Why is China so good at making drones?
Why is China so good at making drones?
Vitamix meets the iPhone
In the 60s and 70s, the manufacture of consumer goods began to move out to Asia. Export-oriented factories sprouted in Japan and later in places like Taiwan, South Korea and Hong Kong.
In the 80s and 90s after mainland China had begun to open up, many of these business owners smelled opportunity and moved their factories across the border. Many chose to re-locate to Shenzhen, across the border from Hong Kong. Over the next two decades, they leveraged the inexpensive, seemingly limitless pool of labor to scale up massively.
These factories started with simpler, easier-to-manufacture consumer products … clothing, plastic toys, watches, small kitchen appliances etc. … before figuring out how to make more complicated stuff … telephones, cellphones, and backup battery systems …
At each stage, small clusters of specialized expertise and component supply chains sprung up around each new product. Often there was overlap in skills and components between different product categories. With each product generation, they gained more skills and as they gained more skills, they moved up up the value chain:
The plastic injection molding machine that could turn out plastic toys could also be used to make housing for small kitchen appliances.
Similar electric motor technology as the one used in the kitchen appliance could be used to spin a disc in a DVD player.
The same audio input/output components in the DVD player could be miniaturized into a cellphone.
The RF expertise you learned making cellphones could be leveraged into manufacturing smartphones.
In the beginning, these factories started out making clothing and simple plastic toys. After toiling away for years and years, one day they looked up and realized they were now manufacturing the most sophisticated consumer electronics products the planet had ever seen.
In Shenzhen, there is a district where you can catch a firsthand glimpse at how all of these specialty components and trade skills are clustered tightly together in one location.
It is called Huaqiangbei (华强北) and it is the largest electronics bazaar in the world.
This district has dozens of buildings like this one below — filled with all sorts and varieties of electronic components and gear.
In each building, there are hundreds of shops and stalls that do both retail and wholesale business. Typically, each shop specializes in just one or a few product categories. For example, I remember there was a shop that just sold USB-powered fans and lights.
These shops are supplied by factories that are also similarly specialized.
You can basically find anything you need to build consumer electronics in Shenzhen and it is all located within a small radius.
Tear apart your phone and you will find a bunch of components, including:
Custom plastic/metal housing
Display unit
Camera unit
Lithium-ion battery
Sensors
CPU, RF/baseband, memory and other specialized chips and electronics on a printed circuit board (PCB)
Now do the same for a kitchen appliance (e.g. a Vitamix) and you will find:
Custom plastic/metal housing
Electric motors and switches
Wires
Some basic control logic and electronics on a PCB
Now smash these two together and voila! … you have most of the key components needed to build a drone.
Engineers working in Shenzhen factories have been smashing things apart and putting them back together for the better part of the past three decades. They can iterate quickly because all of the components and trade skills are concentrated in such a tightly packed space.
They got better by doing … over and over and over again.
There is something called shanzhai (山寨) culture in China. It took on the meaning of “counterfeiting” because in the beginning that is what people were doing. But over time it has taken on a new meaning, one that revolves around the idea of constant tinkering, iterating and experimentation that goes on around the clock in Shenzhen:
The term shanzhai originally referred to cheap copycats of brand products and electronic devices, particularly mobile phones that took the name of ai-phone, Nakia and Samsong, but is now increasingly applied to the entire Open Manufacture system developed in Shenzhen in the last thirty years as an ad-hoc model based on easy and open access to electronic components, ready to produce key solutions ‘open boards’ and a network of relationships and providers …
… the mainstream of shanzhai products are niche products or items offering very specific bespoke features, such as large fonts for old people, cute shapes and designs for kids, multiple SIM cards, solar chargers and other more culturally specific solutions, such as a compass to locate Mecca for daily prayer. Unusual and crazy options can be readily available.
Now many view shanzhai culture in a positive light and as something more philosophical and inspirational. It has converged with the Makers movement, a global community of engineers and hobbyists that look for new and novel ways to use electronics.
Benedict Evans, one of the smartest guys on my Twitter feed, tweeted this about a month ago:
In a nutshell, this answers the question of why China is so good at making drones.
Over the years, Shenzhen has developed critical mass in all of the necessary trades and skills for consumer electronics. Supported by foreign trade as well as an increasingly relevant Chinese middle class, it developed a sophisticated supply chain where all of the major components are concentrated in industrial clusters.
Add in a dose of shanzhai-inspired Maker culture … with all of the constant experimentation and tinkering …
Tinkering to lower cost
Tinkering to create unique customizations (drones in all different shapes and sizes)
Tinkering to fuse different product ideas together (“hey what if we added a camera to this drone?”)
… and you end up with the explosion in creativity and variety that we are seeing today in the consumer electronics sector in China. Drones are only one out of many different examples.
And there will almost certainly be more to come: Smash enough new ideas against the smartphone supply chain and you are bound to eventually stumble across the next great consumer electronics product.
This was originally published on Quora in October 2018.