Auto Parts Manufacturing – France and Korea – Analysis 2

In my previous post, I compared raw material Mean scores for countries that have companies in the top 10 for auto parts manufacturing. I was looking for data that would confirm my initial assumption that countries with a larger share of raw material production would have a greater number of companies in the top 10 for auto parts manufacturing.

After looking at the data, this assumption proved to be incorrect. The USA was the run away winner with Mean score of 4.29. In second place was Japan with 6.71. If my assumption was correct, the USA would have have the greatest percentage auto parts manufacturers in the top 10; however this was not the case.

Putting the USA data aside, France and Korea had high scores of 9.14 and 10. Those nations had very little raw material production but somehow had 1 company each in the top 10.

This had my head spinning – why? why? how?

  • Could it be that France and Korea had engineered trade and found nations to partner with in order to receive the raw materials these companies needed to produce auto parts?
  • Did the French and Korean government have progressive business regulations that allowed for these companies to flourish?
    • If this was the case, wouldn’t or should’t there be more companies that pop up in France/Korea that are in the top 10? Maybe.

I started to think that I should look at top 100 companies and count if there were based in France or Korea. I read somewhere that the initial investment needed to start up an Auto Manufacturing plant was extremely high, perhaps this was also the case for Auto Parts manufacturers acting as roadblock for new firms to startup.

The Ontario Red Tape Challenge makes an assumption that regulation changes deemed modern, outcome-focused and evidence based would reduce business burden, create and grow the economy.

Personally I think the question is flawed, well at least the last part of the question.

Changes to regulation would impact companies that are already operating within Ontario as Auto Parts Manufacturers.

Hypothetically, if I were to think of starting an Auto Parts manufacturing business in Ontario now, I would not zero in on regulations as they are written. If no business similar business exists then I would probably look at all regulation however since there is a viable top 10 in the world Auto Parts manufacturing business operating in Ontario today, I would focus on start-up costs, federal regulation, suppliers of raw materials etc before I delve deeper into existing Provincial regulations. That doesn’t mean I wouldn’t look at Provincial regulations, it just means there is an order of operations when starting a business and looking at Provincial business regulations would be lower on my list of items, speaking as a start up.

Back to the flaw in the question with Red Tape Challenge. The question should have been socialized as follows.

Original:

“Ontario is committed to developing modern, outcome-focused and evidence-based regulations. Tell us how you think we can improve regulations to better support business. By reducing the burden to business while protecting consumers, workers and the environment, Ontario is helping to create the right climate to create jobs and grow the economy.”

Revised:

Ontario is committed to developing modern, outcome-focused and evidence-based regulations. Tell us how you think we can improve regulations to better support business. By reducing the burden to business while protecting consumers, workers and the environment, Ontario is helping to create the right climate to create jobs within matured companies in order to grow the economy. 

Or something like that.

I’m trying to keep things simple but I hope you get my drift. There is a fundamental difference in creating new jobs through regulation changes that would spur new business growth versus supporting and cutting red tape for existing companies.

All that said, I think my revised version of the question is what was meant.

Next post will be about France and Korea – I promise.

 

 

 

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