Apple and outsourcing

In How U.S. Lost Out on iPhone Work, the New York Times today had a bit of an interesting summary of the challenges for the U.S. economy.

Why can’t that work come home? Mr. Obama asked.

Mr. Jobs’s reply was unambiguous. “Those jobs aren’t coming back,” he said, according to another dinner guest.

The president’s question touched upon a central conviction at Apple. It isn’t just that workers are cheaper abroad. Rather, Apple’s executives believe the vast scale of overseas factories as well as the flexibility, diligence and industrial skills of foreign workers have so outpaced their American counterparts that "Made in the U.S.A." is no longer a viable option for most Apple products.

It's not just lower wages (and possibly lax enforcement of labor standards) overseas that are an issue, but also other things like flexibility and the strength of supply chains.

I just don't tend to think the "service economy" is particularly viable for the long term.