“We sit in a wider ecosystem.”

But, sadly, our caste system – which comes from our instincts – limits our vision.

We need an altogether new playing field.

Consider: “The habits of Steve Jobs, Jeff Bezos, and other innovative CEOs reveal much about the underpinnings of their creative thinking. For example, research shows that five discovery skills distinguish the most innovative entrepreneurs from other executives.

“Dyer, of Brigham Young University; Gregersen, of Insead; and Christensen, of Harvard Business School, reveal how innovative entrepreneurs differ from typical executives. Their study demonstrates that five ‘discovery skills’: (1) Associating – it helps them discover new directions by making connections among seemingly unrelated questions, problems, or ideas; (2) Questioning – it allows innovators to break the status quo and consider new ideas. Through (3) observing, innovators carefully and consistently seek small behavioral details—in the activities of customers, suppliers, and other companies—to gain insights about new ways of doing things. In (4) experimenting, they relentlessly try on new experiences and explore the world. And through (5) networking with diverse individuals from an array of backgrounds, they gain radically different perspectives.” [“The Innovators’ DNA” by Jeffrey H. Dyer, Hal Gregersen, and Clayton M. Christensen; Harvard Business Review, December 2009]

Those familiar with the blog know that this is not the first time it spoke to the innovators’ DNA. For example, “the ability to successfully connect seemingly unrelated questions, problems, or ideas from different fields is central to the innovator's DNA.”

Consider: “We sit in the broader ecosystem. CEOs can embrace anthro-vision; lessons from anthropology fall into three key buckets.

“First, anthropology helps you to understand your customers much better and, above all else, do something that is in some ways the simplest thing in the world, but the hardest thing in the world to implement, which is to recognize that other people don’t think like you.

“It’s so easy if you are a CEO or an aspiring executive who spends all your day basically in the office or working on a project to fall into the trap of assuming that other people have the same instincts and mentality as you. And it is so vital in today’s globalized world to recognize that it’s simply not true.

“It’s essential to learn to walk in someone else’s shoes and see the world differently. That way, you avoid risks, but you also see new opportunities all over the place.

“The second point is you need not just use anthro-vision to look at your customers, clients, or suppliers, but flip the lens and look back inside your organization and see all the things hidden in plain sight that are incredibly hard for insiders to see. There’s this beautiful Chinese proverb that a fish can’t see water. And it’s tough for us to see ourselves unless we step out of ourselves and look back afresh. So that’s a second area.

[Here’s an anecdote: An anthropologist brought up the notion that things may appear hidden in an organization even when they are in plain sight to outsiders. He was with his wife; they sat next to the wife and me (in our portable lounging chairs) on the grounds of Tanglewood a couple of summers ago. But then we had to give way for the Boston Pops to play Beethoven’s Symphony No. 5, which is why they draw a large crowd every summer. He and I shared an interest; he’s in consulting, specializing in helping organizations better communicate internally and see what typically insiders can’t.]

“But the third area where anthropology is helpful is in terms of recognizing that these tunnel-vision tools, such as an economic model or a big data set or a corporate balance sheet, are lovely, but they are also limited.

“It’s becoming apparent that for a company, the corporate balance sheet isn’t the be-all and end-all in terms of measuring the company.

“Because things that people used to consider as footnotes to the corporate accounts, like diversity issues, actually impact the company.

“As for big data, they are only as good as the data you put into a model. And if they are recent, past, and the present, they may not work if the context is changing, so that the future may not be the same as the recent past.

“So that three-part message is really at the core of what anthro-vision could offer: better understanding of other people outside of your company who are your customers and clients; better appreciation of what’s happening inside your company; and a realization about how you as a company sit within a wider ecosystem, and why you have to widen that lens.” [“Looking at the world like an anthropologist,” McKinsey & Company, June 2021]

And it is not only a broader ecosystem we face but a dynamic one too.

And to thrive in this universe necessitated a creature like humankind, in the image likeness of the Creator.

And how does Juan de la Cruz connect the dots given our instincts? We are parochial and insular. So, we value hierarchy and paternalism and rely on political patronage and oligarchy that ours is a culture of impunity.

Here’s a quote from a recent posting. Consider: “We are not the homeless boy who seeks to sniff epoxy — at the risk of being the target of EJK — to bring him to sleep and not face the reality of hunger. 

“Moreover, the Philippine pie is so tiny that raising the shares of the LGUs of the national tax revenues will undermine the efforts of the nation to provide Juan de la Cruz with his basic physiological needs. It is pure unadulterated crab mentality, the consequence of Pinoy abilidad.

“Let’s pause right there. How come we in the Philippine elite class can’t keep our eyes on the ball? The reality is only Juan de la Cruz is impacted by our meager GDP per capita ($8,908) because we make even more than the average Malaysian’s $28,364. 

“Denial is how we perpetuate our caste system – and preserve our rank and privileges.

“Over decades, we kept managing our economy via logical and incremental thinking – instead of lateral or creative and forward-thinking – and proudly celebrated a GDP growth rate of 6%-7%. Yet, we remained the regional laggard – and must borrow tons of money for the 4Ps so that Juan de la Cruz can put body and soul together.

“Sadly, that paradigm is not the answer. Why? Because as our neighbors demonstrated, it is about traversing poverty to prosperity. It is not charity per se. Charity is not what ‘inclusive’ means. ‘Inclusive’ means to become prosperous as an economy and nation.

“But we want to keep to our puny minds – aka binary or dualistic thinking – even when our neighbors already scaled the cognitive development ladder. So, they embraced dynamism and interdependence that wealthy nations opted to partner with them – pouring loads of money and technology.

“How do we shift paradigms?

“One of our most significant shortcomings is our inability to think forward and prioritize courtesy of our crab mentality. And it is complicated by our binary thinking, i.e., we don’t distinguish charity from the common good. Put on top of that our caste system.

“It explains why we see virtue in hierarchy and paternalism – that only Rizal saw otherwise.

“In other words, until we can own up to our instincts, we will constantly be blindsided.”

Let’s test the assertion that we can’t think forward and prioritize – compared to our neighbors.

Our top two exports account for over 64 percent of export revenues. They are (1) Electrical machinery, equipment, and (2) Machinery, including computers.

On the other hand, fruits and nuts are less than 4 percent.

And our top eight companies, combined, can’t match the revenues of Samsung Vietnam, the latest of the neighbors that overcame poverty – while we haven’t.

Consider: “Although only some 25% work in agriculture (farming and fisheries), if we include the whole value chain of agribusiness (post-harvest, agricultural inputs, logistics, food processing, and food retailing), the percentage jumps to as high as 65%, as recently reported in a column by a foremost commentator on agricultural issues, Ernesto Ordoñez.” [Work as an enduring human activity, Bernardo M. Villegas, Human Side Of Economics, BusinessWorld, 1st & 8th Jun 2021]

Then consider: “A (second) reason Europe fell behind in recent decades is that its biggest firms are in the wrong industries. The sectors European firms dominated 20 years ago, such as insurance or telecoms, have grown slowly. Even if European firms did well, as many did, they mattered less as the world moved on.” [“Europe is now a corporate also-ran,” The Economist, 5th Jun 2021]

In other words, it is not only a broader ecosystem we face but a dynamic one too.

Let’s pause right there.

To be dynamic is not in our bag of tricks — and we can’t keep ignoring it. 

We must embrace a growth mindset in agriculture — and get ahead of the curve. 

We must visualize the industry beyond food security.

We must satisfy the 21st century — i.e., innovation and global competitiveness. 

We must attain state-of-the-art and be the leading edge.

Yet, we don’t have to go it alone.

We must lure foreign money and technology. 

“Pinoy abilidad” and an inward-looking bias turned us into the regional laggard.

That’s why the blog discussed the industry along with these caveats: (1) We must benchmark against our neighbors, i.e., we don’t need to reinvent the wheel; (2) The principle of economies of scale is vital to make Philippine agribusiness competitive; (3) We must move up the value chain – i.e., serve the needs of consumers beyond our shores, and beyond mere farm produce, and leverage the food chain – as in Maslow’s hierarchy of needs. 

Recall the GPS model that the blog often replicates in the postings.

It is a great tool to think forward and prioritize. But, sadly, we can’t seem to own up to our instincts or habits. And we can’t figure out where we are to be able to traverse poverty to prosperity.

See above: Our top two exports account for over 64 percent of export revenues. They are (1) Electrical machinery, equipment, and (2) Machinery, including computers.

They are where we get the biggest bang for the buck, as in Pareto. But, on the other hand, we are unable to think forward and prioritize given our crab mentality.

Translation: We surrendered the playing field to Vietnam. We must now keep our noses on the grinding stone to reclaim it. Today is not the time to be parochial and insular. We don’t want to be left in the dust again — by the likes of Cambodia and Myanmar.

Juan de la Cruz cannot personify Bondying — as in an underdeveloped economy and nation.

We sit in a broader ecosystem. But, sadly, our caste system – which comes from our instincts – limits our vision.

Gising bayan!

The folly of “Pinoy abilidad”

If it took the Americans a hundred years to acknowledge the truth about the Tulsa race massacre, are we in a race to a failed state if we’re not there yet?

In 25 more years, it would be a hundred years since the Americans granted us independence.

The real scare is: Will 25 years be enough for us to own up to our instincts or habits?

Let’s pause right there. How else to recognize that if we are kidding anyone, it is only ourselves? Juan de la Cruz cannot personify Bondying — as in an underdeveloped economy and nation.

Recall this anecdote: “In 2008, the big boss of Samsung was here in the Philippines to evaluate the business conditions on which country is the best for them. But finally, Samsung chose Vietnam. Not the Philippines.

“This is quite an interesting story because the Philippines still has the same way of thinking as in 2008. There are many restrictions and limitations on foreign investors here in the Philippines. Under these restrictions, I am sure no big Korean investments will come.” [“Filipino last (?),” Boo Chanco, DEMAND AND SUPPLY, The Philippine Star, 7th Jun 2021]

Translation: In 2019, Vietnam’s exports were $249B against our $131B. Recall the impact of the “multiplier effect” in an investment-industrial economy compared to a consumption-service economy – and why poverty still confounds us but not Vietnam – on generating far more and higher-paying jobs.  

Enter “Pinoy abilidad.”

“PRESIDENT RODRIGO R. Duterte’s executive order directing the devolution of certain National Government functions to local government units (LGUs) could end up displacing civil servants, according to a union of public-sector workers.

“Mr. Duterte last week issued Executive Order (EO) No. 138, requiring National Government agencies to transfer several essential services to LGUs by 2024.

‘In the DSWD (Department of Social Welfare and Development) alone, based on our initial estimates and the devolution transition plan, more than a thousand workers will be affected by this devolution,’ Alan Balaba, president of the DSWD employees union, said in the statement.

“EO 138 follows a Supreme Court (SC) ruling entitling LGUs to an expanded share of the National Government’s tax take, which triggered the move to devolve certain activities to the local level in light of their greater funding.” [“Public sector union warns LGU devolution could displace civil servants,” Kyle Aristophere T. Atienza, BusinessWorld, 6th Jun 2021]

This story is more than classic “Pinoy abilidad.” It is also an expression of our crab mentality. It’s a pyrrhic victory – and why we’re the regional laggard.

Recall that FVR kept talking about “making the pie bigger.”

And the best way to explain that is to compare our GDP (PPP) per capita (US$) against our neighbors: PHL = 8,908; IDN = 11,812; THA = 18,460; MYS = 28,364.

Let's hold it right there. We don't need a Ph.D. to make that simple comparison. How come we even entertained the notion that we are a wealthy nation pretending to be poor?

Or why shift our focus to “happiness” that we want to toss the reality of our national income? 

Consider: We are not the homeless boy who seeks to sniff epoxy — at the risk of being the target of EJK — to bring him to sleep and not face the reality of hunger. 

Moreover, the Philippine pie is so tiny that raising the shares of the LGUs of the national tax revenues will undermine the efforts of the nation to provide Juan de la Cruz with his basic physiological needs. It is pure unadulterated crab mentality, the consequence of Pinoy abilidad.

Let’s pause right there. How come we in the Philippine elite class can’t keep our eyes on the ball? The reality is only Juan de la Cruz is impacted by our meager GDP per capita ($8,908) because we make even more than the average Malaysian’s $28,364. 

Denial is how we perpetuate our caste system – and preserve our rank and privileges.

What to do?

As FVR said, we must make the pie bigger. How?

Over decades, we kept managing our economy via logical and incremental thinking – instead of lateral or creative and forward-thinking – and proudly celebrated a GDP growth rate of 6%-7%. Yet, we remained the regional laggard – and must borrow tons of money for the 4Ps so that Juan de la Cruz can put body and soul together.

Sadly, that paradigm is not the answer. Why? Because as our neighbors demonstrated, it is about traversing poverty to prosperity. It is not charity per se. Charity is not what “inclusive” means. “Inclusive” means to become prosperous as an economy and nation.

It is not out of this world. It is how civilization evolved.

But we want to keep to our puny minds – aka binary or dualistic thinking – even when our neighbors already scaled the cognitive development ladder. They embraced dynamism and interdependence that wealthy nations opted to partner with them – pouring loads of money and technology.

How do we shift paradigms?

One of our most significant shortcomings is our inability to think forward and prioritize courtesy of our crab mentality. And it is complicated by our binary thinking. If no will edify us to distinguish charity from the common good, we won’t ever see the light of day. Put on top of that our caste system.

It explains why we see virtue in hierarchy and paternalism – that only Rizal saw otherwise.

In other words, until we can own up to our instincts, we will constantly be blindsided.

Recall that the blog teed up, generating an incremental GDP of $200 billion. Such specificity should impel us to think and prioritize forward. In short, we will then ask ourselves, what industries and products will deliver the most outcomes that will bring us closer to that ideal number?

Let’s hold it right there. Did that thought process ever come to our minds? That’s why the bog often refers to the different chambers of the brain. Yet, humankind is a creature of habit. We’re not predisposed to move out of our comfort zones, especially us Pinoy – and more so us, in the Philippine elite class – given our caste system. 

Then consider: That a substantially higher GDP generates more significant national tax revenues. Simply put, let’s first make the pie more significant. Then we can entertain farming tax takes out to LGUs – because currently, we can only farm out so little while undermining the ability of the nation to traverse poverty to prosperity.

If it took the Americans a hundred years to acknowledge the truth about the Tulsa race massacre, are we in a race to a failed state if we’re not there yet?

In 25 more years, it would be a hundred years since the Americans granted us independence.

The real scare is: Will 25 years be enough for us to own up to our instincts or habits?

Gising bayan!

Habits are too hard to break.

And that is universal. Be it in Europe, the US, or the Philippines.

And I can relate to the articles below, being a resident of all three locations.

From Europe: (1) “Europe is now a corporate also-ran. Can it recover its footing (?),” The Economist, 5th Jun 2021; (2) “Europe’s history explains why it will never produce a Google,” The Economist, 13th Oct 2018. They were written three years apart and confirm that habits are too hard to break.

And from the US: “You Should Learn the Truth About the Tulsa Race Massacre,” Tom Hanks, The New York Times, 4th Jun 2021. That happened a hundred years ago. Is denial a habit that is too hard to break that it took a hundred years for someone to step up to the plate?

Now, let’s go the Philippines: (1) “Duterte-Duterte tandem a 'final stop' in the decades-long rise of dynasties — analysts,” Bella Perez-Rubio, Philstar.com, 4th Jun 2021; (2) “The Mandanas Ruling, Bayanihan III, and the pandemic: Imperative for devolution,” Luisito V. Dela Cruz, BusinessWorld, 3rd Jun 2021; (3) “Reviving domestic industries,” BERNIE CAHILES-MAGKILAT, EDITORS DESK, Manila Bulletin, 4th Jun 2021; (4) “Brownouts: Disaster-in-waiting for PH’s economic recovery,” Editorial, Manila Bulletin, 3rd Jun 2021; (5) “Learning crisis and complementarity,” Edilberto C. de Jesus, BUSINESS MATTERS, Philippine Daily Inquirer, 5th Jun 2021.

Are we still surprised about the political dynasties in the Philippines?

Recall our instincts that the blog never fails to raise: We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy that ours is a culture of impunity.

In other words, despite our proudly professed faith, our habits have kept us in the dark, i.e., what this faith means.

And why the blog keeps reminding us that democracy is the mirror image of Christianity, i.e., the imperative of personal responsibility for the common good.

Unsurprisingly, we invoke paternalism to define “inclusion.” What are we missing? That paternalism explains our crab mentality because the common good presupposes personal responsibility.

Is that why we are talking about reviving domestic industries? Question: What industries are they?

Have we forgotten that we are a consumption-service economy, and the OFW remittances are driving the economy?

What are we missing, or is it a manifestation of denial?

Did we not applaud Arangkada because we knew we had to move beyond a consumption-service economy to an investment-industrial economy? Sadly, by the end of the Duterte administration, we would have wasted a dozen years (including the Aquino administration) in pursuing industrialization – and we’re still languishing. And that is why we want to keep the Duterte dynasty?

Didn’t our neighbors demonstrate to the world how to traverse poverty to prosperity? Is that how we overcome our narrow definition of our challenge, i.e., of addressing poverty? Can we reconcile our bias for inclusion to the imperative of traversing poverty to prosperity?

It is more than semantics – as in the distinction between orthodoxy (correct belief) and orthopraxy (proper conduct.) Recall Padre Damaso and why the blog often raises the difference. Or binary or dualistic thinking versus relativism. Or unity instead of uniformity.

That’s why the blog challenged our worldview. Should we embrace dynamism and interdependence instead of hierarchy and paternalism? And all we need to do is to benchmark against our neighbors. It is not rocket science.

Consider: If it is not “tubig” that we howler about, it is “kuryente”!

We’ve had this problem even before the family relocated to New York over three decades ago.

And it does not stop there!

“A World Bank forum added weight to the appeal sounded by PBEd (Philippine Business for Education) last year for action on the country’s learning crisis. The pandemic damaged and continues to degrade the educational system. Both public and private schools have suffered, adding greater urgency to the goal of promoting greater complementarity between them. But the learning crisis predated the pandemic.” [de Jesus, op. cit.]

Rizal was hoping that “the youth is the hope of our future.” Not if we have a learning crisis – on top of a culture of impunity courtesy of political dynasties and oligarchy and an underdeveloped economy that can’t provide Juan de la Cruz his basic physiological needs.

That is not to promote socialism but to demand replicating what our neighbors have achieved – traversing poverty to prosperity.

And that is how our worldview, courtesy of our instincts, consigned us to regional laggard.

Here’s a quote from an earlier posting: “Can Juan de la Cruz embrace a worldview characterized by dynamism and interdependence?

“It is not if we stick to our caste system, i.e., to preserve hierarchy and paternalism – aka dependency.

“When we come down to it, we confirm Rizal’s worst fears: He who submits to tyranny loves it.

“And that is how autocracy continues to thrive in many countries and why the world remains a tinderbox.

“Consider: We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy that ours is a culture of impunity.”

Recall that Samsung Vietnam generates more revenues than the Philippine top eight companies combined.

“I received this e-mail from a senior Korean business executive who was reacting to a column I wrote on Vietnam and how it overtook us in economic growth.

‘Your column on 12th Feb was quite instructive for me. I’ve been thinking it over, and I suggest you write another column on ‘Why Samsung Electronics went to Vietnam.’

‘In 2008, the big boss of Samsung was here in the Philippines to evaluate the business conditions on which country is the best for them. But finally, Samsung chose Vietnam. Not the Philippines.

‘This is quite an interesting story because the Philippines still has the same way of thinking as in 2008. There are many restrictions and limitations on foreign investors here in the Philippines. Under these restrictions, I am sure no big Korean investments will come.’” [“Filipino last (?),” Boo Chanco, DEMAND AND SUPPLY, The Philippine Star, 7th Jun 2021]

Beyond our neighbors, can the Europeans’ challenge teach us – the Philippine elite class and the chattering classes – lessons too?

“Nearly five decades after Steve Jobs founded Apple, it is now worth more than the 30 firms in the German blue-chip DAX index combined. Its value is not far off that of all 40 companies in France’s CAC index. Apple’s success has been notable, but it is the decline of corporate Europe that is truly striking. At the start of the 21st century, 41 of the world’s 100 most valuable companies were in Europe (including Britain and Switzerland but excluding Russia and Turkey). Today only 15 are.

“How did European companies fall behind their American competitors?

“The first reason is that its firms are lackluster. Look at firms competing in the same sector over the past 20 years, and incumbent American companies more often than not went on to churn out more significant profits and are better positioned for future success than their European counterparts.

“There are many exceptions to this rule. But by and large, it has been better to bet on Nike of America over Adidas of Germany, JPMorgan Chase in New York over Credit Suisse in Zurich, or America's Walmart over France’s Carrefour. Their advantage in terms of profits and sales growth is often tiny but compounds over time.

“A second reason Europe fell behind in recent decades is that its biggest firms are in the wrong industries. The sectors European firms dominated 20 years ago, such as insurance or telecoms, have grown slowly. Even if European firms did well, as many did, they mattered less as the world moved on. America, by contrast, had already made significant inroads into software and e-commerce, industries that would soon redefine the global economy and generate trillion-dollar valuations.

“The third, and most striking, reason Europe has fallen behind is the lack of newly created firms in its blue-chip indices. Many of the biggest companies in America, such as Amazon, Netflix, Tesla, or Facebook, are young enough to be run by their founders. In Europe, old names prevail.

“Of the world’s 142 listed firms worth over $100bn, 43 started from scratch in the past half-century, 27 in America and ten in China. Only one was in Europe: SAP, a German software group founded in 1972. Half of Europe’s richest ten billionaires inherited fortunes spawned long ago; in America, nine of the top ten are wealthy solely because of companies they founded.”

What is The Economist demonstrating? That they, the Europeans, must benchmark against the best in the world.

But we Filipinos struggle to distinguish patriotism – which in its extreme spawns fascism – from the common good. Is that why it distressed Rizal – that we submit to tyranny because we love it?

Consider: Is The Economist disloyal by demonstrating how Europe must benchmark against the world’s best? Or are we doing a disservice – as in ours in a culture of impunity – to Juan de la Cruz by our value of hierarchy and paternalism – i.e., that we rely on political dynasty and oligarchy?

Let’s give the final word to Tom Hanks: “America's history is messy but knowing that makes us a wiser and stronger people. 1921 is the truth, a portal to our shared, paradoxical history. An American ‘Black Wall Street’ was not allowed to exist, was burned to ashes. More than 20 years later, we won World War II. That was despite institutionalized racial segregation; more than 20 years after that, the Apollo missions put 12 men on the moon while others were struggling to vote, and the publishing of the Pentagon Papers showed the extent of our elected officials’ willingness to lie to us systemically. These lessons chronicle our quest to live up to the promise of our land. To tell truths that, in America, are meant to be held as self-evident.”

Yet, it took a hundred years before someone stepped up to the plate.

Habits are too hard to break.

And that is universal. Be it in Europe, the US, or the Philippines.

But do we wish to see Juan de la Cruz the laughingstock of the region, if not the world?

Gising bayan!

Dynamism and interdependence: A worldview

Can Juan de la Cruz embrace a worldview characterized by dynamism and interdependence?

It is not if we stick to our caste system, i.e., to preserve hierarchy and paternalism – aka dependency.

When we come down to it, we confirm Rizal’s worst fears: He who submits to tyranny loves it.

And that is how autocracy continues to thrive in many countries and why the world remains a tinderbox.

Consider: We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy that ours is a culture of impunity.

And we want to put an exclamation point to preserve our caste system via a leadership team representing (a) the Marcos camp and (b) Duterte’s?

Translation: We want to be at odds — totally and completely— with this universe that is a 24/7 dynamic phenomenon, exemplified by the photosynthesis process that makes living things, including humankind, thrive; and by the continual forward motion and expansion of the galaxies.

Unsurprisingly, we have been going around in circles re amending the Constitution. But the Constitution is merely an expression of our static instincts. The Constitution does not operate in a vacuum – nor stand alone.

Instead, we should be “amending” Juan de la Cruz – as in reinventing ourselves, if not mutating, as organisms do. 

Sadly, Pinoy abilidad is always about outsmarting ourselves – as in “pwede na ‘yan.” And that is why we always fall short.

Because we are reactive and not proactive, it is not surprising, especially for us in the Philippine elite class, i.e., instinctively, we want to preserve our rank and privileges. And why we are status quo-bound.

Consider: (1) We never fail to heap praises on our largest conglomerates, but that’s par for the course, and (b) How we put up Davao as the best practice model for the rest of the country. And we all had high hopes that Duterte would transform the Philippines into an ideal akin to Davao.

Sadly, we don’t want to own up to our instincts. How do we then expect to reinvent ourselves?

Davao is near and dear to my heart. I spent part of my earlier career in Davao. And I still bring the family to visit. But Davao is not Singapore or KL.

But that is why the blog often speaks to benchmarking – to seek and attain state-of-the-art and be the leading edge.

But because we are status quo-bound, time and again, we are scornful of our neighbors despite successfully demonstrating to the world what economic tigers are.

In the meantime, we keep to Pinoy abilidad – prescribing solutions that at best are within the bounds of our comfort zones.

The evidence?

Consider: “My favorite story showing the folly of top-down agricultural governance came out of a visit I once made to an impoverished barangay in the highlands of Mindanao, where I noted almost nothing but tall cogon grass around. I asked the barangay captain, a farmer, what he would ask of government if granted one wish. His answer: carabaos. Did they get anything from the government? He said yes, fertilizers and hybrid seeds.

‘Without carabaos to till our land, we have no use for it. We take it as such and sell it.’ The MAO (Municipal Agricultural Officer) insisted that she had constantly told higher-ups of her farmers’ prior needs, but told me exasperatedly: ‘All these programs come to us from Manila, and they’ve already decided that it’s fertilizers and hybrid seeds that they want to give.’” [“Provinces are key, Cielito F. Habito,” NO FREE LUNCH, Philippine Daily Inquirer, 1st Jun 2021.]

What’s the point? Benchmarking is the point. We must seek state-of-the-art – and be the leading edge – if we are to leapfrog the competitiveness of our neighbors.

And the principle is economies of scale. For example, it starts with the optimal size of farms – and why we must learn to pull them together as cooperatives and then figure out the crop variants. We must produce crops that will (1) find a bigger market and (2) that the international market perceives as “value-added.”

We must assemble the requisite resources to complete the ecosystem of Philippine agribusiness. Beyond carabaos, mechanization is vital. 

And beyond farm produce, we must forward think to develop packaged consumer products. That is how to move up the value chain or Maslow’s hierarchy of human needs. 

But we cannot go it alone. If Vietnam lured Samsung and Apple to make them the regional hub of these foreign products, that is the benchmark that we must satisfy. 

Ergo: We must reinvent ourselves, toss parochialism and insularity – and not be the regional laggard.

Recall that my mental model in creating an ecosystem is the photosynthesis phenomenon as a practitioner and mentor. That is how to be the leading edge — as demonstrated by two Fortune 500 companies and a once MSME from Eastern Europe that turned into a giant killer.

Beyond our neighbors, we also sneer at the West.

Let’s stop right there.

Yet, Asian leaders repeatedly gave us unsolicited advice: Beg for Western money and technology.

And Lee and Mahathir spring to mind. We must welcome former colonizers despite our angsts because we don’t have the money and technology to go it alone. But we took that for granted, especially in our quest to nationalize the Philippines. It is classic binary or dualistic thinking – and why we now realize the weakness of the Constitution.

That happened decades ago. Yet, we continue to invoke parochialism and insularity – as in “national interests.”

Who defines national interest? If it is us in the Philippine elite class, instinctively, we will explain it as preserving our rank and privileges. And that is throwing Juan de la Cruz under the bus. 

But that is why the Philippine insurgency is Greek to us. No different from why White Americans — while in the minority, still represent a healthy slice — can’t comprehend “Black lives matter.”

Did we not say China is the economy of tomorrow, and we must toss the West in favor of China – because it is in our national interest?

Because we are reactive, we don’t forward think and took the WPS for granted – until pretty recently. That’s why the blog never fails to raise that democracy is the mirror image of Christianity, i.e., the imperative of personal responsibility for the common good.

In other words, freedom-loving people embrace dynamism and interdependence – if we want to fine-tune our definition of national interest.

The bottom line: We are like novices in foreign and trade relations because we never elevated ourselves to the level of our neighbors.

Benchmark. Benchmark. Benchmark.

And that’s why, beyond lagging in economic development and nation-building, we languish in cognitive development. It also reveals where we stand our “technology” and “innovation” quotient (“IQ”).

In short, we are still at the binary level, left behind by our neighbors – that have long reaped the rewards of relativism, as in dynamism and interdependence.

And that explains why we are in the minor league, with Cambodia and Myanmar – not the big club.

Consider: “Entrepreneurs need help,” EDITORIAL, Philippine Daily Inquirer, 31st May 2021.

“Micro, small, and medium enterprises (MSMEs) account for more than 90 percent of businesses in the Philippines. According to think tank Moody's Analytics, it follows that they would suffer the most from a prolonged economic recovery from the pandemic, exacerbating the hardships they have been going through since the onset of the recession last year.

“In the sobering assessment of Moody’s Analytics’ chief Asia-Pacific economist Steven Cochrane, in his recent report titled ‘APAC Outlook: The Long and Winding Road: The longer the recovery, particularly if 'fiscal' support has been modest, as in Indonesia, the Philippines, and Thailand, there is a greater chance of long-term scarring. And this could be particularly evident among industries with a large share of small- and medium-sized enterprises.’”

Let’s hold it right there.

Recall the two operating systems in the brain: (1) automatic and (2) conscious, postulated by Nobel Prize winner Daniel Kahneman.

Moody’s Analytics is making a factual observation. We don’t have to quarrel with the facts.

In other words, the pandemic is akin to a fire that we suffered. And why the blog spoke to an aggressive approach despite our economic managers declaring that we did not have the means to do so. And we bought into it.

Still, the world suffered with us. And this is where we need to examine the other operating system in the brain, i.e., the conscious one.

Let’s start with our economic platform. We are a consumption-service economy. On the other hand, our neighbors are investment-industrial economies.

In other words, our economy is very shallow and will readily succumb to a crisis like a pandemic.

Also, statistics 101 tells us that in a given universe, i.e., 90 percent of businesses in the Philippines are MSMEs, only a handful will demonstrate sturdiness. It is confirmation that our economy is very shallow and weak compared to our neighbors. And that is a fact confirmed by Moody’s.

If we push the envelope further, economies – both developed and underdeveloped – have MSMEs accounting for the bulk of the business sector. But it is not the MSMEs that carry the onus in driving the economy.

Recall that the blog spoke to defining our economic nirvana, not by our bias of a 6%-7% GDP growth rate, but by setting an incremental GDP of $200 billion. Why? That’s a real-world example of benchmarking – against our neighbors.

That is how much “incremental” economic output we need to beat the hell of our neighbors, including Malaysia.

To get there, if we remain a consumption-service economy, we need a thousand of our MSMEs to become one-hundred million-dollar enterprises. But statistics 101 says that cannot happen.

That is why we must move up from a consumption-service economy to an investment-industrial economy.

But, and it is a BIG BUT.

Juan de la Cruz can’t see beyond “inclusive.” We can’t ever prioritize — as in the crab mentality. And it boils down to where we are in our cognitive development. We know the world through our binary lenses.

Because we can’t look outward and learn from others – like our neighbors, i.e., inclusive is not a one-dimensional phenomenon. And our neighbors, by driving to become investment-industrial economies, attained “inclusiveness.”

The latest example is Vietnam. They are the regional manufacturing hub for Samsung smartphones and Apple AirPods.

In other words, they did not go it alone. They understood dynamism and interdependence.

Can Juan de la Cruz embrace a worldview characterized by dynamism and interdependence?

It is not if we stick to our caste system, i.e., to preserve hierarchy and paternalism – aka dependency.

When we come down to it, we confirm Rizal’s worst fears: He who submits to tyranny loves it.

Consider: We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy that ours is a culture of impunity.

Gising bayan!

Can we find the needle in the haystack?

Not if we keep the cobwebs in our heads. Why is Juan de la Cruz so “sabog”?

Think of our crab mentality; it dismisses the imperative of personal responsibility for the common good.

Yet, it is unsurprising given 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.

In other words, how can we explain our inability to course-correct? How often have we – in the chattering classes – raised that we can’t remain a consumption-service economy? That the OFW phenomenon and the BPO industry have driven PHL’s economy.

Unsurprisingly, beyond the Asian Tigers and China, Vietnam is the latest neighbor that has overtaken us in industrial development.

Let’s pause right there.

By the end of the Duterte administration, we would have wasted a dozen years pursuing industrialization. At the beginning of the Aquino administration, the blog was pretty hopeful about our chances of finally moving forward because of Arangkada.

But given the cobwebs in our heads, it isn’t surprising that we’re back to square one.

And it comes from our instincts. And why the blog keeps raising that despite our professed faith, we are yet to bridge the gap between Christianity and the reality of Juan de la Cruz: Democracy is the mirror image of Christianity, i.e., the imperative of personal responsibility for the common good.

The good news is that we are not alone.

Where we suffer is our inability to overcome our inward-looking bias. Our parochialism and insularity will explain why we remain the regional laggard.

And we won’t find the needle in the haystack if we can’t come around to this reality.

And how do we clear the cobwebs in our heads? If we care to look outward, we can learn from others.

Indeed, the haystack is a maze. Yet, our neighbors demonstrated that humankind could thrive in this universe despite its complexity.

For example, there are universal principles, if not laws, that can crystallize how to put method behind the madness.

Sadly, our model missed it totally and completely. Think of Padre Damaso. And why the blog asserts that we are the present-day Padre Damaso.

But then again, even within the Vatican, there are the conservative and progressive wings. Yet, the Vatican called out to the US bishops that the faith is beyond one-dimensional.

Sadly, we are the least able to comprehend that because of our instincts.

How do we put method behind the madness? Recall that the blog often refers to the dynamism of this universe. For example, the galaxies are in constant forward motion – that it is getting farther and farther away from planet Earth – and expansion. And if the Hubble telescope can’t keep up with the galaxies, how can we find a method?

Take the photosynthesis phenomenon. It is a very concrete demonstration of the dynamism of the universe, and not to forget, its character of interdependence.

Dynamism and interdependence: are these the starting point of finding the method behind the madness – of finding the needle in the haystack?

If they are, consider our instincts: We are parochial and insular. We value hierarchy and paternalism and rely on pollical patronage and oligarchy that ours is a culture of impunity.

Let’s again pause right there.

“Digital technology key to driving PHL recovery,” Keren Concepcion G. Valmonte, Beatrice M. Laforga, and Arjay L. Balinbin, BusinessWorld, 27th May 2021.

“THE PHILIPPINES should continue to develop digital infrastructure to drive economic recovery, as the coronavirus disease 2019 (COVID-19) pandemic helped accelerate digital transformation initiatives for both the public and private sector.

‘COVID-19 did more for digital transformation than executives did for their organizations,’ Ayala Corp. President and Chief Executive Officer Fernando Zobel de Ayala said in a keynote speech at the BusinessWorld Economic Forum. ‘Organizations should digitally transform themselves to remain relevant.’

“Digital transformation, which combines technology and a firm understanding of stakeholder needs, is indeed the way forward towards a more resilient, progressive, and equitable country. As we build a digital economy founded on reliable infrastructure, digital identity and access to services, and airtight cybersecurity, we all have much to contribute.

“Martha Sazon, president and chief executive officer of Mynt — the operator of GCash, said the pandemic highlighted the need for safe and convenient access to digital payments. GCash currently has over 40 million registered users as of April 2021, up from 33 million as of end-2020.

‘Because of the change in the conditions that we’ve seen, people must reimagine the business to service the customers in a way that will reach the customers even better,’ Ms. Sazon said.

“This was echoed by Boston Consulting Group Managing Director and Senior Partner Anthony Oundjian, who said that digital transformation, in the first place, does not start with technology.

‘I would say it starts with the consumer pain-points and the design of simple solutions to address these pain-points,’ Mr. Oundjian said.

“The rise in electronic payments in the Philippines during the pandemic could be an indicator that the digital divide in the country has narrowed, a World Bank economist said.

‘The digital divide may have narrowed in the Philippines given the increase in digital payments. Still, there is much catching up by aggressively breaking the barriers,’ World Bank Senior Economist Kevin C. Chua said at the “BusinessWorld Virtual Economic Forum through greater participation and investment.”

“Meanwhile, National Economic and Development Authority Undersecretary Rosemarie G. Edillon said the Philippines should loosen up its restrictions to foreign players in the telecommunications industry and make it easier for investors to do business to help the digital sector grow faster.

‘Fostering competition in the telecommunications sector could boost internet connectivity and lower costs,’ Ms. Edillon said, which will give Filipinos more access to the internet.”

What’s the bottom line? Indeed, digital technology is upon us. And just like “technology and innovation” in general, we must play catch up. And to leapfrog the effort, we must tap foreign investment and technology. Think of dynamism and interdependence.

But, and it’s a BIG BUT.

How come no one is talking about our economic platform – i.e., a consumption-service economy?

In other words, yes, digital technology will advance our consumption-service economy, but we will still lag our neighbors and be the regional laggard.

That is where our economists must educate Juan de la Cruz on the import of the “multiplier effect.” The multiplier effect is much more significant in an industrial economy, including creating far more and higher-paying jobs.

In other words, the reason Vietnam put poverty in the rearview mirror is that they leapfrogged industrial development. They are the regional manufacturing hub of Samsung smartphones and Apple AirPods – while we are still in chips.

On the other hand, if we are to be in chips, we better match the speed and expertise of the Taiwanese.

We cannot keep our heads in the sand. We must industrialize like yesterday.

Let’s pause once more and raise the familiar, i.e., NEDA’s Ambisyon natin: 2040 and Arangkada.

What if we move to version 2.0 of both these initiatives?

For example, instead of defining nirvana as a GDP growth rate of 6%-7%, we set it as an incremental GDP objective of $200 billion? Because that means beating the hell out of our neighbors, including Malaysia. That is a vivid way to explain benchmarking. We cannot be academic with the exercise.

Why? That will facilitate putting the method into the madness. Recall that we’ve had the 6%-7% growth rate for several years, yet we remain the regional laggard – because we’re stuck as a consumption-service economy.

Moreover, we must – sooner than later – overcome our crab mentality. And starting with an incremental GDP goal of $200 billion should impel us to prioritize. Think of the Pareto principle.

In other words, we must prioritize our top exports because they will have far greater chances of delivering much of the $200 billion. We cannot think of 50 industry road maps. That is too academic.

Recall the Ph.D. candidate I mentored: I will only assist you if you commit to employing the outcome of this dissertation to a real-world challenge. And she did. Today, she is the global marketing director of one of the world’s most popular brands. Many of us may even be using her brand.

But how did she do it when she’s not from the West? She showed her company that she could traverse the road from benchmarking against the world’s best to attaining state-of-the-art – and be the leading edge.

But back to the $200 billion incremental GDP.

Our economic managers and legislators must lead the efforts to identify the priority industries and products that will deliver the most extraordinary revenues. And then figure out the must-do policies and initiatives to attract suitable investments and technologies. In other words, CREATE and SIPP must come down to their most granular levels.

We have challenges related to infrastructure, including power and logistics, but if we can be laser-focused on our priority export industries, we can figure out the requisite infrastructures.

Can we find the needle in the haystack?

Not if we keep the cobwebs in our heads. Why is Juan de la Cruz so “sabog”?

Think of our crab mentality; it dismisses the imperative of personal responsibility for the common good.

Gising bayan!