Why our instincts?

They come from our caste system – that has infected us with hubris.

Should we pause right there and ask: can we recognize that it will do us more harm, not less until we resolve and commit this nation to traverse the road from poverty to prosperity – beyond preserving our rank and privileges?

That without an honest-to-goodness commitment to nation-building, we won’t have the courage to face the challenges it brings.

That sense of entitlement – from pulling rank and dispensing or demanding paternalism – won’t instill personal responsibility in Juan de la Cruz.

The bottom line: We shall remain beholden to the status quo – COVID-19 notwithstanding – and be out-of-sync with the universe we live in – i.e., a 24/7 dynamic phenomenon.

Humankind is equipped – via the hierarchy of human needs – to thrive in this world; otherwise, we won’t be a cog of the oneness of creation, aka the story of Eden or the big bang. Recall the first impulse of Adam and Eve was physiological; they needed to cover and protect their bodies. Still, living in a cave wasn’t conducive to one’s well-being. Thus, the need to create the necessary tools to move up in the scale of human development. Enter: the stone age and the bronze age. Fast-forward to today: we relish the wonders of our gated communities.

But not so fast. Where is our water, electricity, and an efficient public transportation system – and a globally competitive economy? In other words, we must create the virtuous circle demanded by the 21st century to raise the well-being of Juan de la Cruz, defined by the hierarchy of his needs – of education, health care, and a future for his children and grandchildren and great-grandchildren.

Consider: Why did Rizal warn us about our love for tyranny – that he created Padre Damaso? And why did our elders create Juan Tamad and Bondying? They are all outcomes of our caste system – a system of entitlement.

What would the writer come across after the most recent posting that spoke to the reality of the universal law of “divine oneness” – as in a globalized world and the Pascal principle on the physics of water? A piece that argues the Philippines presents an opportunity for local enterprises, big and small, being a vast market of over one hundred million keen consumers. The conclusion reveals our true colors of parochialism and insularity: industrialization and globalization be damned.

The article missed recognizing that our woeful national income per person renders us impoverished. And that Juan de la Cruz won’t have the means to progress as a nation despite the drivers of the economy – OFW remittances and BPO revenues.

Worse, we won’t develop the capacity to respond to the 21st century’s demands, being a highly competitive world. Recall where the mantra of serving “the bottom of the pyramid” brought us. Today, the reality is staring us in the eye: that our eight top listed companies – combined – can’t match one enterprise from Vietnam, Samsung Vietnam. What more of the rest of our private sector, especially the MSMEs?

We can’t have our cake and eat it too. Sing alleluia to the OFW phenomenon yet shut the country from the rest of the world.

How much deeper do you want to sink in the abyss?

Which brings us back 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.

But let’s switch gears and come back to our instincts later.

In a recent posting, the blog promised to take up the MSMEs.

Here it goes: In 2012, the UP ISSI (Institute of for Small-Scale Industries) published “An Assessment of Micro, Small, and Medium Enterprises That Underwent UP ISSI’s Integrated Plant Surveys for the Period 2006 to 2011.”

The objectives of the paper were to: 

(1) Identify the most common problems faced by the firms [there were 107 of them in the study] and at the same time highlight some of the best practices and coping mechanisms that they adopt under each function area; (2) Assess whether the small firms exhibited some common attributes that may form a model for MSMEs; (3) Formulate general recommendations for the government, UP ISSI, and the MSMEs studied.

And here are the general recommendations for the firms:

(1) Clarify the organization’s strategy and purpose; (2) Be big, yet small – act within a global paradigm yet remain nimble, flexible, and quick to respond to arising opportunities and challenges; (3) Cultivate entrepreneurship attitude and behavior – through the communication and positive reinforcement that entrepreneurship is valued; (4) Encourage diversity of structure and thinking by being open and flexible to the global economy’s changing dynamics; (5) Make the best use of knowledge by digging deep into organization structures, technology frameworks, and stakeholder alliances to capitalize on intellectual assets fully.

Here’s the closing piece of the recommendations: 

That for these MSME owners to grow, they must overcome the aversion to risks and instead bank on the entrepreneurial spirit that started up the enterprise and has sustained it. Without this motivation from the owners themselves, no amount of recommendation or development assistance from either the government or the study group itself will be possible.

With that, we shall skip the recommendations for the government and UP ISSI. In other words, for an enterprise to succeed, it must be the stakeholders themselves – in this case, the owners must be the engine.

Blaming everyone and his uncle does not square with what the free market is.

How should we react?

Recall MSMEs (numbering close to 800,000) account for 99.6% of the Philippines’ total registered enterprises. They employ about two-thirds of our working population yet generate only 35% of national income. On the other hand, the large enterprises, for all their positive attributes, make lesser employment. Worse, they are not globally competitive. See above; Samsung Vietnam. Recall the question, why are jobs created abroad and not here in the Philippines?

How do we square the circle?

The state of our industry – big and small – reflects our failure in nation-building. And it starts with our caste system that explains our hubris – and sense of entitlement. This land is my land. I will be parochial and insular – and magically, Juan de la Cruz shall be head and shoulders above the rest of the world.

Let’s get back to the recommendations of the above-subject paper: (a) “Clarify the organization’s strategy and purpose."

Then pause and ponder: What insights can we get from that straightforward statement? Should the reason for being of our MSMEs’ be to serve “the bottom of the pyramid”? Think of why we are stuck with the jeepney. Isn’t that what it helps? [Disclosure: The writer knows the expert that preached “marketing to the bottom of the pyramid.” He made a significant contribution to systematizing the value-chain concept. But recall “absolutism” and moving up in human development, as in metacognition. Also, the definition of “creativity,” i.e., connecting the dots. And “nirvana,” i.e., creating a virtuous circle. As well as respecting the hierarchy of human needs.]

Then project that mentality to our large enterprises. Do we see why the combined revenues of our most significant enterprises can’t match that of Samsung Vietnam?

It’s insanity, so said, Einstein. Why do we keep doing it? Consider: Hubris and the sense of entitlement follow us at the square-one in human development, i.e., absolutism. We can’t move up to relativism because only Padre Damaso has the capacity and the choice to create a virtuous circle.

Relativism presupposes questioning how we think, aka metacognition. But there is no room for that in a frozen mind. That is why in the social sciences, there is such a thing as “unfreezing exercises.” We must unfreeze our hardened “minds” to make room for new thinking.

It also explains why even our quants don’t go beyond “analysis.” Because “analytics” demands forward-thinking, consider: why are we stuck at the 6%-6.5% GDP growth rate for the longest time? And, more recently, tax rationalization?

Think of why insanity has taken a grip on our mindset in our “war against poverty.” Or why the mantra of productivity and food security made us an utter failure in rice production – we are the largest rice importer in the world.

Just a few days ago, there was a report that our tycoons will be embarking on large-scale agriculture to once and for attain economies of scale – and overcome the pitfalls of subsistence farming. With due respect, beyond productivity, beyond food security and economies of scale, is nirvana. How should we define nirvana?

Recall the story of creation and the universe and how organisms thrive. Think of the photosynthesis phenomenon. It is a virtuous circle, not a one-dimensional process that absolutism demands.

If it’s not apparent yet, we are connecting the dots. As the great innovator, Steve Jobs demonstrated, we can only connect the dots going backward – which presupposes forward-thinking, or how can we go back if we never got ahead of the curve in the first place? That is why he defined creativity as purely connecting the dots.

For example, beyond the mantra of a 6%-6.5% GDP growth rate, our real challenge is generating incremental GDP of $200 billion to get us ahead of Malaysia, Thailand, and Vietnam – and overcome poverty to the extent that they did.

The blog was delighted to read, “Dominguez said the government should discard its old ‘one-size-fits-all’ incentives program, and shift to a demand-driven approach. That means it identifies the types of industries that the economy needs to flourish, so incentives can be granted based on the industry players’ specific requirements that it wants to set up shop in the country.” [‘Tailor-fit’ perks eyed to lure investments, Julito G. Rada, manilastandard.net, 24th May 2020]

In other words, we must forward-think and figure out which will be the next Samsung Vietnam or AirPods Vietnam and then offer the principal – which will be foreign money and technology – perks “tailor-fit” to their needs that they set up shop in the country. That is how we can approximate the success of Vietnam in aggressively driving export revenues.

And that should be a good model for our tycoons to embark on large-scale agribusiness. It is beyond economies of scale or productivity or food security – even beyond the war on poverty.

We want to create a virtuous circle so that we can traverse the road from poverty to prosperity. Not indulge in one “absolute” initiative because it is time, we overcome insanity.

What lessons must our MSMEs pick up from all the preceding? To forward-think. What business are we in, and who is the global leader in the industry? Recall the small Guangzhou enterprise that did their homework and then knocked on the writer’s old MNC-company.

And, the inspiration of the blog – the writer’s Eastern European friends. “We are an MSME, new in the free-market system. Our products are selling, but we have not made money in eight years. How do we move up to the next level?”

We shall be in a new playing field. We must become a $100 million enterprise because that is how we can stand toe-to-toe against Western giants. They must be our benchmark. We will create a “virtuous circle” with delightful products so that consumers from anywhere in the world will want them.

But to get there, we must first understand and respect the hierarchy of human needs. It is a perpetual fountain of innovation. The 21st century is one of continual “innovation” and global competition. Local financial institutions may not understand all that gobbledygook, but the Western ones do because they have the experience that local banks don’t.

It is worth repeating: That for these MSME owners to grow, they must overcome the aversion to risks, and instead bank on the entrepreneurial spirit that started up the enterprise and has so far sustained it. Without this motivation from the owners themselves, no amount of recommendation or development assistance from either the government or the study group itself will be possible.

But why our instincts? They come from our caste system – that has infected us with hubris and the sense of entitlement. And they won’t instill personal responsibility in Juan de la Cruz.

Gising bayan!

“True social reform has little to do with politics. To unmoor ourselves from the burdens of the past, we must be engaged in the act of continual and conscious self-renewal. All men are partially buried in the grave of custom. Even virtue is no longer such if it is stagnant.

“Change begins when we finally choose to examine critically and then recalibrate the ill-serving codes and conventions handed down to us, often unquestioned, by the past and its power structures. It is essentially an act of imagination first.” [David Henry Thoreau; American essayist, poet, and philosopher; 1817-1862]

“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]