Winning against the odds

“We will raise prices to lift revenue-volume and attain critical mass; we will spend money to make money!” Tell that to a bunch of ex-socialists as a competitive imperative and they give a blank stare?

Of course to raise prices if the product is uncompetitive is a formula for disaster! In much of the developing world the imperative of innovation is not yet compelling: how do they develop a dynamic, inquisitive and forward-looking outlook? Until they do, developing competitive products is not on their radar screen? In fairness, to the handful of tycoons, it is instinctive – and thus explains their ever growing success.

Spending more money to make money? Or investing – or why developing countries need to internalize the dynamic of investment (including foreign, because the bigger the better) and competitiveness and the resulting elevated output/economic activity or GDP?

But should we distinguish between the ‘common good’ and the ‘benefit of the few’? We are an underdeveloped economy going by the acid test of development – i.e., GDP per person. On the other hand, given the size of our population, local-premier businesses are thriving. But that’s more a function of access to capital in a developing country where there’s a crying need for products and services not obtaining in the developed world – i.e., there’s an inherent room for growth (and thus JPMorgan says it’s bullish on the country, over the short-term). Yet outside the country they don’t have a competitive edge and thus have not raised our competiveness?

The legislative agenda offered by the UP (OU) to the new administration is a great template. Yet – if the Business Mirror editorial said it all – is it a classic output of linear thinking? Breakthrough ideas don’t come from linear and incremental thinking? They come from turning the challenge on its head – by starting with the end in view. How do Apple and innovative companies do it?

“We must be out quick with a product that is becoming – it must be user-friendly, accessible and relevant.” Is that what the iPhone (or the iPod, the iPad or the MacBook) is all about? We can pose a similar challenge about our economy: “We need our GDP per person up to $30,000, to attain developed-country status – that is a long ways away from our current $3,300. Because developed economies are high in investment and competitiveness and low in poverty? How do they do it, e.g., the Asian tigers – they attract enormous foreign investment and thus elevate their competitiveness that drive export and raise GDP, and reduce poverty?”

The legislative agenda from the UP (OU) exercise talks of bridging our budget shortfall (sounds like Clinton?) by rationalizing taxation and administration; and pursuing infrastructure development, among other things. That is well and good. But we’re dealing with decades-old challenges: we need breakthrough ideas? The biggest revenues come from greater output of products and services – we’re not a multi-trillion dollar economy like the US where balancing the budget creates a big bang? The Business Mirror editorial stopped short of ignoring the ideas from international agencies – because we want something suitable to our needs! For example: we need “to ramp up investment and boost our competiveness”?

What are the drivers of a competitive, sustainable economic activity – revenue (and loads of it), profit and productivity? For example: (1) developing our strategic industries that will attract foreign investors, and drive and expand our economic pie – the point made by the foreign chambers, (2) prioritizing and upgrading our basic infrastructure (of water, food and power) plus those that will support said strategic industries and (3) pursuing the enablers/arresting the barriers of progress: competitiveness, corruption and economic freedom?

It’s time to turn our economic challenge on its head – we’ve beaten it black and blue? The pie is too small?