Ardevora's Lang: Why automation has forever changed global trade

The rise of semiconductors

Global trade has historically been driven by cheap labour and low-cost manufacturing. However, cheap labour has typically been found a long way from where most consumers have resided, resulting in a trade-off between manufacturing and delivery costs.

The rise of machines and automation is changing this. The location of the manufacturing plant is becoming less important. The relative cost advantage will become more about how cheap it is to actually get it to the customer. For a long period of time corporates have looked around the world - mainly in emerging markets - for the lowest-cost manufacturing. Ardevora's Lang: The global value traps that could trip up investors However, companies can now buy the machinery and put it down wherever makes more sense to reach its customers. In addition to this, the machinery needed to ...