In his most recent book ’David and Goliath’ English-Canadian author Malcolm Gladwell conveys a number of examples on how against all odds some people and companies outsmart awesome opponents. The best known example of this being the tale of how the shepherd boy David killed the giant warrior Goliath some 3000 years ago.
Gladwell’s book came to my mind as just the right answer to all those politicians, experts and opinion leaders who for years have been advocating that all manufacturing in the Western World will inevitably move to low-cost countries, primarily in Asia. European companies simply cannot compete with the cost base that Asia offers. Hence, manufacturing is dead in our part of the world. Instead – the mantra goes – Europe needs to find new alternative business opportunities and revenue streams.
But in my opinion all these fine people make the same basic mistake. They automatically assume that only costs define the role of where manufacturing takes place. And of course here Europe will lose. We cannot compete with China or Bangladesh on labour costs. But to base the discussion of manufacturing on costs only is a huge mistake.
Many people make the mistake of putting their money on what seems to be the strongest part. But the very same people will be surprised when they learn how often the weakest part actually wins – simply by changing the game.
CPHmade has changed the game. Our mission is to support and help develop local manufacturing in Copenhagen and we fully acknowledge that in a head-to-head competition on costs we will always loose to Asia. So we play a different game. We try to build and market a completely different story which consumers will buy into.
To be more specific: Unlike an anonymous factory in the China hinterlands CPHmade member manufacturers offer a genuine story of authenticity, local anchoring, passionate craftsmen and quality products which will often outlive its owners. Yes, the products are premium priced, but then again is it expensive when you leave the store with a product that is not only a quality product on a physical dimension, but which is also puts a smile on your face? We think not – and certainly this tale seem to resonate very well with more and more consumers who are growing increasingly tired of mass-produced products.
Coming to back to ‘David and Goliath’ I personally love the story from The Old Testament on how the small boy David beats the giant Goliath in a one-to-one fight. Instead of being depressed about his diminutive physical size, David decides to change the game and fight on his own terms – using his speed, agility and ability to find Goliath’s weakest point. We all know what this meant to Goliath. The giant fell down dead before he even knew what had happened.
We too can win our war – in this case the manufacturing war. The way forward for European manufacturing is to get out of the cost-trap and instead support an alternative tale. In all modesty, I think we have succeeded with this in CPHmade. Craftsmanship, authenticity and passion will beat the Asian Goliath.
Asger Daugbjerg, Partner, CPHmade