Wednesday, January 01, 2014

Tesla Motors: $415,000,000 equals 112 jobs

According to SF Gate and other news sources, Tesla Motors is expanding its manufacturing operations in California. The company intends to spend $415M on new equipment, which prompted the state government to give Tesla a $34.7M tax break. The number of permanent jobs created is astonishingly low - 112. That is, to create one permanent job, Tesla has to invest almost $4M into new equipment. By contrast, to add a new software engineering job a startup can invest at least 100 times less — $40K for computer equipment, networking, office space, etc.
No wonder, it's much easier to innovation in the software services domain, than build and equip new factories in the US. With the development of robotics, high-tech manufacturing jobs will become quite rare.

See also my 2010 post regarding Andy Grove's article in the NYT.

tags: trend, economics, innovation

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