World Factory is an extraordinary theatre project that sets out to explore the impact of globalised production (and by extension, globalised trade) by creating an experiential space for its audience. I saw it in Cambridge last week; it has dates scheduled in Brighton and Manchester between now and Christmas, and may return for another run at Cambridge Junction.

For the show, the audience is seated at tables around the space, each a team charged with running a Chinese textiles factory. Once the experiential part of the production starts, the group has to handle a series of problems and dilemma, starting with whether we should handle a cashflow crisis by cutting wages across the board or firing half the staff.

The four cast members double as ‘dealers,’ issuing the cards, keeping track of the money, and exhorting us to work faster or harder. They also delivered the ‘samples’ of the different types of clothing we were ‘making’ in our factory.

Our decisions were recorded by scanning a barcode on the cards, which also meant that the decisions of each table are recorded in real time.

As you play, at speed (my team lost a lot of money early on by failing to make a decison quickly enough) you’re faced with questions about what goods you’re willing or able to make, about your workers, about dealing with local officials, about compliance and standards, about outsourcing production to other parts of China, about demands for labour rights. And so on.

The experiential part of the game is bookended by sequences that animate the recent history of globalisation and the impact of the global trade system–for example, we were told at the end the amount of water and oil consumed in producing the goods we had ‘made’ collectively during the show.

The play is supported by as vast database of research. At the end of the show we were given a print-out, on a till-roll, of all our decisions as factory owners, with a URL linking to the research that sits behind the question that was on each card. For example, one of the decisions we had to make was whether or not to move from regular wages to piecerates. Here’s the research on this decison.

World Factory is also more than a play in that the group behind it, notably the co-directors Zoe Svendsen and Simon Daw, actually went into the business of making a shirt in a Chinese factory as part of the research. A barcode above the pocket reveals the history of its production. It might seem paradoxical that a show that is about over-consumption and over-production should, in effect, have its own merchandising, but perhaps it is a mark of the play’s effectiveness that there seemed to be no-one trying to buy one as we left the theatre.

The project also has an open research process, Digital Quilt, that collects relevant information and data. There’s also an education resource pack.

I’ve read quite a lot about the global production system over the years, and plenty about Chinese factories, though more about the electronics sector than the textile sector. I’ve also sat on the Board of a retailing business, making business decisions in conditions of uncertainty. For me, the surprise of the game (although I shouldn’t have been surprised by this) was the way in which the pace and the relentlessness of it, together with the ambiguity about the possible consequences of many of the decisions, forced you constantly to make choices at speed that reflected the imperative to keep the factory working. Capital has its own logic, as Marx says somewhere, and once in role it is hard to refuse it.

One of the video interviews shown on the screens that surrounded the auditorium was with the owner of the factory that made the World Factory shirt. She had been in debt up to her eyes after her first business folded, to the tune of several hundred thousand RNB. She took a job in a clothes factory that paid 2,000RNB a month, described in the rules of the game as low but enough to live on, so would never have managed to repay her debts, so started another clothes business. As she said, once you have the business, you have to keep going.

The show is also good on the politics, or more accurately the political economy, of the global textile industry. Who knew, for example, that Chinese factories outsource novelty Christmas jumpers to British factories? The quality is low, the margins are thin, and making them close to the end-consumer, with minimal delivery times, allows enough flexibility to respond to fluctuations in demand. They also spelled out the impact of cheap disposal clothes on the countries unlucky enough to get our recycled hand-offs. We think we’re doing people a favour by recycling through charity shops; actually we’re killing off indigenous textiles business in poor countries.

The actor who was also our dealer said that working on the play had changed her attitude towards recycling clothing, from thinking it a good thing to finding it uncomfortable.

One tip if you’re lucky enough to be able to go to see World Factory: decide on your table before you start whether your strategy is going to be about maximising profits or looking after your workers, and then stick to it.

The images are by Andrew Curry, and are published here under a Creative Commons licence.

A few years ago I wrote a set of scenarios – with Joe Ballantyne and Andy Sumner – on the prospects for the world economy to the early 2020s. In one of the scenarios we saw the “West” regenerate itself by a combination of public investment and by bringing home its high value manufacturing. After I’d drafted this post, David Cameron popped up at Davos to promote the idea of “re-shoring”, even if he seems less keen on the notion of public investment. And according to a recent report in The Conversation by some Birmingham University researchers, there are signs that re-shoring is starting to happen, that British businesses are  bringing it back home.

Seven factors

They list seven reasons for this, which I’ve edited slightly from their article:

1. The savings from offshore manufacturing costs were not as great as anticipated. Because labour accounts for a small proportion of a product’s manufacturing costs, wage inflation and escalating shipping erode the savings gained from outsourcing.
2. Offshoring increases the length of product-delivery cycles; speed and closeness to market are becoming significant drivers of success.
3. There have been concerns with the quality of products made in low-cost locations.
4. There have been problems related to the loss of intellectual property.
5. Firms are reluctant to tie up capital in large overseas shipments. Instead they look for local suppliers who are able to supply small batches.
6. Companies are starting to understand the benefits of co-locating design and development with production managers and assembly workers, which enables a close dialogue between design, development and manufacturing.
7. In the 21st century, energy costs will play a much more important role than labour costs in supply chain calculations. Energy costs are involved in the shipping of products from low-cost locations to the UK, and in fabrication.

Energy and shipping

The researchers focus on energy costs as the critical driver for reshoring, and this was the element that we focussed on in our scenario. Although shipping appears to be a low-energy, lower carbon transport mode, it is not, and although containerisation is a neglected subject, we are becoming more aware of its other costs. And while energy efficiency is improving in Asia’s emerging production centres, it is still a long way behind the levels achieved in Europe, north America, and Japan. In the US, it’s also reported that cheaper domestic energy has led to the creation of 80,000 jobs.

But what’s more intersting about this list is the story that it tells about the future of high-value manufacturing and the sources of value in the 21st century economy.

Sources of value

There are three important elements. The first is obvious. As businesses get a better handle on their costs, and start to understand them in a systemic way, they understand the lesson that the Japanese learnt three decades ago – that the costs of poor quality are always under-estimated. The cost of fixing a customer’s problems caused by poor quality is always disproportionately high, and also has knock-on in terms of reputation and so on.

The second is the increasing importance of flexibility, a marker that the age of mass production is coming to an end; it’s being replaced by tailored batch production. In the world, proximity to customers becomes much more important, indeed as it used to be before the age of cheap energy. It’s likely that we’ll look back and see the age of mass production as an exception, as a blip. Of course, you don’t need to re-shore to respond to this: you can also “near-shore”, as Japanese businesses are doing in Mexico, moving production from China to be closer to the American market.

High value knowledge

The third is the role of knowledge on creating high value products, and often knowledge that is contingent, that arises through interaction while solving difficult problems, knowledge that is almost impossible to codify. One of the laziest of futures assumptions is that all future businesses will be uniformly more distributed because ICT makes it easier for people to work at a distance. This will be true of certain functions and certain tasks, but not all, and not all of the time.

But there is a reason why a company such as Google creates high value workplaces that are designed to encourage people to come in to work, to talk to each other, to interact. In the same vein there’s a reason why the economics of clustering – first identifed by Alfred Marshall in a famous passage (“It’s in the air“) still apply in the 21st century.

High value production needs high value knowledge, and high value knowledge needs high value interaction, between people who understand products, processes and markets in multiple overlapping ways.

The image at the top of this post is taken from Levantar’s post on the same subject, and is used with thanks.

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