Developing countries are competing on creativity as well as cost. That will change business everywhere
Apr 15th 2010 | from the print edition
THIRTY years ago the bosses of America’s car industry were shocked to learn that Japan had overtaken America to become the world’s leading car producer. They were even more shocked when they visited Japan to find out what was going on. They found that the secret of Japan’s success did not lie in cheap labour or government subsidies (their preferred explanations) but in what was rapidly dubbed “lean manufacturing”. While Detroit slept, Japan had transformed itself from a low-wage economy into a hotbed of business innovation. Soon every factory around the world was lean—or a ruin.
Management gurus are always glibly proclaiming revolutions. What happened in Japan qualified, as did the advent of mass production in America a century ago. Now something comparable is taking place in the developing world.