As low cost labor once pulled the shoe industry from Europe to the U.S., low labor cost again pulled the shoe industry from America to Asia.
Almost every Asian country took a piece of the industry, pre-Mao's demise, and found it to be an economically beneficial industry employing a large number of people with varying, generally low, skills.
Once China woke up in the 1970's and 1980's the game changed and no country could beat the Chinese low-cost, high-population advantage in the shoe industry.
Busan's government leaders, I was told, saw the inevitable coming and took decisive action. They were determined not to lose their shoe industry - they would simply accept that manufacturing would be done in China and they would educate their workers on the "higher knowledge" aspects of the industry - design, marketing, prototyping, QA, global trade and distribution, taxation, regulatory expertise and Chinese, etc.This strategy kept large numbers of people employed, while simultaneously developing an array of higher value-added businesses and raised the incomes of the participants who learned new knowledge and skills and who adapted to the new reality.
In the 1980's Busan had over 100 viable shoe manufacturers - today there are less than a dozen. My tour guide through the intricacies of the Asian shoe industry - Miss Hye - had personal experience with the transition. Her family had a shoe plant, which when China awaken was quickly threatened.
Despite her father's best efforts, he was unable to partner with a Chinese manufacturer while diversifying into design and services to replace lost revenue and profit. Clear that he was not going to make the transition in time to save the family business, he liquidated assets in China, sent what money he made home to his wife, son and two daughters and died shortly thereafter.
Hye was just finishing high school at the time and had been accepted at a top Korean Design school. Now unable to afford Design school, Hye worked several jobs, borrowed money from her sister and enrolled in Shoe College - one of two advanced colleges in Korea devoted to every aspect of the shoe industry
Shoe College is a three year, intense program that is rarely found in US universities - a college within a larger university where faculty, staff and industry representatives work side-by-side to prepare students for careers in the shoe industry - the high-value jobs in that industry. The day we visited a Nike exec was lecturing to the students on marketing.
Next Post - Shoe College and Shoe High School
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