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Date Posted: 10:18:52 02/17/00 Thu
Author: Anonymous
Subject: Re: (Food for Thought)
In reply to: 's message, "Re: A Method for Solving Problems (Food for Thought)" on 12:09:53 02/16/00 Wed

> COMMENT-Doesn't this mean factories, including sweat
> shop factories as found in Asia? Doesn't it mean
> efficient, cheap transport over flatterrain that PNG
> simply does not possess? Aren't there major, major
> obstacles which have always been present? Hasn't PNG's
> isolation been due in great part to our terrain, and
> doesn't this terrain continue to be a major, major
> obstacle?

Using the cheap labour available in Asia is a way that
American companies cut costs but it isn't what they
usually mean when they talk about adding value. Value
is not the same as price and not the same as cost. Value
is what makes a buyer pay a higher price than what it cost
the seller to make the item. Sweatshop labour is not what
the American buyer sees when buying Nike shoes made in
Vietnam. What they see is fashion, being "cool", or some
other thing that makes them spend $100 or more for a pair
of shoes that probably cost $10 in material, $1 in labour,
and $20 in transportation.

But these are all specifics and the article is suggesting
a general idea of what to do rather than telling exactly
how to do it. The details are what make up the business
plan that you rightly point out is not something that
people in PNG or any other developing country are used to
thinking about.

As for the scale, I think the massive scale the article
refers to is geared to the American audience saying that
they should make all their foreign investment decisions
in this way. Not that America provides all that much
direct aid to PNG anyway. Still, looking at the problem
of how to build a sustainable economy instead of selling
raw materials for export cries out for finding a way to
sell "value added" products. The example of Guatemala
and Starbucks coffee is more like the kinds of things to
do. But real innovation is not just copying the idea
that worked someplace else. It's more like finding the
thing that will work for you to solve your puzzle.

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