I wrote this just yesterday, that what “worked in the 1970’s for a village in India will work very differently for a city in China in the 2020’s”.
And as if to do me a favor, RestofWorld.com came out with a lovely story about Foxconn’s struggle to make iPhones in India. As always, please read the whole thing, but if you’re looking for great examples of why getting markets to work across time and space is difficult, this is a great example.
Lots of great takeaways, beginning with this chart:
But data and charts aside, this article is worth reading for fascinating little snippets on the intersection of culture and labor markets:
- “In India, Apple’s suppliers have to contend with local policymakers, landowners, and labor groups. The country lacks China’s vast network of material and equipment makers, who compete for Apple orders by cutting their own margins. “Apple has been spoiled in China,” a senior manager at an Apple supplier, who was recently deployed from China to India, told Rest of World. “Here, except labor, everything else is expensive.””
- Foxconn has hired women in Tamil Nadu for the most part, and this, it turns out, is how they started off in China as well. Women have, in China, moved now to “less arduous service sector jobs”.
- “Hiring a young, female workforce in India comes with its own requirements — which include reassuring doting parents about the safety of their daughters. The company offers workers free food, lodging, and buses to ensure a safe commute at all hours of the day. On days off, women who live in Foxconn hostels have a 6 p.m. curfew; permission is required to spend the night elsewhere. “[If] they go out and not return by a specific time, their parents would be informed,” a former Foxconn HR manager told Rest of World. “[That’s how] they offer trust to their parents.””
- “Foxconn also had to find a workaround for employing married women. The company typically requires workers to pass through metal detectors when entering and exiting its factories in order to prevent leaks about upcoming products, according to reports. But in India, married women wear a mangalsutra, a metal pendant; and a metti, a metal toe ring. These workers are searched manually and have their jewelry logged in a notebook.”
- “They recounted how a Chinese Foxconn worker became frustrated with a junior Indian technician who repeatedly failed to solve a technical glitch. The Chinese worker fixed it himself and walked away. “He did not teach me,” the translator recalled the Indian worker saying timidly. “How many times should I teach?” the Chinese worker replied.”
- The well documented opposition to the move to twelve hour shifts finds mention here, of course, but what I found particularly interesting was the fact that China has only eight hour shifts. Foxconn relies, the article says, on lax enforcement of the country’s labor law to get around this requirement.
- Indian workers are getting acquainted with the neijuan culture, and the Chinese workers aren’t sure if this is, all things considered, a good thing.
- I’ve met my share of Indians who don’t like to eat food from abroad while traveling, because it is too smelly/exotic/<insert adjective of choice here>. So when I read about Li, a Chinese worker in India being unable to stand the smell of Indian food, and it being “all yellow and mushy stuff”, I couldn’t help but chuckle.
- This is probably my favorite bit from the entire article:
“Both groups have picked up phrases from the other’s language. Sometimes an Indian colleague will greet Li with the common Chinese greeting, “Have you eaten yet?” To which Li will reply in Tamil, “I already ate.””
- The article speaks about workers being able to convince their families to delay their marriages, because these workers are now the main bread-winners for their families… but on the other hand, the workers also mention in the same article their fears about being too old for the company to retain them. The age of the worker in question? 26.
- And finally this anecdote:
“During the first week of October, the national holiday celebrating Mahatma Gandhi’s birthday fell on a Monday and created a rare two-day weekend for Foxconn employees. Li planned to visit the Taj Mahal. He would spend a good deal of the weekend in buses and airplanes, but figured it would be worth it — he wanted to have seen it before his time in India was up. But a few days before he was due to leave, Li had to cancel. Management had announced that the factory needed to stay open to meet targets. Sunday would be a workday.”
reminded me of this one from Studwell’s How Asia Works:
“After the first steel was poured on 9 June 1973, Park Chung Hee declared an annual National Steel Day to go with the annual National Export Day he had inaugurated in 1964. This being Korea, these were working holidays.”
H/T Mihir Mahajan