[Why is ours a damaged culture? Then consider: We are too weak to face a pandemic and the 21st century. How can we then make Juan de la Cruz thrive? Recall the story of creation.]
Put another way, how do we relate the “here and now” and the “must-do” to the “context”?
Because Juan de la Cruz is in survival mode, the knee jerk is to react, not to proact. It explains why everyone is trying to come up with a prescription. Recall the comprehensive agrarian and land reform program, the OFW phenomenon, 4Ps, war on drugs, POGO spectacle, among others. And the MSME bias and our reliance on the Big Boys.
In other words, we see our challenge in a one-dimensional, linear mode that feeds on “Pinoy abilidad,” as in a quick fix – “madali lang yan.”
Recall how Steve Jobs defined creativity: It is connecting the dots, but you can only do it going backward. For example, we will be strong to face a pandemic and the 21st century if we gear to thrive in a dynamic environment; and the story of creation is the context and the setting and the framework of that environment. That is why the blog calls “the story of the creation” the North Star.
But the distance between the “North Star” and “Execution” can be measured in eons.
That is why in an enterprise, Juan de la Cruz must be on the same page. It brings the Roosevelt fireside chats to mind, speaking to the nation that because the undertaking is daunting, it must guard against the fear of the unknown. That the only fear is fear itself.
Recall how conventional wisdom explains progress and development to Juan de la Cruz. Even in the age of COVID-19, we hear how the economy will contract. The GDP will turn south or down, not up. And we needed the stimulus relief package. To tide us over in the hope that the pandemic will be gone sooner than later.
For the last several years, we have been celebrating the nation’s GDP growth rate of 6%-7%, the international standard for a fast-growing economy. Yet, Juan de la Cruz always says that numbers don’t mean much when he is hungry. See above; the menu of prescriptions that we’ve lived through, and yet, we remain the regional laggard with the highest poverty rate among the neighbors.
We’ve added to the prescriptions too, especially because of rural poverty, i.e., irrigation, farm-to-market roads, the use of fertilizer, extension programs, and on and on.
In the meantime, because of the pressure to do more for Juan de la Cruz, we are rationalizing taxation. To direct – even raise – incentives where we get the biggest bang for the buck, but reduce them if not eliminate when they don’t.
And continually, we are especially managing liquidity, interest rates, exchange rates, and the debt ratio. As well as pursuing other interventions like K-12, healthcare, housing, and lots more.
They all come down to the need to keep to the 6%-7% GDP growth. What are we missing? That it will take a generation before we can see the light at the end of the tunnel.
Enter: the DTI and the private sector and government, again. We are lagging our neighbors export-wise, we need incremental export receipts of $100 billion. The private and foreign sectors translated that into Arangkada. While NEDA put out AmBisyon and the Senate stepped in with Tatak Pinoy.
Still, there are ways to sharpen execution. The distance between the “North Star” and “Execution” comes to eons, and so there must be no disconnect.
It is important that Juan de la Cruz appreciates the lingo of the GDP instead of dismissing the numbers as meaningless – because I continue to be hungry.
To quote from an earlier posting, “We need a thousand of our close to 800,000 MSMEs to forward-think and craft a game plan to attain a global benchmark, $100 million enterprises. And simultaneously, our large enterprises must collaborate with Arangkada, AmBisyon, and Tatak Pinoy to raise our export receipts by $100 billion.”
That equates to an incremental GDP of $200 billion and will put us ahead of Malaysia, Thailand, and Vietnam. That must be the vision for us to overcome the label of regional laggard – and why Juan de la Cruz is hurting.
The most significant challenge in a universe of 1,000 MSMEs, because of sheer numbers, is the risk of underperformance. “Gravity” will want to pull such efforts down.
In the private sector, they define forward outlooks as “stretched goals.” To pump and raise the adrenalin. Think of how a start-up operating from a garage can upend Big Blue. Today people talk of Apple, not IBM.
Note that the DTI is looking for incremental export receipts of $100 billion. There is a greater probability for large enterprises to deliver, again because of the laws of physics. That is why Arangkada described them as Big Industry Winners.
Still, as the blog has discussed, we can’t go it alone. We must tap foreign money and technology for us to get into the big league. And we must prioritize, leverage Pareto, and be divorced from the crab mentality.
As important, is to call out the most potent oligarchy that the party is over. We are undermining our efforts to raise our ease-of-doing-business quotient by sweeping aside our culture of impunity.
The DTI, while working on the 42 industry road maps, must identify our priorities, the couple of initiatives that will give us the biggest bang – and almost at warp speed. That means adopting the “fast-fail” model of Silicon Valley, i.e., doing prototypes quickly, so we learn rapidly and be in continual learning mode – as we upgrade a prototype at each go-around.
We need such learning experience so that we can better manage the rest of the 42 industries – and become adept in industrial development. It will also pinpoint how we must prioritize infrastructure development efforts.
The key is to create a virtuous circle which the blog has discussed in prior postings, to replicate the photosynthesis phenomenon.
And why “the story of creation” is the “context” or the North Star that will ensure Juan de la Cruz thrives in the dynamic environment not only of a pandemic but the 21st century as well.
Beyond Arangkada and AmBisyon is Tatak Pinoy. And they can cater to MSMEs. Note these smaller enterprises, close to 800,000 of them, account for 99.6% of total establishments, and employ two-thirds of the working population. But they don’t pull their weight, accounting for 35 percent of national income.
And the reason is they are primarily livelihood undertakings. If we likewise set a vision of $100 billion incremental revenues from this sector, we are putting them on a higher plane. That means how we support them must also change. We need 1,000 of these MSMEs to each attain revenues of $100 million. That is 0.13% of the close to 800,000 MSMEs that we have. In the bigger scheme of things, it is not as insurmountable.
But as a first pass, we must leverage Pareto. In a universe – of 1,000 MSMEs – it is best to group them, e.g., an A, B, or C. Those that are livelihood efforts for whatever reason, e.g., they are a supplementary source of family income, not the main one, will most likely want the status quo. This group can be the C group.
On the other hand, some are in scalable businesses. And whose products can move up the value chain? They don’t have to be in high technology. The writer’s Eastern European friends are into day-to-day products people need yet have long surpassed the $100 million mark.
They will be the A group. And those in-between will be the B group.
The current efforts to support MSMEs may suffice for those in the B and C groups, although the issue of finance will always be there. It is a function of how much the country is willing and able to set aside to support them.
But the test is: Are they running a tight ship? Can they create a virtuous circle within a modest enterprise? If they can, there will be a reason for financial institutions to step up. See above; the writer's friends.
Before we get too far, please see above: As a first pass, we must leverage Pareto. Why? To visualize: (a) the “fast-fail” model; (b) how to quickly do a prototype; (c) rapidly learn the model; and (d) to be in continual learning mode. Note this is only a first pass.
In other words, we cannot get 1,000 MSMEs altogether to each become a $100-million enterprise. We must toss the crab mentality and respect Pareto. The problem Juan de la Cruz has is we hate MNCs that we don’t have under our sleeves, managing or even selling a multi-brand portfolio in a multi-country universe. That is the root of the crab mentality and why we are yet to internalize Pareto. And that’s why the blog tirelessly speaks to our lack of experience in development, unlike our neighbors. Think of our failings in the basics of water and electricity, rapid infrastructure development, and in parallel, moving from a service-consumption economy to an industrial-investment economy.
That may also explain why we are yet to understand that absolutism is folly. For example, we know now that the global yardstick of a 6%-7% GDP growth rate for fast-growing economies won’t translate to lifting Juan de la Cruz from abject poverty? See above; IBM, for the last 27 years, was granted the most patents consistently, but people talk about Apple, not IBM. What about the Nobel prize? LTCM brought the financial crisis ten years before the 2008 Global Recession, and two of them were Nobel prize winners. Then we know Padre Damaso.
Recall the blog has repeatedly said that it is not about any isms but dynamism. And that the Soviet empire is now history. Or that because America has fallen into the trap of tribalism and dualism, it is losing its way. The saving grace is institutions remain robust that checks and balances won’t perpetuate tyranny. That when we choose friends, we must recognize what we are dealing with; perfection is not of this world, but tyranny is not what free people seek. But we do love tyranny?
Let’s then tackle the A group per above. They need lots more financial and technological wherewithal if they are to scale up and move up to higher value-added initiatives successfully. They must demonstrate the foresight and the imperative to compete beyond the Philippines.
Recall the blog never ceases to speak to 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.
They are our biggest stumbling block. We must dig deep into our hearts and souls that the sense of personal responsibility will overcome them.
For example, financial and technological wherewithal won’t come down like manna from heaven. That is why the blog speaks to the banishment of Adam and Eve from Eden, and that the first homo sapiens had to migrate from Africa. Dynamism is inherent in the story of creation. It must be the North Star.
Access to finance and technology for the A group presupposes the enterprise is stepping away from the current MSME paradigm. One that is parochial and insular and characterized by static, not dynamic energy. Instead, it has internalized the imperative of innovation because it is a manifestation of dynamism. It commits to respond to the needs and aspirations of humankind to raise its well-being. That will be the source of its ability to participate and win in the marketplace, create a virtuous circle, and thrive accordingly.
In fairness, despite all the dynamism of the writer’s Eastern European friends, he continues to hold their hands. They were under Soviet rule for four decades, and have lots to undo.
This posting builds on the efforts of the blog for us to shift our paradigm. With due respect to our economic managers. Social progress and development demand dynamism and innovation. And collaboration, one discipline alone will not cut it.
That is why two of the concluding quotes of every posting are:
“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]
“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]
But let’s not kid ourselves. See above; we value hierarchy and paternalism. That it reveals our caste system and struggle with dynamism, ensconced in our instincts.
It will take lots of doing before we can undo our paradigm. Still, whatever we believe is our North Star, if we cannot relate the “here and now” and the “must-do” to the “context,” we are most likely to fail than succeed.
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]
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