What China Knows, By Arnold Kling

Process knowledge is hard to measure because it exists mostly in people’s heads and the pattern of their relationships to other technical workers. We tend to refer to these intangibles as know-how, institutional memory, or tacit knowledge. They are embodied by an experienced workforce like Shenzhen’s. There, someone might work at an iPhone plant one year, for a rival phone maker the next, and then start a drone company… Shenzhen is a community of engineering practice where factory owners, skilled engineers, entrepreneurs, investors, and researchers mix with the world’s most experienced workforce at producing high-end electronics.

Dan Wang’s Breakneck warns America about its weaknesses relative to China. An important weakness is the result of outsourcing the manufacturing of smart phones and other electronics. As part of that manufacturing process, Chinese managers and workers acquire the tacit knowledge involved in designing and operating factories. Lacking this knowledge, American workers are at a competitive disadvantage.

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