The Next Factory of the World: A book review by Bob Morris

The Next Factory of the World: How Chinese Investment Is Reshaping Africa
Irene Yuan Sun
Harvard Business Review Press (October 2017)

How and why each “Factory of the World” becomes a gravitational center within the global marketplace

It is noteworthy that Irene Yuan Sun co-leads McKinsey & Company’s research and client work on Africa-China business and economic development. Moreover, she was born in China and has lived in Africa. Hers are indeed global perspectives that are best indicated by the scope and depth of information, insights, and counsel she provides in her book.

It is difficult for me to wrap my head around the fact that, only 25 years ago, China was poorer than Kenya, Lesotho, and Nigeria. Since then, it has freed millions of people from poverty and now challenges the United States for having the world’s largest economy. How to explain this transformation?

Sun observes that, when factories arrive en masse, prosperity soon follows. “From Great Britain at the dawn of the Industrial Revolution in the eighteen century, to America in the nineteenth century, to Japan and other Asians in the twentieth, factories have restructured entire economies toward a new, lasting level of wealth. That’s because manufacturing, unlike agriculture and services, engages mass labor in highly productive ways to participate in the global economy. It’s also because on the individual level,  industrialization allows subsistence farmers enmeshed in highly local systems of exchange to transform themselves from a poor, backward country into one of the largest economies in the world in less than three decades. By becoming the next Factory of the World, Africa can do the same.”

Meanwhile, since the early-1990s, these are among the products that are no longer manufactured in the United States: Rawlings baseballs, Gerber baby food, Etch-a-sketch, Converse athletic shoes, stainless steel rebar, Mattel toys, minivans, vending machines, Levi jeans, Radio Flyer’s red wagon, television sets, cell phones, major railroad parts, canned sardines, and incandescent light bulbs. Indeed, according to The American Prospect magazine, the United States has lost about 50,000 factories since 2001.

Sun points out that the current Factory of the World, China, is the first developing country to assume such a global leadership position in the world.” It took the lead in launching the $100-billion Asian Infrastructure investment Bank and the $40-billion Silk Road Fund and joined Brazil, Russia, India, and South Africa, to launch 100-billion New Development Bank. Now that is worth tweeting about!

If and when Africa becomes the next Factory of the World, its development will also have happened “in factories and shops, in run-down government offices and on unwieldy pieces of industrial machinery, in the machinations of men trying to start their own businesses and the spirit of women going to work for the first time. True development is a micro process, not a macro one…It is not about grand ideas and dogma but, rather, about incremental change and creativity under trying circumstances.”

I am deeply grateful to Irene Yuan Sun for helping me to gain a much better understanding of forces, factors, issues, perils, and opportunities associated with the relationship of the current Factory of the World, China, to the development of what “might very well become the next Factory of the World,” Africa. I am also eager to share her thoughts about the possible (if not probable) role that the United States will play during that transition.

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1 Comment

  1. Philip Kotler on January 9, 2018 at 7:09 am

    I am pleased to hear about this book and its thesis that Africa will be the next factory of the world. I have been saying this for twenty years in my lectures abroad. Now we have a scholarly treatment that makes a formidable case that we must turn our attention to Africa and its destiny.

    Philip Kotler, Kellogg School of Management

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