When President Obama delivers his “State of the Union” address tonight, it’s a sure bet that one word you will hear mentioned often is jobs. There aren’t enough of them to go around in the U.S. And if you are looking for new job growth, the best field to find work is in the technology sector, but for that there’s another word and it isn’t anywhere close to the U.S. The word is Shenzhen.
Located in Southern China, Shenzhen is a booming city (larger in population than New York) that operates as a “special economic zone” with favorable policies and flexible government oversight that has made it extraordinarily attractive to companies who want to manufacture there. This has made it the place where a major number of the consumer technology products we all know and love (think iPhone and go from there) are made.
At this month’s Consumer Electronics Show (CES), when you opened the show guide and scanned the list of exhibitors, the ‘S’ section seemed larger than the rest. That’s because the tech manufacturing companies from Shenzhen, China were by far the largest group in attendance. They numbered well over 200 firms, enough to start a respectable trade show all their own.
In a major story on the flow of tech jobs to China, the New York Times described how when the first iPhone was under development at Apple, Steve Jobs demanded a glass screen that wouldn’t scratch. As the article documents, a top executive left his meeting with Jobs and immediately booked a flight to Shenzhen because “if Mr. Jobs wanted perfect, there was nowhere else to go.”
The rise of Shenzhen as the center of the technology manufacturing world has not been without problems and controversy. In the last year, both Wired Magazine and National Public Radio’s American Life have documented problems of worker suicide, low pay, hazardous conditions, and children as young as 12 working in Shenzhen plants. Just two weeks ago, 4,000 workers at a Sanyo factory in Shenzhen protested over wages and job security.
But the outflow of jobs to this part of China continues at a staggering pace as worldwide demand for smart phones, tablets, and TVs continues to grow. In addition to Apple, products are made for Dell, Nokia, Panasonic, HP, Samsung, Sony, Lenovo, and the list goes on and on. Even big box retailers like Walmart have job openings in Shenzhen as described in a recent employment listing for the company.
Before Jobs passed away last year, he had one final meeting with President Obama who asked him directly when the jobs in China used by Apple to make their wildly popular products would be coming back to the U.S. “Those jobs aren’t coming back,” Jobs reportedly told Obama. That’s one line unlikely to be heard in the President’s speech to Congress and the American people tonight.
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