Shock election win.

Shocking to me was that Labor thought they could win on climate policies. Who are they winning over with this? Those that want climate action are going to vote for Greens or Labor regardless.

Why not run with something strong? Something that would actually win voters from the other side.

Anyway…let’s not talk politics today, it’s all over the front pages.

I’d rather talk about my wonderful trip to Japan…

Two weeks back and now I’m starting to have withdrawals.

It was one of the best trips my wife and I had. The culture, the historic landmarks, the fashion…oh, and the bread.

While in Japan, my wife and I saw multiple restaurants where bread, just an ordinary loaf, was the star of the menu. Brick toast they call it, because that’s what it looks like…a brick-shaped loaf of bread.

Most of the ones we saw had melted butter on top. But they can come with a variety of toppings, like this one…

Source: HuffPost

Oh yes, we learnt first-hand the obsession Japan had with toast. So, it doesn’t surprise me at all that Mitsubishi wants to bring out a A$391 toaster which toasts one slice at a time.

Welcome to the future…

You can’t go back to a regular toaster

Rice. Grilled fish. Miso soup.

That’s what breakfast food used to be in Japan. But in 2019, that’s not the case anymore — which my wife and I were delighted about.

Data from NRI Group shows about 51% of Japanese breakfast eaters prefer toast in the morning. Among them is university teacher, Masahiko Shoji.

Cited by Bloomberg, Masahiko says he eats far more bread now than he did before. Especially after buying a Balmuda toaster, which some call ‘The Perfect Toaster’.

Before toasting, water is poured into a slot into the top of the oven before toasting, effectively converting the Balmuda into a mini steam oven, a hack designed to keep what’s being cooked from drying out,’ Wired explains.

Masahiko says he ‘…can’t go back to a regular toaster. He’s also thinking about trying Mitsubishi’s latest contraption (show below).

Source: Bloomberg

Some might tell you this is globalisation at work. The Japanese were eating rice, grilled fish and miso soup for breakfast. But now, because of Western influence, they’re all munching on toast.

Yet I’d argue the opposite. These Japanese toasters are showing you what our world could soon look like. And it’s a world where globalisation is dead. [openx slug=inpost]

Globalisation is heading in reverse

A continuation of globalisation is not all that hard to imagine.

It’s all we’ve known for decades. In the past 20 years, it’s kicked into high gear thanks to booms in trade and communication.

But today, we have a man in the US looking to change that. Trump’s aim, or what he tells us, is to bring back American manufacturing jobs.

He wants more goods to be produced in the US. He wants supply to meet demand. In such a world, trade might be far less than what it is today.

China is also moving towards those ends. They want to become self-sufficient, or maybe even control the markets for aerospace, artificial intelligence and robotics.

When push comes to shove, who wants to rely on trading partners?

Some suggest this move away from globalisation might be what’s causing economies around the world to grow so slowly. Finance Professor, Noah Smith writes:

The global financial crisis seems to have halted and reversed a long-running trend toward more globalisation. From 1993 to 2008, trade became more and more important to the world economy:

This rapid globalisation was the result of confluence of factors — innovations such as containerised shipping and the internet, as well as political developments like the end of the Cold War and a drop in the use of protectionist policies. But the pace of world trade slowed a lot when the economy crashed. In addition to physical globalisation, financial globalisation also has slowed.

Could the slowing of globalisation have something to do with the productivity slowdown? Research gives a number of reasons to think it might.

But slow growth or not, globalisation is heading in reverse. And it would’ve happened sooner or later, whether Trump imposes tariffs on China or not.

Again, just look at Mitsubishi’s Japanese single slice toaster…

Local goods for local tastes

Manufacturing is dying and it’s nobody’s fault. Productivity, thanks to automation and robotics, is taking workers out of factories. These efficiency gains are becoming widespread throughout the global industry.

We could see a level playing field for all. What I mean by that is costs for producing goods in Australia might be as low as they are in China.

So, the question of offshoring manufacturing operations becomes irrelevant. In fact, it would be cheaper to have factories closer to market to reduce transportation costs.

That’s why I said yesterday that the US might have their manufacturing industry back. But long term, they’re getting none of those jobs back, because they’ll all be taken by automation and robotics.

What becomes a point of distinction, and likely profitability for manufacturers in a post-globalised world, is customisation and the ability to tailor goods to a local market.

Now, look at the those Japanese toasters again…

Yeah, the Japanese are eating toast like us, but are you going to go out and buy the $391 Mitsubishi toaster?

Probably not. Why? Because culturally we don’t have the same tastes as the Japanese. A slice of toast is nice. But when was the last time you had a brick of toast covered in melted butter?

For those few that do want the perfect slice of toast and are willing to pay, you’re out of luck. The Mitsubishi toaster, even the Balmuda, are products sold only in Japan and South Korea.

This is the future…

Local manufacturers producing goods for local tastes.

Bye-bye globalisation.

Your friend,

Harje Ronngard