That’s a favorite line of sales and marketing managers to their troops. And global competitors are well aware of it too! The bottom line: You paddle your own canoe or you sink to oblivion? Can we take a similar posture looking at our dismal economic performance?
We have a well-developed accounting and finance discipline and know that net worth is the net of one’s assets against their liabilities. Thus, while we are proud of our background – from our culture to history to tradition to religion, we have to discount all of them by our shortcomings. For example, our murky economic performance has translated to massive poverty?
Is Congress, in looking at legislating CSR for companies, for instance, again missing the structural problem we face? Is it ‘patronizing’ the poor yet again – i.e., yes, it sounds compassionate but until we fix the fundamentals of our economy, we would constantly be pursuing palliatives and be mired in ‘making-do’?
The fundamental challenge of industry is that they are not globally competitive – we can’t continue with the rhetoric: ‘our banks would encourage credit and support SMEs’! We’re not hitting the nail on the head – credit has to be efficiently and effectively used! Ergo: The starting point is to pursue product development? It’s not enough to celebrate local successes – the bigger market and the bigger returns come from being globally competitive. For example, while a local consumer-goods company should celebrate a doubling of profits, a profitability of less than 10% does not make it capable to compete regionally or globally! Hopefully, local firms are working in that direction?
Competitive products generate pricing flexibility that would raise margins and thus the ability to market competitively beyond our shores. For instance, a gross margin of less than 50% (in the case of consumer-goods companies) does not generate sufficient marketing firepower. Healthy margins are a mandatory to market and distribute and compete regionally or globally. They are fundamental competitive metrics that the Chinese, the Vietnamese and ex-Soviet bloc countries have learned. (While we’d be stuck as a craven, parochial economy if we’d stick to parochial – as opposed to global – yardsticks?)
Our current export levels are insignificant by global standards, and when compared to our neighbors. And while an appreciating peso could be an issue, our lack of competitiveness is the bigger challenge. Yet, commonsense says it presents an opportunity – given that the size our local economy is at par with our neighbors’. How? Local businesses must invest in product development aimed beyond the local market – from market research to product architecture modeling to R&D, and beyond.
Until we invest accordingly, our ability to raise the hurdle for manufacturing would be limited – which is why we have zero confidence in attaining manufacturing competitiveness. If we can spell out new-product parameters (the key to innovation) from such investments, we would be able to correspondingly draw up the specs for the manufacturing technology that we require. And countries like Germany and Japan if not the US would be able to supply us such technology. In short, we don’t have to reinvent everything from the nail to the jet engine – we need to get out of our shell because we’re not an island to ourselves; and tap best practice if not technology so that we could ante up and compete in the global arena. And which our friends from South Korea are encouraging us to do!
Do we really know who we are, what we are and how we are to find our place in the sun? For example, is the administration taking its own sweet time re pending trade agreements? Filipino mañana will ensure that the train leaves us behind for the umpteenth time? Or are we setting our sights and performance standards . . . oh so low? It’s too bad, so sad – for a people proud of their heritage and natural abilities?
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