Moving up the value chain

A World Bank study (and so is the Chairman of PLDT) is telling us to move up the value chain. That means – if we are to be competitive – we need to be predisposed to pursue new things or new product ideas? That may require a radical change in our mindset – for example, the assumption of materiales fuertes is a no-no? The Economist magazine had reported that while Europeans could generate more ideas than Americans, the latter were more successful in commercializing new product ideas.

This brings to mind two American icons, almost a century apart, who articulated their vision about new product ideas. Thomas A. Edison: ‘I want to see a Phonograph in every American home’; and Bill Gates: ‘We started with a vision of a computer on every desk and in every home.’

They were future-oriented – forward-looking, not backward-looking? The writer would relate this to his European friends and they would concede that until New Europe, Old Europe was basking in their glorious past?

We would rather pursue progress – even The Flintstones did, lived like their present-day peers? But in our psyche do we fear the downsides of consumerism? But that would we like outsmarting ourselves? It is not about consumerism, it is about digging out of the pits – to quote Dr Jesus P Estanislao? (And being driven out of Eden was our first lesson about progress?)

Product development means visualizing a scenario – for example: What is there (a need or a wish) in our contemporary lifestyle that could be served with a new product idea? Understanding the fundamentals of a product architecture and developing lateral-thinking skills obviously are a must.

Moving up the value chain goes beyond the sound bite? As the World Bank study says: "Moving up the value chain requires investment -- in infrastructure, machinery and equipment, education, skills, information technology, etc." (And it is refreshing a major local bank is dismissing inflation concerns that could come with increased investment flows. Is it because we want to outsmart ourselves – and seek perfection? The writer and his wife were in Vietnam last winter as they were devaluing their currency – they simply had to bite the bullet; progress is not pain-free but seeing less poverty than ours is incentive enough? Where is perfection – who can cast the first stone?)

The bottom line: investment, investment, investment? The good news is the Aquino Administration appears focused on investment. But are we – as a people? We can’t talk about our elevated expectations from the new administration if we are not prepared to make our own radical change?

For example, reports Business World, Sept. 29^th: “Manila should understand that TPP (Trans-Pacific Partnership) participants would be required to undertake significant legal reforms that involves a strong intellectual property rights system and opening the services sector completely, with very few exceptions . . . specifically . . . financial services, telecommunications, computer services, and distribution . . . [there is need to] thresh out regulatory, competitiveness, and transparency issues. . . The benefits of free trade, such as higher trade flows and investments, won’t come if some sectors of the economy remained shut. You can liberalize tariffs but if you haven’t been liberalizing other elements of your trade regime, you are not going to reap the benefit . . .” (Of course, the ASEAN countries could accuse the US of protectionism – welcome to the real world? Bullies will always be bullies but that’s why we were taught to be smarter? And that’s what the writer’s Eastern European friends are learning, everyday – and that our own ‘taipans’ demonstrated over the years, bullied by people in uniform/authority?)

Until we embrace change we would be stuck pursuing low-value added, if not generic, call centers, semiconductors, garments, dried mangoes and the like? They’re not bad product ideas, but we need to move up the value chain – because global competitiveness is the nirvana; and that means tapping what the global economy has to offer – and developing product ideas that satisfy the needs of the contemporary lifestyle?