Originally Posted by
Fe 26
Well, cheebs isn't completely wrong about regulation in regards to industry, helping larger industries. That is actually pretty well known and documented. It is covered in just about any level of business education when you start discussing "barriers to entry" in regards to entering a market. "meeting current regulations" is a barrier or entry that must be met.
An example: Electronics. Any electronic device that plugs straight into a wall must meet UL approval before being sold in the US market. The UL approval process cost about 6 to 8 thousand dollars per product. This process must be redone and resubmitted every time you change a component in a design. So if I release an amplifier or video game console that plugs straight into the wall, I have to have at least 6k to get it UL approved. If me or my design team change something in the device that will make it better, while the device is still in production, I have to get the design re-approved. Even if it is just one part. It could be a chip in the output of a console. Or changing one tube to another for an amp. *poof* there goes 6k.
This has proven to be a serious barrier of entry for the music equipment industry. The landscape of music equipment manufactures has changed little in the past 30-40 years. The big American and UK dogs are mostly the same as they were in the 60s/70s. New "big" players are almost 99% foreign companies that got started in their own countries. They got big before they had to deal with our mess. One exception might be Line 6, but they got big by offering their modeling "pods" which are conveniently "wall wart" powered and thus do not need UL approval. On a related note, most of the innovation and new companies in music with home bases in the US and UK develop battery powered devices exclusively because devices that are ran off of low 9 volts DC do not need UL approval. Small DC power devices have zero regulations necessary to be sold on store shelves.
On a related note, this is one reason why we still see so much innovation in web and software based business models. The barriers of entry are relatively small. There are few government regulations and the equipment necessary for production is relatively cheap. I could technically make a website, program or phone application from my house with a 200/300 $ computer. If I wanted to make iPhone aps, I would just need to pay the 100 fee, and apple would do the rest of the work for me. This is insanely cheap compared to traditional manufacturing that requires IP protection, overhead, labor, equipment, storage, shipping, etc. You could drop 100k easy before getting one simple physical product out the door.
Oh, and while I'm talking about it. You can save money on UL by letting china do the UL approval process. If you have some kind of guaranteed work agreement they will do it for about 600$ Just one more way that foreign labor is cheaper than US labor.