Over the past two decades, the Pearl River Delta saw perhaps the biggest industrial revolution in world history, supported by cheap and available land and labor. Today, an estimated five per cent of all goods in the world are produced in the PRD region. Energy and labor shortages are becoming very serious, however, threatening manufacturing in the PRD. Chinese media reports claim that in Dongguan, a manufacturing city especially popular with Taiwanese manufacturers, there are 200,000 job vacancies. Some manufacturers complain they are barely able to remain in operation and sometimes have to turn down orders because of a shortage of workers. Many manufacturers have also had to increase salaries and seek ways to improve working conditions in order to keep hold of their staff.

The resource crunch is leading to rising costs in the costal region. The PRD needs to find a new competitive edge, as costs are no longer all that low. For some manufacturers, one option is to relocate further inland to regions with much larger available labor pools. Those who decide to remain in the PRD will face pressure to move up the value chain by developing their own products and brands.

Richard Whitfield, pro-Rector for Organizational Development at Macau Inter-University Institute, says manufacturing in the PRD is evolving.

"There is a subtle trend that has been happening over the last five to ten years. It seems to be accelerating. Historically, most manufacturers based in Hong Kong, Macau and South China have been OEM manufacturers. That means the clients in the US or Europe or wherever would give the company all the designs. All the companies would do is make them cheaper. They have very little involvement in the design of the product."

According to Professor Whitfield, who has been involved in the regional manufacturing industry for the last 14 years, retailers are increasingly coming directly to Hong Kong, Macau and Guangdong to find the manufacturers to design and produce the products for them. That will create a need for new skills such as industrial design as manufacturers get more and more involved in the design process.

"It is much more difficult for a customer to move away from you if you are involved in the design or you have the brand. There is a lot more value in original design and brand."

This is in fact one of the central themes of the "9+2" cooperation initiative, which is plugged as a way to extend economic development to the inner parts of China and to help the greater PRD region move up the value chain. Professor Whitfield believes that the "9+2" cooperation will speed the ascent up the value chain. He also points out new educational courses will be needed to support that ascent.

"If you look around, most [engineering] education in the Delta, Hong Kong, Guangdong and Macau, are largely concerned with the technical. There are quite reasonable engineers. If you look at [industrial] designers, it is much rarer. There are not many places [in the greater PRD region] where you can actually go to learn these skills."

To meet this human resource need, Macau Inter-University in cooperation with Zhongshan University in Guangzhou, is launching a post-graduate industrial design course for practicing engineers. It has already applied to the Macau government to upgrade the course to a full-fledged Master degree.

Underlying the changes is the overwhelming force of globalization. Millions of jobs are migrating to China because Chinese wages are a fraction of those in the west. The migration of work is no longer confined to manual manufacturing jobs, but now also includes more sophisticated jobs, including industrial design. You might wonder if the Aussie professor feels the loss of his countrymen.

"The bottom line is that it is their problem. I think there are some issues. I think increasingly around the world, design is being valued more and more. There are very few people who are good in this area. Definitely, I agree that there is a need for rebalance and readjustment as the world globalizes. Things will be done in different places. Things will migrate to where things will be done more efficiently."