Jack Ma, the founder and chairman of China-based Alibaba, raised some eyebrows last week while speaking at the Bloomberg Global Business Forum.
Essentially, his message to those in attendance was that the U.S. should top stop looking at manufacturing as a leading source of job growth and economic stimulus. Instead, Ma urged, more energy and resources should be directed at new technologies like artificial intelligence that can help streamline business operations.
His feelings are that these types of technologies can help stimulate growth in more businesses of varying sizes by helping them make better decisions more cost-effectively, which keeps them globally competitive.
Just as a refresher, Alibaba is basically the Amazon of China, except it’s operating in more than 200 countries, is the first Asian company to exceed the $400 billion valuation mark, and it registers more than $5 billion in annual profits. A quick scoreboard check shows its about 5 times more profitable than Amazon.
The perceived slam on manufacturing jives with Alibaba’s business-to-business sourcing platform strategies. These highly successful purchasing sites don’t focus on where a product is made, but who can provide it more quickly and at the best price.
And while the company pledged to create up to one million new jobs in the U.S. by 2021 – those jobs will be focused on order fulfillment, of products from … ideally China or a another country synonymous with lower-cost manufacturing.
At the end of the day the products bought and sold on Alibaba’s sites have to be made somewhere, and it would seem to benefit a Chinese e-commerce giant if they came from countries that can provide goods at lower costs with better margins for the retailer.