Pressure on Chinese Electronics Factories Forces Policy Reform

   on February 21 2012 3:04 PM

The demand for mobile devices has been tremendous in both developed and emerging markets. The penetration rate of smartphones in the US and UK is 31% and 30%, respectively, with those numbers spiking in specific countries around the world, like Singapore, for example, whose penetration rate is 63%. Coupling high spikes like the Singapore number with the steady growth in smartphone use around the world, it is clear that mobile is increasingly important. This potential touches many sectors, most notably mobile commerce, mobile search, and mobile social networking.

Search engine optimization (SEO) practices can be leveraged to achieve goals in each of these categories and thus, as more mobile internet use occurs, the SEO community is directly impacted. This increasing demand for mobile products and the steady sale of other electronics has undoubtedly put pressure on the manufacturers to keep their output up in order to deliver on the sizeable orders put in by various companies like Apple.

Chinese company Foxconn Technology is an example of such a producer. Standing as one of the world's biggest electronics manufacturers, Foxconn assembles roughly 40% of all computers, smartphones, and other electronic devices sold throughout the world. According to the New York Times, most electronics companies have a connection to the large-scale manufacturer whose output is enough to make them China's biggest exporter. 

Through all this, however, Foxconn has come under increasing fire and protest for its factory practices regarding working conditions, hours, and wages. Workers completed high-hour days, often of 14 hours for six or seven days a week for modest pay. Pressure from the electronics companies who pay Foxconn for manufacturing as well as pressure from concerned Western customers and the workers themselves accumulated over time and have forced Foxconn to make significant reforms. They are raising salaries and reducing overtime among other changes, and in the process evolving the industry standard.

Such concessions to worker demands coupled with a significant labor shortage on the coasts where much of the manufacturing occurs has proven a catalyst for a potential shift in the Chinese economy. No longer are migrants coming to the coasts for manufacturing jobs in the numbers they once were. Now the workers that are in fact toiling in the factories have more power and it is up to the companies like Foxconn to remain viable during this time of dynamic change. This is important for the company doing business in China as well as the SEO company or other internet marketing firm that is directly impacted by the products that are produced in such facilities.     

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