We live and die by our instincts.

This posting will build on earlier ones that spoke to our need to “get ahead of the curve.”

It is to disabuse our minds – and overcome “pwede na ‘yan.” Recall that the blog often references “forward and lateral thinking” beyond “logical yet linear and incremental thinking.”

Why? Because we are the regional laggard – and it is not new. We may no longer be the sick man of Asia, but we’re still the cellar-dweller.

And the blog commends Andrew Masigan for his article, “PHL performance in the last decade and the reforms needed,” BusinessWorld, 19th Dec 2021.

In brainstorming lingo, or its latest version, Design Thinking, Andrew offered a “strawman” or hypothesis – or prototype.

Ideally, the next step is for the “team” to build on it. And in the real world, as the saying goes, there are six ways to Sunday.

We can easily google “Design thinking” – an iterative approach to problem-solving that intentionally seeks out people with different perspectives, knowledge, skills, and experience and has them work together to create a practical solution for a real-world problem.

And I hope that others would follow suit and build on Andrew’s hypothesis.

And those in the Philippine elite and chattering classes may want to participate?

For example, we must tap beyond economists and “think tanks” and “economic managers” and legislators. We must welcome, for example, the winningest coach in college or pro basketball.

There is a vast chasm between a cellar-dweller and a winning team, and that winningest coach can edify us on the culture of winning. Indeed, if losing is a culture, winning is too.

We also need the likes of the late George Gorospe, SJ, to illustrate what “reality” is, i.e., that it is beyond any human experience or system – which is consistent with the character of this universe, i.e., dynamism and interdependence.

To internalize a winning culture is to get ahead of the curve.

For example, if Vietnam could accomplish a lot in ten years, that must be the benchmark, not twenty years. Recall that in 2009, when the blog started, Vietnam’s GDP per person was less than ours – but their FDI was almost twice. And in 2020, they overtook us.

And it is not unique; they mirrored the Asian Tigers – and China – begged for Western money and technology.

And that’s why the blog advanced a forward view for Juan de la Cruz, which we can label as “outcome,” to differentiate it from “output.” And that is, “To traverse poverty to prosperity rapidly.”

That is a translation derived from the Theory of Change.

And so, the blog is encouraging us to do our homework and read up on Design Thinking and the Theory of Change.

And those who read the blog know that I am not an academic but a practitioner.

Consider: Many best-practice models the blog has shared are consistent with similar theories. In other words, I first learned by doing before I encountered these theories. And the postings are intended to confirm these theories.

Let’s move from “outcome” to “output.”

For example, instead of the 6% GDP growth metric we are familiar with, the blog introduced an incremental GDP of $200 billion as “output.”

But let’s drill down to the next level:

The legs of the PH economy are services (60%), industry (31%), and agriculture (10%). And Vietnam: services (51.3), industry (33.3), (agriculture (15.3).

The above confirms our reliance on OFW remittances and call centers. And Vietnam beats us in industry and agriculture too.

The narrow gap in the industry is illuminating, i.e., that was how Vietnam was able to arrest poverty.

Consider: Their exports are twice more, and they are in tech-based products, e.g., Samsung smartphones. Recall that the blog often raises this one company demonstrates the multiplier effect on jobs and the economy, i.e., its subindustries, e.g., raw material sourcing, parts, and components, among others.

On the other hand, our service-consumption economy cannot spawn such subindustries.

Let’s pause right there.

Our assumption that the focus on jobs via the OFW phenomenon and call centers would suffice to drive the economy and address poverty was way off base. 

Sadly, we continue to speak about “jobs” as the be-all and end-all. 

Our economists must edify us on the import of the “multiplier effect.”

It is no different from the comprehensive agrarian reform program. It did not eradicate poverty. 

That is why the blog often speaks to “forward and lateral thinking” – and we must get ahead of the curve.

Here’s another theory or principle, the “vital few” versus the “trivial many” – aka Pareto. And because of our crab mentality, we have not internalized the import of this universal principle.

In other words, we struggle to figure out the “vital few” areas that propelled Vietnam to leave us in the dust – as did the Asian Tigers and China before them.

And Pareto builds on another change theory, force-field analysis. To successfully pursue change, we must exploit the forces driving the efforts and fix those that will hinder them.

That is why the blog has quoted the following several times: “McKinsey and Co. Philippines Acting Managing Partner Jonathan Canto said the Philippines should explore a potential niche as a manufacturing hub with 80% of US companies and 67% of European companies from China to elsewhere in Asia. And Vietnam, Thailand, and Malaysia are currently gearing up to take over China.

“Mr. Canto recommended that the Philippines reassess its FDI strategy and priority sectors, build unique deal-focused value propositions, focus on investment promotion, and ensure end-to-end support for investors.” [“Foreign chambers tout FDI as key to economic recovery, poverty relief,” Bianca Angelica D. Añago, BusinessWorld, 1st Dec 2021]

There is Vietnam again, gearing up to lure more FDIs.

What about agriculture? Two of our neighbors are rice exporters, Thailand and Vietnam.

But then again, beyond eliminating the restrictions on farm sizes and raising the budget of the DA, we must benchmark against Thailand and Vietnam – because there are other factors and nuances that we must know and learn by heart if we are to match their competitiveness.

And we can add IRRI as a resource – because IRRI is a “knowledge bank” that is too precious to ignore.

What about coconut. It is a significant export for PH. Have we fully exploited this opportunity? Or has political patronage and oligarchy gotten in the way? Should we do our homework — and tap the right resources — to figure out the way forward for the industry?

Recall the Pareto principle, the “vital few” versus the “trivial many.” That is why the blog never misses citing the coup pulled by the Vietnamese in luring Samsung smartphones.

What produce and products must make up the portfolio of the Philippine agribusiness industry? If rice and coconut, and coconut-based products have sizable markets and generate ideal revenues and margins, what else must we consider? Consider crop rotations, for example.

Then think of the Theory of Change about defining a desired “outcome” and “outputs” and tracing or mapping backward the critical elements that will constitute the portfolio’s ecosystem. And to test that we don’t miss a beat, the mental model must be the photosynthesis phenomenon. 

For example, there are three dynamics to manage if an undertaking is ever to succeed: (1) the marketing mix, (2) the resource mix, (3) the execution mix. In other words, it is beyond enlarging farm sizes and raising the budget of the DA.

We want to tap a marketing practitioner, and an experienced project manager with an enviable execution track record to better handle the above dynamics.

To recap: We can create a de facto group to brainstorm and craft how to traverse poverty to prosperity rapidly.

And that group can include, among others: economists, “think tanks,” “economic managers,” legislators, the likes of George Gorospe, Mr. Canto of McKinsey, IRRI, Arangkada, AmBisyon.

We can add another one to represent the next generation BPO industry because we can’t just talk and talk about moving up the value chain. 

In other words, we can’t let “pwede na ‘yan” unwittingly stunt the development of an industry that delivers practically as much as OFW remittances, the two being the drivers of the Philippine economy.

If we dig deeper into this apparent complacency, do we see our instincts getting in the way again? 

Recall that the blog had asked why we didn’t develop the instincts of innovation? Recall too the question from my Eastern European friends on the first brand we focused on: Do you think we can even compete against the best brands from the West?

“You must continually move up the value chain, not be bogged down by the bottom of the pyramid. You must be committed to raising one’s well-being by respecting the hierarchy of human needs. That is what innovation is.”

How do we get ahead of the curve? Recall that beyond “logical yet linear and incremental thinking” is “forward and lateral thinking.” The latter responds to “the 4 C’s to 21st-century skills,” especially critical thinking and creative thinking.

It is not a one-dimensional world. Recall that even in a Fortune 500, neither R&D nor finance can be the be-all and end-all. In other words, there are nuances between the “real world” and the academic world.

Let’s now highlight some of the points raised by Andrew Masigan in his hypothesis:

“To maintain our position as the world’s second-largest provider of IT-KPO, we must evolve to become a center for excellence in artificial intelligence, animation, game development, information and knowledge management, robotics, cloud technology, and software development.

“What reforms are necessary to be competitive in the abovementioned industries?

“Foremost is to restore confidence in government. Policies start from the top and can only regain faith if we elect a transformative, honest, trustworthy leader in 2022.

“We must ament the restrictive provisions of the constitution to make us a competitive investment destination. In particular, the 60-40 rule on equity ownership, the opening of mass media and advertising to foreigners (which is basic if we are to compete in knowledge-based industries), and lifting the prohibition of foreign nationals from professional practice and being represented in corporate boards of directors.”

We live and die by our instincts. We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy that ours is a culture of impunity.

Indeed, we in the Philippine elite and chattering classes hold the key. We must be the first to embrace change if we find meaning and new hope for Juan de la Cruz.

But we will not find meaning and new hope if instinctively we want to preserve the status quo – where rank has its privileges.

At the risk of being immodest, the blog often speaks to best-practice models that are my personal experiences – because I can talk from the heart about the challenges they presented and how we overcame them.

But recall what I said to my Eastern European friends from the get-go that they were “outraged” because they expected me to spoon-feed them: Freedom and the free market are not about rules but principles. You must commit to transparency, or I’m out the door.

In other words, I did not demonstrate that I was all-knowing but encouraged them to learn the ropes. For example, I did workshops instead of lectures, i.e., it is a journey of discovery, unlike rote.

I learned from experience that “cognitive development” – the ability to move across the continuum of “binary and relative thinking” – is a function of experience.

And that is also the message of this posting: Design Thinking is an iterative approach to problem-solving that intentionally seeks out people with different perspectives, knowledge, skills, and experience and has them work together to create a practical solution for a real-world problem.

But is that something we can embrace?

We live and die by our instincts.

Gising bayan!

The family joins me in wishing one and all a Blessed Christmas and a Healthy and Prosperous New Year!