Saturday, January 16, 2016

Connecting the dots: how Steve Jobs defined creativity

“No industrialization without steel industry,” Efren L. Danao, The Manila Times, 1st Jan 2016. “Ka Oca’s well-publicized laments took place more than 25 years ago but nothing has been done through all those years.

“Rolly Narciso said that the Department of Trade and Industry under the incumbent administration has included it among the 30 sectoral roadmaps it has developed in the last three years. He added, however, that significant action on these roadmaps may have to await the arrival of the next president.”

How does the above article square with this one? “Government mulls more perks for investors – DTI,” Richmond S. Mercurio, Philippine Star, 11th Jan 2016. “Secretary Adrian Cristobal Jr. said incentivizing certain industries would help ensure the revitalization of the country’s manufacturing sector.”

“The government is looking to provide more incentives for investors through programs focused on certain industries that will sustain the revival of the country’s manufacturing sector.

“Trade and Industry Secretary Adrian Cristobal Jr. said the agency is currently exploring three to five industries in which the government could provide needed boost for further development and growth.”

And here is another article. “Rizal’s prophecies fulfilled,” Oscar P. Lagman, Jr., Business World, 28th Dec 2015. “Rizal . . . wrote: ‘We said, and we repeat it once more, and will always repeat it, all reforms of a palliative nature are not only ineffective but are even harmful when the Government is beset with ills that need radical remedy.’”

Connecting the dots seems obvious, and Jobs would take it as his definition of creativity. Yet given that we are beset with ills that need radical remedy, could it be that we take connecting the dots for granted? And should we consider “reframing how we look at the world and deal with issues”?

“Reframing a problem is essentially to change a point of view. At the [Stanford University] we've had several instances where reframing led to spectacular results . . . Once we are aware of a problem, we tend to plunge ahead in search of a solution, yet we'd do better to first reconsider the question. Reframing problems can lead to better solutions. Mental health professionals also use reframing; it is a powerful therapeutic technique. The basic idea behind reframing is to introduce a change of perspective into your thinking." [Chapter 3, The achievement habit, Bernard Roth, Harper Business, 2015]

In the meantime, while we have yet to prioritize 30, if not 50, industry roadmaps . . . we would turn around and say “Government mulls more perks for investors”? “We have some ideas on what these could be, but we will make that announcement in due time. These are going through the process of consultations . . .”
Is that how we risk opening the flood gates – to political patronage?

For example, people would recall that President Ramos insisted that his cabinet must only endorse recommendations that went through “completed staff work.” In other words, not half-baked?

The bottom line: We need a well-conceived industrialization policy and program, not ad hoc efforts. Where are we? Where do we want to be? How do we get there?

We are nowhere near where we want to be, a developed economy, meaning an industrialized not an oligarchic economy. But we can't break-ground on 30 industries.

Prioritize. Pareto. Nation-building. Not crab mentality.

If we visualized PH as an industrialized economy, what could its characteristics be?

For example: What competitive products are associated with PH; How do we generate the requisite levels of investment to sustain them and from where; What technology gives us competitive advantage and from where; What and how current is the product architecture of each one and does it translate to an innovation platform; What people, competency and development needs do we nurture and how; What supply chain network do we pull together and how; Where or which markets are we a major player and how do we develop them?

Sadly we’re nowhere near that characterization – that is shared in many respects by innovative and competitive enterprises and developed and industrialized economies?

The world is not going to play by our rules nor our timelines! The evidence?

“$599.7 million in foreign portfolio investment withdrawn in 2015,” Dow Jones, Manila Bulletin, 14th Jan 2016. ” Foreign portfolio investments in the Philippines in 2015 showed a net outflow of $599.7 million, nearly double the $310.2-million net outflow posted in 2014, as investors continued to take profit on local stocks and other securities in anticipation of an increase in US interest rates and worries over the prospects for China’s economy, the central bank said Thursday.”

“The disappointing report on Tuesday that Philippine exports had contracted for the eighth month was just another stanza in what seems to be shaping up as an entire symphony of economic pain in a year that is barely two weeks old.” [Ben D. Kritz, How bad can it be (?), The Manila Times, 13th Jan 2016]

Let’s look at another country, Italy. “Mezza: As other peripheral economies take off, Italy’s is just so-so,” The Economist, 9th Jan 2016.

“Traditionally . . . it has been surging exports that have pulled Italy out of recessions. Despite a weak euro, export growth this time has been disappointing. That is due in part to the slowdown in emerging markets and the mediocre performance of German industry, which absorbs more than a sixth of Italy’s exports. But it is also consistent with low competitiveness. On that score, Italy’s performance since the euro crisis has been unimpressive when compared with that of other former porkers.

“So far, the government’s main response has been to insert tax breaks in the budget for 2016, aimed at encouraging corporate investment.

“Luigi Zingales, an Italian economist at Chicago’s Booth business school, notes that slow growth plagued Italy long before the euro crisis. He fears the latest slowdown may show how little the economy has responded to the challenges it faced when it joined the euro and lost the ability to boost exports by devaluing its currency. ‘When I go to a young entrepreneurs’ group in America, I meet young entrepreneurs,’ he says. ‘In Italy, I primarily meet trust-fund kids who are there thanks to their parents, not their accomplishments. We need a change of mentality.’”

In other words, low competitiveness cannot be offset by tax breaks – even those “aimed at encouraging corporate investment.” And in the case of Italy, anecdotally, their young entrepreneurs perhaps need a change in mentality, especially the trust-fund kids. Not really new? There is a body of knowledge that says third-generation enterprises have a good chance of fading away.

But back to PH. Are we between a rock and a hard place?

“Industry group gives Aquino the benefit of the doubt on energy policy,” Ben Kritz, Rough Trade, Manila Times, 11th Jan 2016.

“[An] . . . energy policy [must be] an integral part of an overall policy of industrial development—and the only way that can ever get off the ground, as Aquino has been pointedly told more times than anyone can count, is to lower energy costs. Of course, given that he has only six more months in office, there is probably little hope that he will give the matter any more attention than he plans to direct toward climate change mitigation.”

Translation: We are neither here nor there in our energy policy . . . and neither here nor there in industrial development.

“Our ills we owe to ourselves alone, so let us blame no one . . . while we see our countrymen in private life ashamed within themselves, hear the voice of conscience roar in rebellion and protest, yet in public life keep silence or even echo the words of him who abuses them in order to mock the abused; while we see them wrap themselves up in their egotism and with a forced smile praise the most iniquitous actions, begging with their eyes a portion of the booty—why grant them liberty? With Spain or without Spain they would always be the same, and perhaps worse! Why independence, if the slaves of today will be the tyrants of tomorrow? And that they will be such is not to be doubted, for he who submits to tyranny loves it.” [We are ruled by Rizal’s ‘tyrants of tomorrow,’ Editorial, The Manila Times, 29th Dec 2015]

“As a major component for the education and reorientation of our people, mainstream media – their reporters, writers, photographers, columnists and editors – have an obligation to this country . . .” [Era of documented irrelevance: Mainstream media, critics and protesters, Homobono A. Adaza, The Manila Times, 25th Nov 2015]

“Development [is informed by a people’s] worldview, cognitive capacity, values, moral development, self-identity, spirituality, and leadership . . .” [Frederic Laloux, Reinventing organizations, Nelson Parker, 2014]

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