International competition 5

[RDK]

For some insight into the relative costs of doing business see

http://www.competitivealternatives.com./

This is a comprehensive study done by KPMG on the relative costs of doing business in several countries.

Canada was lowest cost closely followed by Australia. The US was seventh out of 11 industrialized countries.

There is also detailed analysis of 98 selected cities.




Rick Kitson MBA P.Eng

Construction Project Management
From conception to completion

http://www.kitsonengineering.com

 

[funnelguy]

Interesting report. I checked through the precision manufacturing report and had a look at the "study" sponsors. I was suprised to see how well the US faired against other nations. I expected much larger disparities, especially given the "sponsors" of the "report".

Nowhere to be found were any comparisons to India, China or Hong Kong. I didn't see Mexico in there, either.

 

[arunmrao]

Only the industrialized nations were considered for the survey and not the other countries. Hence you miss the complete picture.

However within its limited scope it makes an interesting reading

 

[funnelguy]

Perhaps I was too subtle. I do not consider the referenced "survey" to be a survey. I consider it to be a bought and paid for piece of marketing hype. My opinion.

 

[RDK]

Funnelguy

It sounds like you are accusing KPMG of selling out to the sponsors of a report for no better reason than you do not like the results.

Would you as a professional simply provide back to your client what they wanted to hear or would you as a professional study an issue and let the results tell what they tell?

I have said often that one of the main reasons why US jobs are being outsourced offshore is simple.

US cost of doing business is higher than in other countries.

While I would have liked to see where some of the developing nations ranked, I believe that as far as the study went KPMG would have done a professional and impartial job and reported the results as they found them.

If you don’t like the results then work towards making your country a lower cost place to do business and not simply shoot the messenger.




Rick Kitson MBA P.Eng

Construction Project Management
From conception to completion

http://www.kitsonengineering.com

 

[funnelguy]

I have as much faith in that report as I would in any bought and paid for "study". This is no different than "scientific studies" funded by tobacco companies proving that cigarettes are not addictive and do not cause cancer.

I mean seriously Rick, they even have the "sponsors" listed by level of contribution! Gold sponsor, silver sponsor! Really! You consider this to be an impartial, well documented and scientific study? How about listing some sources for the data sets?

Every state in the US has an economic development authority whose job it is to convince businesses to leave other states. They all "guild the lily". This is no different.

 

[stel8]

For more countries look at:

http://rru.worldbank.org/DoingBusiness/FAQ.aspx

The study is for sale but under "Comparative Data" it is possible to get some info.

 

[RDK]

Funnelguy

A better example of a bought and paid for study would be the CIA study that “proved” weapons of mass destruction in Iraq.

The tobacco studies are actually factually correct. The link between cancer and tobacco is a statistical one. They only prove that there is a strong statistical link between cancer and tobacco use. They do not prove that the cancers are caused by tobacco use. An alternate explanation of the link is that it is a coincidence or that cancer causes tobacco use. (and before I get flamed on this, I do not believe this alternate explanation nor am I advocating it. )

Statistics cannot prove causality. They can only demonstrate that there is a relationship between two factors. The causality must be inferred by the temporal relationship, tobacco use came first therefore it is safe to assume that it is the cause of cancer. That it does not cause cancer in all individuals or is not the only cause of cancer does not invalidate the conclusion that tobacco use causes cancer.

It appears that your only argument of a bias is that the funding for the study was not the high cost countries. An alternative reason would be that the high cost countries knew that they were high cost and declined to participate for that reason.

Do you have any alternate sources of data that refute the conclusions of the study or is this a simple jingoistic reaction?



Rick Kitson MBA P.Eng

Construction Project Management
From conception to completion

http://www.kitsonengineering.com

 

[funnelguy]

Quote, “A better example of a bought and paid for study would be the CIA study that “proved” weapons of mass destruction in Iraq.”

How is Iraq germane to this discussion and why do you bring it up?

Quote, “That it does not cause cancer in all individuals or is not the only cause of cancer does not invalidate the conclusion that tobacco use causes cancer.”

Our Surgeons’ General and the American Lung Association collectively appreciate you conceding this point, I’m sure.

Quote, "It appears that your only argument of a bias is that the funding for the study was not the high cost countries. An alternative reason would be that the high cost countries knew that they were high cost and declined to participate for that reason.”

Not at all. Again, I don’t consider this a “study”. If it walks like a duck and quacks like a duck, it’s a duck. This is a marketing paper ostensibly used to stem the tide of job losses to the countries where there are REAL savings to be had and REAL money to be made for the shareholders. Those countries were not represented. How many new plants has Tyco International built in the “developed” countries. How about John Deere? China, India, Mexico et al represent the new future of economic development and were excluded from this survey. Why? I think the answer is obvious. None of the "sponsor" countries can compete with the developing countries any more than the US can. 15% Savings don't look very good measured against 30-70% savings.

Quote, “Do you have any alternate sources of data that refute the conclusions of the study or is this a simple jingoistic reaction?”

Do you have any comprehensive studies that include data for nations that did not pay for the study? Or is your support of the study simply a jingoistic reaction?

It's been fun.

 

[RDK]

Funnelguy

The example of the Iraq situation had the same validity as your bringing up the tobacco studies. I just thought that it was a better example of a study that “proves” what those who commissioned the study wanted to hear.

If I can follow your logic here, you appear to be advocating that the major flaw in the study is that the study does not include the third world where costs are even lower. That would put the US not only 7th out of 11 countries but also much lower in a bigger sample.

I concede that there are many countries with lower costs of doing business than Canada. These countries however do not have the well-developed safeguards for businesses and individuals nor do they have the well-developed infrastructure of the developed countries.

By comparing countries of similar stages of development both in the social and infrastructure, we can clearly see that the US is not a low cost country for doing business and that explains the loss of US manufacturing jobs.







Rick Kitson MBA P.Eng

Construction Project Management
From conception to completion

http://www.kitsonengineering.com

 

[NanoMan]

While I agree that KPMG's "study" seems to be a self-serving publication benefitting the sponsors, (Big 5 firms do lie... remember that Anderson signed off on Enron's statements), you, Mr/Ms Aresrope are a bit out of line with the closing on your post.

Personal shots weaken your position, not strengthen it.

 

[arunmrao]

How ethical is it to lie in the interest of your business? Very few dare to ask themselves these questions,as a result you have Enron type disasters. WMD report being doctored is an extreme form of jingoism or playing to ploitical bosses. Let these two issues not be mixed. This being apolitical forum we refrain from references to the later kind.

As I knew any response would lead to verbal sparring , I only hinted that the report is selective,thus it is incomplete and ineffective excepting to sponsors of the project.

The credibility of such consultancy firms has seriously eroded especially in our part of the world. The most recent controversy being high levels of pesticide found in Pepsi and coke,but the reports from international labs producing a different report.

 

[Krautso]

Does anyone actually believe that the information in the study isn't accurate?

I agree with RDK, some of you may have your reservations on the scope of the study but the results are quite coherent and open to interpretation.

Infrastructure and social and economic stability as well as environmental controls are certainly all factors when relating the cost of doing business in developed nations. This is a western report for western consumption. I think it is obvious that third world or less developed countries can supply cheap labour forces with relaxed building and environmental standards but to expand the survey to include these countries would force KPMG to expand their criteria immensely to obtain a true cost. This would provide so much information as to make the results virtually meaningless.

Personally, I believe that the study provides a snapshot of the costs of doing business in industrialized nations and is not intended to be taken as all-encompassing. This information may be quite useful to the sponsers of the study as well to look at their current cost (labour, taxes, energy, etc) of operation and how better to compete globally.

And Aresrope, taking a personal shot at RDK does not hide the fact that you obviously have nothing worthwhile to offer to this thread.

 

[jmw]

We should not impute any unproffesional behaviour. We should recognise that many surveys are constructed exactly to match what the client wants. The survey company usually reserve the right to publish the survey or sell it on after a suitable period of time.
I was in the position of commissioning a survey from Frost and Sullivan. The survey asked exactly what i wanted to ask. If i wanted to ask dumb questions and restrict my survey to certain fields, that was my prerogative.
F&S did not attempt to influence the study in any way other than to ensure that the questions I asked, if i had to ask them, where answered effectively. If i asked a question in a way that produced anomalous results they raised this with me and suggested either a better question to ask or how to interpret the results. They did not attempt to influence the nature of the survey.
Proffesional survey companies are good at getting fair results to the questions asked. They are not there to tell you what questions to ask and do not usually undertake surveys of the cuff. They like to have a client and they ask the market what the client wants asked.
In my case, if i had rung a competitor and asked some of the questions i wanted asking i would have been warned off by the DTI. I also would not have received an honest answer. Because it was F&S asking, my competitors thought it was a client vetting them who had commissioned the survey. The answers were more revealing (but differently biased).
So don't let's blame the survey company. It is right, in all such cases, to enquire as to who commissioned the survey. If we don't have sight of the questions asked, how asked and the actual results, we should also be wary of the interpretations. The Survey company will interpret the results based on the nature of the original syurvey objectives, not what we, as independent thid parties want to discover.
If we are concerned about job losses to India, for example, we should commission a survey that asks exactly that question.
Don't shoot the messanger, especially, someonelses.

 

[sacem1]

I would not trust a company (in this case KPMG )that its main bussiness was to advice their customers in "good accounting practices" and deviced so many tax shelters use that right now is under IRS scrutiny for fraud practices and their customers will face huge back charges from these KPMG recommended practices.

SACEM1