Dynamism, not any other isms

“We don't have to accept the world that we’re born into as something fixed and impermeable.” — Laurene Powell Jobs.

That’s from “Laurene Powell Jobs Is Putting Her Own Dent in the Universe,” David Gelles, Corner Office, The New York Times, 27th Feb 2020. “She’s the 35th-richest person in the world, who is funding efforts on immigration, education, and independent media.

‘It’s not right for individuals to accumulate a massive amount of wealth that’s equivalent to millions and millions of other people combined. There’s nothing fair about that.’

“And yet Ms. Powell Jobs is hardly apologetic. ‘I inherited my wealth from my husband, who didn’t care about the accumulation of wealth. I am doing this in honor of his work, and I’ve dedicated my life to doing the very best I can to distribute it effectively, in ways that sustainably lift individuals and communities.

‘I’m not interested in legacy wealth buildings, and my children know that. Steve wasn’t interested in that. If I live long enough, it ends with me.’”

“Bill and Melinda Gates are giving their three kids a ‘minuscule portion’ of their wealth. ‘It will mean they have to find their way. It will compel them to rely on themselves. It’s not a favor for kids to have them have huge sums of wealth. It distorts anything they might do, creating their path.'”

There are others too, “7 billionaires who won’t leave their fortunes to their kids,” Emmie Martin, CNBC, 6th Jul 2017. They include Mark Zuckerberg, Warren Buffett, Michael Bloomberg, Andrew Lloyd Webber, Pierre Omidyar.

It is about dynamism, not any other isms. “We don’t have to accept the world that we’re born into as something fixed and impermeable.” — Laurene Powell Jobs.

Does that run counter to the instincts of Juan de la Cruz? Recall who we are: We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy that ours is a culture of impunity.

Why are graft and corruption second nature to us? Because of our caste system, we accept our rank as fixed and impermeable. Think of our value of hierarchy and paternalism, as in entitlement as opposed to personal responsibility.

Or that we shall forever be the colonized, while the former colonizers will perpetually be superior. And they owe us paternalism.

Or that isms like socialism and capitalism are fixed and permanent. They are a human construct that man’s dynamism can undo. That is why the blog keeps raising the story of Eden and the banishment of Adam and Eve and the migration of the first homo sapiens from Africa. And that the prophets and Jesus, while respecting tradition, criticized aristocracy. The story of creation – as in the universe – is dynamic.

For example, greed is a human construct and brought about the 2008 Global Recession and its aftermath of greater inequality – and, surprise, surprise, populism.

Enter: the 2020 pandemic. Whatever happened to parochialism and insularity? To win against future pandemics, Bill Gates stepped down from his Microsoft role to focus on this global challenge, global health being the centerpiece of his philanthropy.

The story of creation teaches us lots of things. For example, organisms thrive in this universe because of its ecosystem, best described by photosynthesis. It is an excellent lesson in creating a virtuous as opposed to a vicious circle.

Think of how vicious greed – a human construct – is that it upended the global economy. The answer is not any other isms but dynamism, as in the story of creation. 

If the universe was created for organisms to thrive, shouldn’t we learn from it?

For example, “innovation” is not for innovation’s sake. It must raise a man’s well-being. The challenge is, how do we replicate a virtuous circle like the ecosystem, so that progress and development will make the humankind thrive?

AI scares lots of people. But then again, it is a human construct. It is not fixed and impermeable.

Why does the blog keep raising Vietnam’s visionary leadership and that it mirrors Lee, Mahathir, and Deng? Because Samsung Vietnam generates far more significant economic benefit for that nation than our top eight listed companies – in the Forbes list – combined for the Philippines.

What makes up the ecosystem of the Philippine economy? We know that by heart: The two drivers of the economy, OFW remittances, and the BPO industry. And, the above-referenced top eight enterprises. The picture we see is that of a service-consumption economy. Indeed, it is responsible for the 6%-7% GDP growth rate that we’ve had for several years now.

Yet, we know from the international institutions that even at this pace, it will take us a generation to see the light at the end of the tunnel. That is why Arangkada came into being. We must strive to move twice as fast. We must be looking at incremental export revenues of $100 billion. 

See below how to become a 100-million-dollar enterprise. But that is for a micro-enterprise in a country with a population of less than 10 million. We are over ten times more.

And we need 1,000 micro-enterprises as dynamic as these people to be on the way to make Arangkada a reality. Which means, we require that many more substantial enterprises. And we cannot get there at the rate we generate businesses until we attract very significant foreign investments. Consider: The Philippines has 775,000 MSMEs against 3,000 large enterprises. 

In the face of the 2020 pandemic, given the sheer number of MSMEs, the stimulus-relief package will not suffice, and many will fall by the wayside. It applies as well to the US despite its $2-trillion funding. That is why the blog shared the efforts of a nephew and friends to keep their restaurant afloat and at least cover the payroll. 

So, what lesson can we learn?

Let’s pause briefly to illustrate why correct analysis can miss the impact of analytics. Because MSMEs represent 99.6 percent of our establishments, we have, for the longest time, stressed the importance of their role in developing the economy. It reveals a failing in analytics. Recall analytics demands forward-thinking. To foresee, to be ahead of the curve, and distinguish the vital few from the trivial many.

We are looking at incremental export revenues of $100 billion to bring us closer to the performance of our neighbors that have addressed poverty better than us. It is not the outsized number of our MSMEs that will deliver our desired revenues. Analysis per se doesn’t equate to forward-thinking. 

See below how a micro-enterprise must shift its mindset to “innovation” and be in an altogether new ballgame. That is what the analysis misses. The challenge is beyond access to finance, which has been our go-to prescription.

As the blog has repeatedly raised, we look at MSMEs as livelihood undertakings because of our value of hierarchy and paternalism. And that translates to entitlement, not personal responsibility. That lack of dynamism extends to our acceptance that our top eight listed companies combined cannot match Vietnam’s mightiest private entity because Juan de la Cruz is inferior to MNCs.

The bottom line: Our ecosystem is deficient. Both our large enterprises and MSMEs fail to deliver the revenues that will put us on the road to prosperity. That is why poverty remains our top emotional concern because it is reality.

We must go back to the drawing board and craft a different ecosystem. For example, if we benchmark against our neighbors, we must move up to an industrial-investment economy.

Yet, it does not mean relying on the same patrons – political patronage and oligarchy. As our neighbors did, we must learn to look outward, not inward.

Let’s digress anew to build on the evil of patronage – and our culture of impunity. If there is truth to the following assertion, where is the outrage? Recall the controversies involving the two water companies. This time, it’s electricity. Two fundamental needs if we are ever to provide the necessities of Juan de la Cruz and build towards an industrial economy.

“From the biggest income-generating government agency, Napocor was bankrupted by the do-gooders with PSALM doing the rehabilitation.

“On the contrary, the independent power producers recklessly violated their part of the obligation when supposedly they are mandated to liquate all their overdue accounts with Napocor. Even before Napocor could fully pay Westinghouse, it accumulated an even more considerable amount of uncollectible account, which reason why it sold its geothermal plants, hydropower dams, and in maintaining, expanding, and securing our transmission grid.

“As one observed, the de-monopolization law is more of a farce. The modern-day oligarchs practically acted like living gods, dictating, and shaping the country’s economic and political life.” [Saving the National Power Corporation, Rod Kapunan, Backbencher, Manila Standard, 28th Mar 2020]

But we must resume the posting:

Recall innovation and global competitiveness characterize the 21st century. Sadly, because of our caste system, we don’t see Juan de la Cruz able to pursue such 21st-century challenges. It is a repeat of how we chose the overseas employment route versus the pursuit of industrialization.

We see Juan de la Cruz as inferior to MNCs, for example. But dynamism opened the world to Vietnam; also, Singapore, Malaysia, and China earlier. See above Vietnam’s visionary leadership. 

But what about our MSMEs. That is why the blog continually speaks to the writer’s Eastern European friends. They didn’t bow to a fixed and impermeable world or ism despite decades under Soviet rule – that turned them into the most impoverished nation in Europe. That is why the writer was motivated to help them voluntarily. They demonstrated that they were dynamic.

“You are a micro-enterprise, losing money for eight years now. You are competing against global behemoths from the West – in this business you chose. Yours indeed was your competition. And I know how they can crush you. That is why USAID asked me to come and assist you.

“Your dynamism and ambition are a good starting point. Next, if you want me around, transparency will be the rule. I am out the door once you step on that line. For decades as an MNC manager, every year, I signed an undertaking that I have not indulged in any practice that violates this principle. And my expenses are being covered by a US government entity, and I gave the same commitment. 

“Now, for the new reality that you must understand and accept: You will be a 100-million-dollar enterprise. That is where you must be if you are not going to be crushed by the competition. Your first investment is on a product that doesn’t raise the consumer’s well-being and thus cannot command high margins.

“We must start on the right foot. Your country is too tiny, even to have a chance. It is good that you are looking at your next-door neighbor. But that still won’t suffice. You must be a regional player, at the very least. But then, the big boys will again kick your butt.

“The good news is you can create other similar products, but this time, they must be high-margin ones. That means undoing your mindset of selling “economy” brands because cheap products are more natural to sell. In a word, your mindset must shift to “innovation.” It will mean borrowing money. But before that, you need an altogether new business model – so that financial institutions from the West will give you the time of day – because it mirrors a virtuous circle.

“Your country is in the accession process to join the EU. That is a great asset. Your market will include wealthier nations that will pay for high-quality and innovative products. That is why you must be looking at first becoming a 100-million-dollar business. You will be in a new ballgame.”

Long story short, three years later, they turned into a profitable going concern, and in 2011 the EU Competitiveness Commission recognized them as a model. It was a no brainer because they came out of the 2008 Global Recession a much stronger enterprise, after kicking the butts of their Western competition.

And they will again come out more robust post the 2020 pandemic. How? Their profitability more than doubled in 2019 from the prior year. It comes from their growing portfolio with every product development effort guided by innovation, as in raising a consumer’s well-being. Moreover, in the first quarter of this year, their top line has grown much more as with their profitability. 

In other words, they have the firepower to fight and win in an economic slowdown, much more so than they had in the 2008 Global Recession. Because they are dynamic, geared to creating a virtuous circle, an ecosystem that will make their enterprise thrive against the demands of the 21st century.

Let’s get back to the Philippines. If there is a theme for this posting, it is dynamism.

“We don’t have to accept the world that we’re born into as something fixed and impermeable.” — Laurene Powell Jobs.

Gising bayan!

“Why independence, if the slaves of today will be the tyrants of tomorrow? Moreover, 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]

“Now I know why Paul dared to speak of ‘the curse of the law’ (Galatians 3:13). Law reigns and discernment is unnecessary, which means there is little growth or change in such people. When you do not grow, you remain an infant.” [Faith and Science, Open to Change, Richard Rohr’s Daily Meditation, 23rd Oct 2017]

“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]

“National prosperity is created, not inherited. It does not grow out of a country’s natural endowments, its labor pool, its interest rates, or its currency’s value, as classical economics insists. [A] nation’s competitiveness depends on the capacity of its industry to innovate and upgrade.” [The Competitive Advantage of Nations, Michael E. Porter, Harvard Business Review, March–April 1990]

“You have to have a dream, whether big or small. Then plan, focus, work hard, and be very determined to achieve your goals.” [Henry Sy Sr., Chairman Emeritus and Founder, SM Group (1924 - 2019)]

“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]

“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]