Rumor has it that China is a good outsourcing destination when quality, sophistication and complexity are not core, a rumor that circulates also in the software industry.
Nothing could be more inaccurate! Underestimating the capabilities of China to excel is the very last thing we should do in the Western world. China has a long tradition of manufacturing, engineering and craftsmanship.
Let me illustrate this with an example. The city of Prato in Italy has been recognized for centuries as an excellence center for the textile industry. Fashion companies like Gucci, Dolce & Gabbana, Versace, Armani, Prada, etc. are shopping there, since it was a common belief that no places in Italy or abroad could stand the test with the combination of creativity and quality available in Prato.
In the late 80’s, Prato saw a new wave of immigrants coming from China, mostly from Wenzhou, in the province of Zhejiang, known as a textile-manufacturing region. This Chinese community now represents a whopping 15% of the total population of Prato. While 15% might not seem impressive to a San Franciscan, it is an extremely high percentage for a European city.
Local factories were at first delighted to can tap into this pool of hard-working talents, who could deliver according to their quality standards. However, they did not realize that these low-wage workers were also entrepreneurs, many of whom are now CEOs of very successful companies, with operations in both Prato and Wenzhou. These new Italo-Chinese companies have changed the face of Prato.
The major mistake of the Italians was to rest on their laurels. They assumed that providing with the highest level of quality was enough to keep their business successful forever. The local Chinese entrepreneurs dared to blend traditions with modernity. Prato’s rude awakening is a tough lesson to learn for the whole industry.
Talking about Prato on the BBC, Rosie Goldsmith said, â€To succeed the industry must embrace China, restructure, innovate, downsize and outsource – but also stick to Italian quality and craftsmanship. “Made in Italy” but sometimes “Made in Italy by Chinese”.
Let’s face it: what we are witnessing today is the awakening of a giant. We can underestimate or ignore China, as did some factories in Prato, or we can take advantage of this almost unlimited source of opportunities to innovate more, better and faster.
As always, our choice.
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