, outside of the centuries old colonial low value trading countries, were the Japanese after World War Two. By the end of the 1960s Japanese canvas footwear was beginning to disrupt what was and had been a rather chummy US domestic maker’s club that was eventually forced to break up its organisations by monopoly commissions.
The Japanese at heart culturally are not leather footwear producers, those types of shoes were long produced by Korean emigrants living in the Kobe area of the nation. It did not take long for South Korea to be selected by the American Government with Giant Japanese trading houses to help to relocate exportable shoemaking in the Pusan area of South Korea. Without exception most major retailers encouraged their importing agents to develop more and more product offshore and particularly in the manufacture of basic staples such as athletic shoes, vulcanised canvas and workboots.
Within a decade of great success, Korean makers and their workers were demanding better prices with less aggressive negotiations. Sadly, the American retailing mass market is built on the lowest price, not quality, so before not too long the ‘American Dream’ was transferred to Taiwan as the major manufacturing source.
Then came the allure of the mainland as a source of everything low cost for western export. To this day I have never been able to define why the so called Land of the Free became bed mates with a totalitarian communist nation and willingly allowed the almost total dismantling of domestic production units and necessary infrastructure, in a century where over four major wars have been fought over territory claims.
Whatever the reasons for those decisions to abandon ancient crafts, the West generally has become so dependent upon China and its massive component services that the very thought of having to find alternatives to China, should the nation turn inwards, will set off nightmares of trying to work out who exactly is the alternative.
The Trans Pacific Partnership
The Trans Pacific Partnership in my view was an American devised ‘replacement strategy’ intent to set up alternatives to rising Chinese power and encourage the terms of trading where the Chinese and their Asian neighbours recognise intellectual property rights.
The agreement is also full of worthy humanitarian gestures, but since global trade has existed throughout Asia for centuries and it has always paid only lip service to those aspects of child labour, working conditions and low wages the West deems to stand for, one has to believe the main objective is not humanitarian, but is to strengthen branded and technical patents for the benefit of the already wealthy Western and Asian elites.
Footwear is not a high tech intellectual product. Many athletic brands and luxury goods marketers would love their ad agencies to prove that this was so, but in fact we are an industry that seems to simply reinvent, reposition and reuse old technologies dressed up as new kids on the block.
The last decade has seen an enormous consolidation of brands at the expense of manufacturing ownership. This is particularly evident in the world of occupational and safety footwear.
When it comes to industrial footwear consolidation, sadly we can count the new technologies that have been developed since the second world war on a single pair of hands:
- The development of synthetic rubbers
- The development of PU sole and midsole injection
- The invention of the FUNK process as an alternative GYW application
- The use of Strobel sock lasting as a construction for injected footwear
- Improved fastening devices
- Non-metallic safety toes
- Footbed insoles
- Technical lining laminates
- High frequency welding of seams and upper embossing
- Skeletal moulding
None of these elements are so technical that they cannot be transferred to other non-sino developing nations and that is in effect what is happening now, as China looks inward to its domestic needs.
What I find interesting from my perch above the global industry is that when it comes to replacement sourcing, is who is doing what, to whom, and why?
The mainland Chinese government abetted by its Taiwanese technicians is moving farther afield than the American importers would like. East and West Africa and Bangladesh are now in the Chinese sights for satellite factory compounds and duty free zones. At the same time their corporations are buying up all the strategic materials they can get their hands on ranging from minerals to rubber plantations and hides.
India has a thriving footwear industry, as do Sri Lanka and Pakistan, but none of these countries seem to be on the rush list for the Americans.
Given that war seems to create eventual new resource areas, perhaps a decade from now we may see Afghanistan as a possible source of basic export foot coverings? We do know that some Pakistani technicians are already there.
Closer to the Chinese mainland it is interesting to see South Korean shoe technicians reinventing themselves as factory owners in the old Chinese protectorates such as Vietnam, Cambodia and Myanmar.
Questionably, no one seems interested in the relatively peaceful and quasi democratic nations like Thailand, Malaysia, Indonesia and the Philippines for their shoemaking needs. Perhaps it is the independent qualities of these countries that still form the framework of what makes it onto the checklist of ‘needs’ for a good western import source.
For over 40 years of globalisation it has all been about the search for the lowest denominator based on low wages and an ability to ship goods efficiently and fast. The latest trading agreements, however, pontificate heavily that their major objectives with free trade is to improve the working conditions of the member state inhabitants. A quick observation of the protest rallies in the member nations now taking place would proffer a belief that what was called the quiet masses have now been rallied to the cause of anti-globalism by the rise of Brexit and Amexit.
As I see it globalisation cannot be stopped, but to quote Rodney King: “Can’t we all get along?” What can be done is a re-negotiation of the sharing of employment.
For our global footwear industry I can see a scenario approaching in which materials and finished uppers are outsourced to nations with naturally artisan skills, while the bottoming and finishing of products will more and more return to domestic production, using western high tech moulding facilities. Sure, these domestic factories will not employ a lot of people and inevitably much will be done by robots, but they will be able to carry the political message: Make our country great again.
Computerisation cannot be eliminated either, but again new IT technologies such as 3D printing, robotics and warehouse tracking are as much the strength of the West as they are Asia and again more and more of this production can be balanced out between nations to allow for employment in both areas of the world.
With regards to the animosity towards traditional politicians, my only hope is that George Orwell’s Animal Farm will become compulsory reading for all students, no matter where they are located. In most western nations we are now a divided structure. There is no leadership capable of reuniting both extremes of opinion.
Our mature population still hangs on to all our yesterdays and yearns for the return of the Norman Rockwell lifestyle and white picket fence, while the millennials have less interest in national identity and want to experience a variety of global cultures and a freedom to work anywhere those experiences exist.
Given the tremendous rejection of the status quo in many of our western nations, it does not seem that expansion of free trade will be on the immediate horizon.
Perhaps rampant consumerism as we know it now will dissipate somewhat. After all, even Donald Trump tweeted that perhaps American shoppers should be happy with buying fewer but higher priced goods that are made in America.
It would seem to this writer that if this is so, the impact on product sourcing – no matter their type or gender – will create serious change.
I wonder how many large makers are thinking seriously of domestic production again? I also question how many giant retailers are willingto admit that they went too far overboard in their outsourcing strategies?
It will be interesting to revisit this topic at the end of the year, because currently emotion plays heavily on the hearts of producers and buyers. Only time will tell how China and the new Excited States will coexist.