“Question the unquestionable.”

Why? Because humankind falls into the trap of the “status quo bias.” On the other hand, those who nourish the “Innovator’s DNA” get “a kick out of screwing up the status quo.” And in the process, they cultivate their innovation skillset.

Recall “The Innovator’s DNA by Jeffrey H. Dyer, Hal Gregersen, and Clayton M. Christensen; Harvard Business Review, December 2009.”

And why the blog argues that we have zero chance to undo our instincts, i.e., we can’t seem to overcome the status quo bias. We are parochial and insular. We value hierarchy and paternalism that we rely on political patronage and oligarchy that ours is a culture of impunity.

And Rizal was not surprised at all. He who submits to tyranny loves it. And demonstrated how immovable we are through the character of Padre Damaso – and challenged us, “Why independence if the slaves of today will be the tyrants of tomorrow?”

Ergo: We – the Philippine elite – are the present-day Padre Damaso.

Padre Damaso represents not only tribalism but theocracy as well. And why the blog reminds us of how Christ took the scribes and Pharisees “to task” – like a true radical – and risked his own life.

In other words, how can we claim “holier-than-thou” when ours is a culture of impunity? Not a surprise, if we recall Fr. Bulatao’s “split-level Christianity.”

We gave Duterte a 91 percent approval rating despite the free world condemning our war on drugs. Yes, it is ours now because we de facto embraced it when we screamed, “Sovereignty!”

Do we wonder why beyond the Vatican, we are the only other place where divorce is not allowed? Why? Because heaven is ours and ours alone, while the rest of the world is hell-bound? Does it sound like Padre Damaso? But we forget – as Fr. George Gorospe and Fr. Bulatao pointed out – our hypocrisy, i.e., the querida system.

Let’s digress and see what’s happening in the case of the US. They can’t be perfect given “perfection” is not of this world. And they, too, suffer from tribalism and theocracy. But it is not foreign terrorism that is the biggest challenge to the authorities. It is domestic terrorism, as in white supremacy.

“The US divorce rate began falling in the early 1990s and has since continued on an overall downward trend. In 1992, there were 4.8 divorces per 1,000 population. By 2016, this had dropped to 3.2.”  [Statista]

“The CDC and the Guttmacher Institute agree on the following trends: Following the Roe v. Wade decision in 1973, which legalized abortion in all 50 states, the US abortion rate rose quickly, peaking in 1980 or 1981. After that, the abortion rate fell considerably more rapidly in Democratic administrations than in Republican ones. It has not fallen every single year, but it has not risen two years in a row since 1979 and 1980. The abortion rate fell below the 1973 rate in 2011 or 2012, and continued to fall through 2017.”

Then think of Mary Magdalene and the other sinners Christ embraced. Instead, he preached the Two Great Commandments. As Franciscan theologians would explain, Christ’s focus was on “public virtue” – or the common good, in today’s lingo.

Why? Because of the Creator’s unconditional love. It does not come from humankind’s good heart – or piousness.

Of course, theocracy meant that Christ had to die on the cross. Theocracy is not limited to the Ayatollah or al-Qaeda.

“In the eleventh century, a vast Christian army, summoned to holy war by the Pope, rampaged through the Muslim world of the eastern Mediterranean, seizing possession of Jerusalem, a city revered by both faiths. Over the two hundred years that followed this First Crusade, Islam and the West fought for dominion of the Holy Land, clashing in a succession of chillingly brutal wars, both firm in the belief that they were at God’s work.” [The Crusades: The War for the Holy Land  by Thomas Asbridge; Simon & Schuster, 2010]

Let’s get back to sovereignty that we can justify and rationalize our hypocrisy. It explains our instincts: see above.

The blog is eleven and going on twelve (years). The one question it continually poses is: How come Lee and Mahathir convinced Deng “to beg for Western money and technology to lift China’s people from poverty?” And here we are, still with the most restrictive economic provisions in the Constitution?

And who are laughing their way to the bank — our eight top companies combined that can’t match Samsung Vietnam’s revenues? To add insult to injury, we have to borrow hundreds of millions (dollars) to keep the 4Ps going.

And that is how we define and celebrate “inclusive” — aka paternalism. Or the status quo bias. 

And proudly proclaim our war on poverty. Is there a doctor in the house? Doctors live by the norms of cause-and-effect, while we’re stuck at the dualistic level, i.e., it seems beyond us that a structural problem is Greek to us. In other words, how could we assume that OFW remittances and the BPOs can drive the Philippine economy to glory? Industrialize. Industrialize. Industrialize.

But that’s not the only manifestation of our parochialism and insularity. We kicked out the US military because we wanted complete independence from the Americans. Yet, both Lee and Mahathir purposely invited their once colonial masters because they needed their money and technology. And we remain status-quo bound.

But we have a reason. The colonizers, especially the Americans, exploited us. And so, we would instead run to China? Have we asked ourselves why Vietnam embraced the Americans instead of China? Or why is the writer – representing USAID – even offered citizenship in Eastern Europe when these people lived through the Cold War?

Two things we are forgetting. Think of the Crusades. And then think of Rizal’s admonition against tyranny. Between a democratic system and that of autocratic rule, how should we regard China?

But they are paternalistic, and the Americans are not? What do we forget this time? Paternalism is the antithesis of democracy. That’s why the blog pointed out the parallels between Christianity – which we like to profess proudly – and democracy.

The latter demands self-government and personal responsibility to pursue the common good.

And as far as the Church is concerned, we are the Church, not the hierarchy. And that is why Pope Francis chose to camp out in the Vatican’s dormitory and not the papal residence. And instead of the common good, we are commanded to love our neighbors.

Let’s push the envelope. Recall the parable of the talents. Don’t we associate it with free enterprise? Recall the word “associating” from the “Innovator's DNA.” We must put to “good” use our God-given talents and resources. Otherwise, we can’t respond to the common good. Indeed, it takes creativity and innovation to reap the fruits of democracy and free enterprise. There is no free lunch.

And the Jesuits knew it from St. Ignatius, and here’s the layman’s version: God helps those who help themselves. In comparison, our elders interpreted it through the character of Juan Tamad. Of course, it has a converse, Take the name of the Lord thy God in vain.

The Franciscans go further: Humankind is a co-creator in the story of creation – being made in the image and likeness of the Creator – to stress its dynamism. And we did not disappoint and employed and turned nature’s elements into countless things for humankind to thrive in this universe.

And that brings us to our GDP per person, i.e., it is at a third-world or poverty level. Why? Because we did not employ our talents and resources accordingly.

For example, we like to talk about climate change, yet how many Filipinos have died from rampaging floods because we have denuded our forests? But we are so mismanaged that we are still far from solving this problem despite the budget for reforestation.

On the other hand, the blog discussed Sweden’s thriving forest-based industry – i.e., perpetual –  a few times to demonstrate why we must move up beyond the dualistic level – either/or – in human development. Harvesting forest resources does not mean denuding our forests.

Think of our series of – and never-ending failings – yet we never “questioned the unquestionable.”

For example, we in the chattering classes are raising hell because we mismanaged the pandemic. But we have mismanaged this nation for decades. What else is new?

And we are complicit in this mismanagement.

Read our media and how much we heap praises on ourselves, the Philippine elite. We scratch each other’s back “to preserve and protect hierarchy and sovereignty.” Because in return, we get the paternalism we crave. See above; who are laughing their way to the bank.

Recognition is not wrong; it is positive because it encourages performance. However, “Learning and innovation go hand in hand. The arrogance of success is to think that what you did yesterday will be sufficient for tomorrow.” [William Pollard, 1911-1989, physicist-priest, Manhattan Project]

We won’t be able to step up to the plate and face our challenges squarely because our instincts put such heavy blinders that we lost the ability to look outward and forward. Beg for foreign money and technology. And Vietnam did – and became the latest neighbor to leave us in the dust.

Let’s hold it right there and speak to those heavy blinders. 

Consider: Rizal demonstrated through Padre Damaso that we equate hierarchy with authority and perfection. And that robbed us of the ability to look outward and forward. In short, creative thinking. Let’s not lose sleep over that. Instead, let’s recall George, Fr. George Gorospe, and his treatise on “reality” – and the Filipinos’ inability to problem-solve.

Those who have done experiments know what benchmarks are. For example, the whole world recognized the Asian Tigers as the benchmark for economic miracles. Unsurprisingly, Vietnam modeled its economy after the Asian Tigers.

Benchmarking is not our perspective of hierarchy and authority and perfection. A benchmark isn’t necessarily perfect, nor is a vaccine. Those taking cholesterol pills know their doctors monitor their liver function.

But to thrive in this universe, we look for benchmarks and models. But parochialism and insularity robbed us of that instinct. For example, to succeed in the free market environment, we must seek “benchmarks” and models.

But the free market is merely a subset of a more extensive set. Beyond local and global markets are even greater sets or models. Recall the photosynthesis phenomenon — nature’s model of an ecosystem, explain how living things thrive — and the story of creation. See above; humankind is a co-creator in the story of creation.

Let’s bring it further down to earth. The benchmark for democracy and free enterprise is the US. It doesn’t mean they are perfect. See above; how should we regard China.

On the other hand, the benchmark for economic development zones is the Pearl River Delta. Recall why our idea for Clark is already obsolete even before we start. Pearl River Delta is now on its 2.0 generation or iteration.

Translation: Don’t we laugh at ourselves when we fall for “pwede na ‘yan”? What about internalizing what it means and recognizing the price we pay — as in endemic poverty being the regional laggard — doing otherwise? See above; there are more significant sets and models to test our ability to thrive in this universe.

And why did the blog speak to the writer’s experience supervising the pharma unit of his old MNC-company? It’s the “B” word, again.

It is the only consumer packaged brand that reached almost 70 percent of global households. None has come close yet. But then again, this universe is dynamic. And why the writer is exploring tools and “tricks of the trade” coming down the pike with a 27-year-old.

Yet, what inspired the blog was not the writer’s old MNC-company but his Eastern European friends. That people can be born and raised socialists under Soviet rule yet embrace democracy and free enterprise. If that’s the macro challenge, they had a micro one too: To be an MSME and a losing proposition for eight years and recognized by the EU Competition Commission as a model enterprise.

Unsurprisingly, their town created an economic development zone – being a mere hundred kilometers from their port in the Black Sea – that attracted Western companies. What the wife saw as a god-forsaken place – that she questioned the writer’s acceptance to come as a volunteer – now makes her marvel and proud.

Because the future is now present – in AI and robotics – she could not imagine they can be an MNC, not based in the West. 

They would outperform the largest Western competition brand that the latter had to sell the brand. And these friends rejected the opportunity to buy it because, as the writer advised, they had developed a better product.

What is the moral of the story? Question the unquestionable.

And the bottom line for us Filipinos? “Doing the same thing over again” makes us the poster child of Einstein’s insanity definition. And yet, we in the elite class can’t shake off our hubris.

Gising bayan!

[It’s a New Year, and we’re also commemorating Rizal.

The blog is going into its twelfth year, but it won’t cease to hope that one day, sooner than later, that we Filipinos will have our epiphany.

The family joins the writer in wishing one and all a truly Kinder and More Generous New Year!]

“That’s not how we do it.”

On the other hand, we mix apples and oranges because that’s how we do it.

And that is easy to explain given our instincts: We are parochial and insular. We value hierarchy and paternalism that we rely on political patronage and oligarchy that ours is a culture of impunity.

In other words, there is a reason why poverty is our be-all and end-all. What are we missing? “Render unto Caesar the things which are Caesar’s, and unto God the things that are God’s.”

Recall the blog discussed the parallels between Christianity and democracy and free enterprise. Indeed, “Blessed are the poor in spirit, for theirs is the kingdom of heaven.”

But we are mixing apples and oranges when we can’t distinguish cause and effect, i.e., poverty in the Philippines is the effect of underdevelopment. And we prefer to minimize our mismanagement of the country and highlight the shortcomings of capitalism.

Do we want to pass the buck? Consider: Communist China embraced capitalism, while the Soviet empire, once socialism’s model, went kaput.

Let’s establish the predicate. Indeed, we mismanaged this country, i.e., we are the regional laggard, left behind even by once impoverished Vietnam.

If we can internalize what democracy is, it demands self-government and personal responsibility to pursue the common good. And that is where human development comes in. We have to move up beyond the dualistic level – as our neighbors have done. [Better yet, as Christ demonstrated to the scribes and Pharisees.]

“Beg for Western money and technology,” advised Lee and Mahathir to Deng.

And where are we today compared to our neighbors? They have put poverty behind them, including Vietnam.

Consider these articles: (a) World Bank approves a $600-million loan for PHL 4Ps program, and (b) World Bank Approves US$500 Million to Help Mitigate Impact of COVID-19 Pandemic.

Do we have any chance to undo our instincts?

Consider the private sector view: “The habits of Steve Jobs, Jeff Bezos, and other innovative CEOs reveal much about the underpinnings of their creative thinking. Research shows that five discovery skills distinguish the most innovative entrepreneurs from other executives.” [The Innovator’s DNA by Jeffrey H. Dyer, Hal Gregersen, and Clayton M. Christensen, Harvard Business Review, December 2009]

Why is innovation not our cup of tea? If we can’t undo our instincts, we have zero chance.

So, let’s continue with “The Innovator’s DNA. We studied 25 innovative entrepreneurs’ habits and surveyed more than 3,000 executives and 500 individuals who had started innovative companies or invented new products.

“We were intrigued to learn that at most companies, top executives do not feel personally responsible for coming up with strategic innovations. Instead, they feel responsible for facilitating the innovation process.

“In stark contrast, senior executives of the most innovative companies—a mere 15% in our study—don’t delegate creative work. They do it themselves.

“But how do they do it? Our research led us to identify five ‘discovery skills’ that distinguish the most creative executives: (1) Associating, (2) Questioning, (3) Observing, (4) Experimenting, and (5) Networking.

“We found that innovative entrepreneurs (who are also CEOs) spend 50% more time on these discovery activities than do CEOs with no track record for innovation. Together, these skills make up what we call the innovator’s DNA. And the good news is, if you’re not born with it, you can cultivate it.”

[Isn’t that similar to what Bill Gates said about the growth mindset versus the fixed mindset? We can be innovators too. We don’t have to run away every time the blog references innovation.]

“In thinking about how these skills work together, we’ve found it useful to apply the metaphor of DNA. Associating is like the backbone structure of DNA’s double helix; four patterns of action (Questioning, Observing, Experimenting, and Networking) wind around this backbone, cultivating new insights. And just as each person’s physical DNA is unique, each individual we studied had a ‘unique’ innovator’s DNA for generating breakthrough business ideas.

“Imagine that you have an identical twin, endowed with the same brains and natural talents that you have. You’re both given one week to come up with a creative new business-venture idea. During that week, you come up with ‘ideas’ alone in your room.

“In contrast, your twin (1) talks with ten people—including an engineer, a musician, a stay-at-home dad, and a designer—about the venture, (2) visits three innovative start-ups to observe what they do, (3) samples five ‘new to the market’ products, (4) he shows a prototype he’d built to five people, and (5) asks the questions ‘What if I tried this?’ and ‘Why do you do that?’ at least ten times each day during this Networking, Observing and Experimenting activities.

“Studies of identical twins separated at birth indicate that our ability to think creatively comes one-third from genetics. Two-thirds of the innovation skillset comes through learning—first understanding a given skill, then practicing it, experimenting, and ultimately gaining confidence in one’s capacity to create.

“Associating. The ability to successfully connect seemingly unrelated questions, problems, or ideas from different fields, are central to the innovator's DNA.

[Recall the postings on the photosynthesis phenomenon; it is how the writer introduced his Eastern European friends to the imperative of creating an “ecosystem” as the platform for their business model to succeed against Western giants in the industry. And from several postings, recall how the writer relates the universe’s dynamism to the story of creation. Compare that to the Philippine reliance on the OFW phenomenon and BPO industry while bragging about our fast-growing economy. It explains why we can’t wrap our heads around the reality that we have a structural problem that won’t go away until we commit to traverse poverty to prosperity.]

“Entrepreneur Frans Johansson described this phenomenon as the ‘Medici effect,’ referring to the creative explosion in Florence when the Medici family brought together people from a wide range of disciplines—sculptors, scientists, poets, philosophers, painters, and architects.

[But that era is too ancient to be relevant to Juan de la Cruz. Recall the postings on the Pearl River Delta Economic Development Zone. It must be the benchmark. The DA and BCDA are creating an agro-industrial development zone in Clark. That is a step in the right direction, yet it still falls short benchmark-wise. Our goal is to move up to an industrialized economy. Beyond these two agencies, we need the DTI and the PEZA to be in the forward-thinking exercise. The Pearl River Delta is now on its 2.0 generation or iteration. In other words, our idea for Clark is already obsolete even before we start.]

“As these individuals connected, new ideas blossomed at the intersections of their respective fields, thereby spawning the Renaissance, one of the most inventive eras in history.

“Questioning. More than 50 years ago, Peter Drucker described the power of provocative questions. ‘The important and difficult job is never to find the right answers; it is to find the right question,’ he wrote.

“Innovators constantly ask questions that challenge common wisdom or, as Tata Group chairman Ratan Tata puts it, ‘question the unquestionable.’ Meg Whitman, the former CEO of eBay, has worked directly with several innovative entrepreneurs beyond eBay’s founder, including PayPal and Skype.

‘They get a kick out of screwing up the status quo,’ she told us. ‘They can’t bear it. So, they spend a tremendous amount of time thinking about how to change the world. And as they brainstorm, they like to ask: ‘If we did this, what would happen?’

“Observing. Discovery-driven executives produce uncommon business ideas by scrutinizing common phenomena, particularly the behavior of potential customers. In observing others, they act like anthropologists and social scientists.

“Innovators carefully, intentionally, and consistently look out for small behavioral details—in the activities of customers, suppliers, and other companies—to gain insights about new ways of doing things.

“Experimenting. When we think of experiments, we think of scientists in white coats or great inventors like Thomas Edison. Like scientists, innovative entrepreneurs actively try out new ideas by creating prototypes and launching pilots. (As Edison said, ‘I haven’t failed. I’ve found 10,000 ways that do not work.’)

“The world is their laboratory. Unlike observers, who intensely watch the world, experimenters construct interactive experiences and provoke unorthodox responses to see what insights emerge.

[Recall the posting that the writer supervised the pharma unit of his MNC-company. At the time, the three major players in a particular product category were racing to develop the next generation product offering. The more prominent consumer technology center, which had a thousand scientists, was not the one that came out with the discovery. But a small private R&D lab ran by two Ivy professor-scientists and was part of the pharma unit’s network. It’s akin to Pfizer coming out first with the vaccine for Covid-19 in partnership with two scientists. When the pharma unit’s CEO relayed it to the writer, the words that came out of his lips were, “What are we waiting for?”]

“The electronic reader – Kindle – is an experiment that is now transforming Amazon from an online retailer to an innovative electronics manufacturer. Bezos sees experimentation as so critical to innovation that he has institutionalized it at Amazon. ‘I encourage our employees to go down blind alleys and experiment,’ Bezos says. ‘If we can get processes decentralized so that we can do many experiments without it being very costly, we’ll get a lot more innovation.’

“One of the most potent experiments innovators can engage in is living and working overseas. Our research revealed that the more countries a person has lived in, the more likely they are to leverage that experience to deliver innovative products, processes, or businesses.

“Networking. Devoting time and energy to finding and testing ideas through a network of diverse individuals gives innovators a radically different perspective. Unlike most executives—who network to access resources, sell themselves or their companies, or boost their careers—innovative entrepreneurs go out of their way to meet people with different ideas and perspectives to extend their knowledge domains.

“To this end, they make a conscious effort to visit other countries and meet people from different walks of life.

“Put a Ding in the Universe. Why do innovators question, observe, experiment, and network more than typical executives? As we examined what motivates them, we discovered two common themes: (1) They actively desire to change the status quo, and (2) they regularly take risks to make that change happen.

“Throughout our research, we were struck by the consistency of language that innovators use to describe their motives. For example, Jeff Bezos wants to ‘make history,’ Steve Jobs to ‘put a ding in the universe,’ Skype cofounder Niklas Zennström to ‘be disruptive, but in the cause of making the world a better place.’

“These innovators steer entirely clear of a common cognitive bias called the status quo bias—the tendency to prefer an existing state of affairs to alternative ones.

“Embracing a mission for change makes it much easier to take risks and make mistakes. Most of the innovative entrepreneurs we studied, mistakes are nothing to be ashamed of; they are a cost of doing business.

‘If the people running Amazon.com don’t make some significant mistakes,’ explained Bezos, ‘then we won’t be doing a good job for our shareholders because we won’t be swinging for the fences.’ In short, innovators rely on their ‘courage to innovate’—an active bias against the status quo and an unflinching willingness to take risks—to transform ideas into powerful impact.

“Practice, Practice, Practice. As innovators actively engage in the discovery skills, they become defined by them. They grow increasingly confident of their creative abilities.

“Though ‘innovative thinking’ may be innate to some, it can also be developed and strengthened through practice. We cannot emphasize enough the importance of rehearsing over and over the behaviors described above, to the point that they become automatic. That requires putting aside time for you and your team to cultivate more creative ideas actively.

“The most important skill to practice is questioning. Asking ‘Why’ and ‘Why not’ can help turbocharge the other discovery skills.

“Ask questions that both impose and eliminate constraints; this will help you see a problem or opportunity from a different angle. Try spending 15 to 30 minutes each day writing down ten new questions that challenge your company or industry’s status quo.

“To sharpen your observational skills, watch how certain customers experience a product or service in their natural environment. Spend an entire day carefully observing the ‘jobs’ that customers are trying to get done.

“Try not to make judgments about what you see: Pretend you’re a fly on the wall and observe as neutrally as possible. ‘What’s different than you expected?’

“To strengthen experimentation, at both the individual and organizational levels, consciously approach work and life with a hypothesis-testing mindset.

“Attend seminars or executive education courses on topics outside your area of expertise; take apart a product or process that interests you; read books that purport to identify emerging trends. When you travel, don’t squander the opportunity to learn about different lifestyles and local behavior.

“Develop new hypotheses from the knowledge you’ve acquired and test them in the search for new products or processes. Find ways to institutionalize frequent, small experiments at all levels of the organization. Openly acknowledging that learning through failure is valuable goes a long way toward building an innovative culture.

“Try spending 15 to 30 minutes each day writing down questions that challenge the status quo in your company.

“To improve your networking skills, contact the five most creative people you know and ask them to share what they do to stimulate creative thinking. You might also ask if they’d be willing to act as your creative mentors. We suggest holding regular idea lunches at which you meet a few new people from diverse functions, companies, industries, or countries. Get them to tell you about their innovative ideas and ask for feedback on yours.

“Innovative entrepreneurship is not a genetic predisposition; it is an active endeavor. Apple’s slogan, ‘Think Different,’ is inspiring but incomplete. We found that innovators must consistently act differently to think differently. By understanding, reinforcing, and modeling the innovator’s DNA, companies can find ways to develop the creative spark in everyone more successfully.”

Let’s recap. Many times, the writer would stress that he is a practitioner, not an academic. And when he guided a Ph.D. candidate in developing her dissertation, it was conditioned on her promise to utilize the output for some real-world initiative. And her response: I will employ it to enhance my career. I am managing a global brand in a tiny country. I want to do this in a more significant setting, the region, and then the world. And she does not disappoint.

Practice makes perfect. 

That also explains why he expounded principles, not hard-and-fast rules, since he met his Eastern European friends.

Practice. Practice. Practice.

But in the Philippines, we are the elite class. We don’t practice; we preach.

Because we are parochial and insular, we value hierarchy and paternalism that we rely on political patronage and oligarchy that ours is a culture of impunity.

Gising bayan!

[Today is Winter Solstice in the northern hemisphere. And Christmas comes in a few. They share something in common, that of renewal — and hope. And in the case of American politics, renewal comes at just the right time. 

In the Philippines, we have been self-critical of our culture of impunity. Albeit we can do more. Yet, Trump and his cabal relished in undermining the rule of law. Lock them up! 

Despite Trump’s concrete base, the good news is that, thankfully, the minority, honest-to-goodness conservatives are bailing out on him. It means the majority will keep America on an even keel. For example, science is about discovery, not perfection. It took the world a hundred years to demonstrate Einstein’s theory of relativity.

Those of us Pinoys that believe China will become the next hegemon should recognize what Rizal said. Those who submit to tyranny loves it. It appears Duterte is waking up to the reality of which side of the bread has butter.

The writer is a citizen of the world and has no respect for American politics because of its tribalism. That is why the blog never tires of referencing human development. We Filipinos want to learn it sooner than later. That is what Christmas brings to our consciousness.

Christ is dynamic, not static. Not tribal. He was born a Jew but a citizen of the world. That is why Christianity is universal. And that’s what Western democracy must seek if it is to be the world’s ideal. It may take another hundred years to demonstrate.

The family joins the writer in wishing one and all a Blessed Christmas and a Kinder New Year!]

Going around like a carousel

Should we step up to the plate and question our instincts? Or will “Pinoy Kasi” stand in the way? But why do we need to step up to the plate?

Consider our instincts: We are parochial and insular. We value hierarchy and paternalism that we rely on political patronage and oligarchy that ours is a culture of impunity.

Let’s pause right there.

And then acknowledge that we’re the regional laggard. Because we must ask: How come we’ve been running around like a carousel? Or are we riding the back of a tiger that we’re just hanging on to dear life, come what may? Sadly, the tune appeals to us: “Que, sera, sera; whatever will be, will be.”

Here’s how behavioral economics explains our quandary: “2 systems determine your behavior in your mind – one conscious and the other automatic, and your brain is lazy and causes you to make intellectual errors. [Thinking Fast And Slow by Daniel Kahneman. A Princeton University psychologist, he won the Nobel prize in economic sciences in 2002 “for bridging economics and psychology.”]

That is reinforced by “The Science of Irrationality: Why We Humans Behave So Strangely,” by Dan Ariely, scientificameric.com, 21st May 2008; Ariely is a behavioral economist at the Massachusetts Institute of Technology and author of the best-selling book, Predictably Irrational.

Then recall the “growth mindset” versus the “fixed mindset,” and this one’s from Bill Gates: “Our genes influence our intelligence and talents, but these qualities are not static. Suppose you mistakenly believe that your capabilities derive from DNA and destiny rather than practice and perseverance. In that case, you operate with what Dweck calls a ‘fixed mindset’ rather than a ‘growth mindset.’

“The fixed mindset is a huge psychological roadblock—regardless of whether you feel you were blessed with talent or not. If you have ‘the fixed mindset’ and believe blessed with raw talent, you tend to spend much time trying to validate your ‘gift’ rather than cultivating it.

“To protect your self-identity as someone super smart or gifted, you often steer clear of tough challenges that might jeopardize that identity.

“Here's how Dweck puts it: ‘From the point of view of the fixed mindset, ‘effort’ is only for people with deficiencies. [If] you’re considered a genius, a talent, or a natural—then you have a lot to lose. Effort can reduce you.” [What you believe affects what you achieve, Bill Gates, gatesnotes.com, 7th Dec 2015]

Can we in the Philippine elite recognize that “effort” is only for people with “deficiencies” – because “effort” is demeaning? That is why the blog never tires of raising that our caste system and our instincts feed on each other. And why a “growth mindset” is Greek to us.

News item: “PH's Grade 4 students lowest in math and science around the world — international study.”

Unsurprisingly, we are reacting? Translation: Grade 4 students are way lower in our hierarchy, and it’s OK to be displeased. On the other hand, we can’t be dissatisfied with ourselves? But aren’t we the regional laggard? And the latest proof is that Vietnam, once among the poorest in the world, has overtaken us.

In other words, does the buck not stop with us in the elite class – and that includes legislators, economic managers, and us in the chattering classes, among others?

Let’s get back to the two systems that determine our behavior – conscious and the other automatic. Put another way, and it explains why we can mix apples and oranges.

Here’s the predicate: Our fixed mindset, for the longest time, makes us perceive “poverty” as the reality of Juan de la Cruz.

On the other hand, our neighbors recognize that beyond their human impulse is the consciousness to traverse poverty to prosperity. And so, Lee and Mahathir advised Deng to “beg for Western money and technology to raise China’s people from poverty.”

Unwittingly, given we’re in “auto-pilot” mode, we fall into the “logic-trap” that is linear and incremental. And worse, we take “pwede na ‘yan” as a good deed.

For example, we celebrated the OFW phenomenon for the longest time because its impact on the economy gave us a positive and Christian good-deed sense. We created employment and a consumption economy that generates 6%-7% GDP growth. And the icing on the cake was the consistent upgrade in our credit ratings.

Unsurprisingly, despite the pandemic, we want to preserve and protect those credit ratings. And here’s what Fitch has to say, “Asia leading the demand-side is not true, noting that consumption is still far behind the pre-pandemic levels.” [“Fitch Ratings warns of low-base distortions in 2021 growth data,” BusinessWorld, 8th Dec 2020]

Consider: We have a structural problem that will not go away until we commit to traverse poverty to prosperity.

That is our challenge; it is beyond poverty per se. And it demands something well beyond our instincts – that also brought us a culture of impunity.

The bottom line: We boxed ourselves into a tiny corner – as in we’re riding the back of a tiger.

What is the converse? The growth mindset displayed by our neighbors, including most recently, Vietnam: Beg for foreign money and technology.

Let’s build on the predicate.

Poverty likewise bred insurgency in [the] rural Philippines. Enter: The comprehensive agrarian reform program. Question: How come there is still poverty and “insurgency” in [the] rural Philippines? And why we’re spending a ton of money on the 4Ps.

Worse, while our neighbors have become industrialized economies, they still outperform us in agribusiness, including rice. Worst, we have IRRI in our backyard. Yet, it is Vietnam that became the rice exporter to the Philippines.

Why? A fixed mindset is narrow, if not a small mind, too – because it shuts out the bigger world and nourishes parochialism and insularity.

What else did we load on the above predicate? We defined “inclusive” very narrowly that we undermined economies of scale and perpetuated the Pinoy crab mentality.

Beyond agrarian reform, we introduced the party-list system and the LGUs. We know the downsides and the reality of both. Still, we even want to push the envelope and do Federalism.

Our neighbors did agrarian reforms, too, but they moved forward and pursued industrialization instead of being bogged down by political processes – with no guaranteed outcomes, in our case.

Consider: Because of our growing consumption economy courtesy of OFW remittances and the BPO industry, we have been celebrating what we call a “manufacturing uptick.”

But that reinforces the argument that our fixed mindset deprives us of the ability to develop and industrialize. And why we continue to address poverty via the 4Ps.

We’ve been going around like a carousel. Yet, poverty, insurgency, the education crisis – and it is beyond grade school levels because, in higher education, we’re the laggards too – and underdevelopment continue to define us.

That is why the blog never fails to stress that our top eight companies cannot even match the revenues – and contributions to the Vietnam economy – of Samsung Vietnam.

News item: “Ayala Corp. eyes e-vehicle business; establishing a solid, globally competitive manufacturing sector can diversify and strengthen the country’s economic base.” [Philstar.com, 15th Dec 2020]

That is a step up in the motorcycle business no different from moving up to electric-powered jeepneys from the diesel ones. Yet, the reality is we’re 50 years behind in developing an efficient public transportation system.

If we look out to the bigger world, this is what is happening. “Pound-for-Pound Taiwan Is the Most Important Place in the World,” Ruchir Sharma, The New York Times, 14th Dec 2020.

“Over the past year, Taiwan has taken the lead in the race to build thinner, faster, and more powerful chips or semiconductors. Its fastest chips are the critical building blocks of rapidly evolving digital industries like artificial intelligence and high-speed computing. The thinnest chips will be powering the coming ‘internet of things,’ in which homes, cars, appliances, and even clothes will connect to smartphones and voice-activated speakers over 5G networks.

“As of now, any country looking to dominate the digital future has to buy these superfast, ultrathin chips from either Taiwan or South Korea. And Taiwan has the edge in both technology and market power. It is a small island of just 24 million people, but it is at the center of the battle for global technological supremacy. Pound for pound, it is ‘the most important’ place in the world. As the Cold War between China and the United States intensifies, that importance will only continue to grow.

“After World War II, only two major emerging economies managed to grow faster than 5 percent for five decades in a row and to rise from poverty into the ranks of developed economies. One was Taiwan, the other South Korea. They kept advancing up the industrial ladder by investing more heavily in research and development than did any of their rivals among emerging economies. Now they are among the research leaders of the developed economic world as well.”

Sadly, given our instincts, we won’t look out to the bigger world and benchmark. Because that entails “effort,” and it is demeaning. We are the Philippine elite. Let others exert “effort,” but not us.

Consider: “Where economists focus their research: They don’t always look in the right places,” The Economist, 10th Dec 2020.

“AN OLD joke: a policeman sees an inebriated man searching for his keys under a lamp post and offers to help find them. After a few fruitless minutes, the officer asks the man whether he’s certain he dropped his keys at that particular location. No, says the man, he lost them in the park. Then why search here? Asks the officer. The man answers: ‘Because that’s where the light is.’

“For years, the story has been used to illustrate the simple point, of great relevance to social scientists, that what you find depends on where you look.

“Indeed, another reason for economists to spend more time on under-examined places is that a broadening of horizons would improve the profession itself, and thus enable economists to serve governments better. There are too many unanswered questions in economics for some corners of humanity to receive so little attention. The 70 least-studied countries account for just 1% of all mentions in economics papers over the past three decades.

“And while the profession’s increasing focus on empirical work is welcome, concentrating research within the cone of light that data provide means that some questions are asked much more often than others: in particular, those answered with statistical analysis. An effort to pay more attention to the places least able to provide high-quality data, which often face the toughest roads to development, would force economists to grapple with qualitative matters. If critical contributions to development come from difficult-to-quantify variations in cultural factors, a geographically limited discipline will find it hard to detect them. And both the world and the profession will be poorer for it.”

Let’s get back to the Philippines and reprise: We have a structural problem that will not go away until we commit to traverse poverty to prosperity. That is our challenge; it is beyond poverty per se. And it demands something well beyond our instincts – that also brought us a culture of impunity.

Recall the blog has challenged our decades-old approach to fiscal and monetary policies because while logical, they were linear and incremental. And it comes from our fixed mindset that poverty is the challenge.

And given our lack of experience in development, we can’t wrap our heads around the economic miracles demonstrated by our neighbors.

We can disagree with the assertion, yet we can’t deny that we celebrated our GDP growth of 6%-7% for the longest time. It is classic linear and incremental thinking because we remain the regional laggard, i.e., well behind the efforts of the Asian Tigers, for example.

How do we then turn the challenge on its head and not be under the spell of linear and incremental thinking? 

Recall the posting that discussed setting a goal of raising GDP by $200 billion because we want to benchmark against and beat the hell out of our neighbors, including Malaysia.

But that’s not how we do it. See above; economists don’t always look in the right places. 

Does that explain why we’re the regional laggard? And that innovation isn’t our cup of tea? 

Recall Fr. George Gorospe; reality is dynamic and in constant flux. And in today’s age of big data and analytics, that is indeed relevant.

That’s why the blog keeps reminding us that we’re still at the dualistic level – either/or, as in the Pinoy crab mentality – in human development. For example, we recognize the Pareto principle intellectually, but in practice, we’ve never had the chance to demonstrate it.

It is not unusual. In Eastern Europe, the writer also witnessed how the lack of development experience makes the value of “the vital few” suspect (over “the trivial many.”)

And if we look even in US politics, people are stuck at the dualistic level, including avowed Christians. They forget that Christ demonstrated the folly in his confrontations with the scribes and Pharisees.

Recall the Two Great Commandments that Christ preached against the 613 Jewish Commandments. Unsurprisingly, he had to die on the cross.

In other words, like the story of creation, Christ is the manifestation of the dynamism of the universe. He did not come with the Big Bang. Because until sixty-six million years ago, dinosaurs were walking the face of the Earth when a devastating asteroid impact abruptly ended their reign. [Natural History Museum]

Recall the blog references the photosynthesis phenomenon often because it is central to living things, i.e., four (carbon, hydrogen, oxygen, and nitrogen) elements make up 95 of the molecules in living things. On the other hand, there are 118 elements, the first 94 occur naturally on Earth, and the remaining 24 are synthetic elements produced in nuclear reactions. [Wikipedia]

Enterprises, public or private and including economies and nations, are living organisms. That is why the term “ecosystem” has taken a much wider import. Unsurprisingly, they strive to create the requisite ecosystem in their effort to thrive in this universe. And photosynthesis is nature’s model of an ecosystem. Try to find a better one.

We are now in the age of big data and analytics. And the challenge of developing relevant algorithms mirrors the principle of the vital few over the trivial many.

But it demands forwarding thinking and dynamism to be able to do justice to the exercise.

Consider: “PEZA pursuing ‘township’ strategy for ecozones, upgrading worker skills,” BusinessWorld, 6th Dec 2020.

“There are 408 operating ecozones nationwide, 74 of which focus on manufacturing. Calabarzon (Cavite, Laguna, Batangas, Rizal, and Quezon) has 35 manufacturing zones; the second is Central Luzon, with 12. Ms. Plaza said these are preferred locations because of the presence of critical infrastructure, workforce, and local government unit support.

“The number one demand for industrial locators is improved logistics, currently concentrated in the National Capital Region. The leading manufacturing sectors in the Luzon economic zones are electronics, metal, rubber, and plastic products, as well as real estate.”

The above represents big data. What about the analytics? The key is not to fall into the “logic-trap” and settle for linear and incremental.

For example, the country’s most significant export categories at over 64% are (a) electrical machinery, equipment, and (b) machinery, including computers.

They give the biggest bang for the buck. That is why the blog has repeatedly raised the benchmark that is Samsung Vietnam and Vietnam Apple AirPods. We must learn to figure out the vital few over the trivial many and then design fiscal policies accordingly.

That is how to prioritize and overcome the Pinoy crab mentality. It does not mean we will neglect the rest, but we must recognize the economies of scale — and prioritize.

And it brings us to the Pearl River Delta Economic Zone. In other words, if we are to prioritize the product categories that account for over 64% of exports, we must mirror the Pearl River Delta Economic Zone. That is how to come close to our neighbors’ competitiveness because that is how we can raise our ability to attract FDIs so many times fold.

See above; setting a goal of raising GDP by $200 billion.

Can we step up to the plate and question our instincts? Or is “Pinoy Kasi” our be-all and end-all? Why do we need to step up to the plate?

Consider our instincts: We are parochial and insular. We value hierarchy and paternalism that we rely on political patronage and oligarchy that ours is a culture of impunity.

Gising bayan!