Some people don’t understand how the world has changed
I’ve discovered a very silly letter in the ST Forums over here, and also found out that Kway Teow Man blogged about it first.
The questions asked by this lady reveal a very telling gap between the minds of the older generations, and the current reality of how the global economy works.
She first gives an example of the hardworking hair-stylist who works very hard and for far longer hours than the average Singaporean. She then questions if Singaporeans would be able to compete with such hardworking people from China and India.
Fact of the matter is, you can never win China or India if you compete in the same arena as they do, simply because they will price below you every single time. It’s like saying, oh, since the hairstylist in Guangzhou works so hard, I must therefore work twice as hard in order to win him, and so have a better standard of living. That is sloppy thinking. Factors like wages and cost of living have nothing to do with how hard one works. You can work like a slave and it would absolutely make no difference to your wage rate or cost of living. So how do we ‘compete’ with China and India? That involves a change in one’s mindset, which I will explain below.
The next example she provides is her niece,
Born in the 1970s, I witnessed the hardship of Singapore in the early days of nation-building. I saw how my uncles and aunties toiled day and night. Now, my niece, who was born in the 80s, has no qualms about changing jobs three times within a year. Her justification: Long working hours and unreasonable employers. She said she needs to live life to the fullest by spending less time on work and more time on more ‘fruitful things’ which, in my view, are leisurely, mundane things masquerading as ‘fruitful’.
I think its not difficult to see that circumstances in our present time is very different from the way it was back in the 70s. There is a difference between working hard stupidly, and working hard smartly. It is a fact that there is no such thing as an iron rice bowl or a ’secure job’. It is not unreasonable to expect employees to be as loyal to the company as the company is loyal to the employee, which is not at all. Why work like a dog until one is 45 years old only to be retrenched and replaced by young graduates who would be paid one-fifth of your salary so that the business can cut costs?
We have a very different global economy now from the way it was in the 70s. A quote from this book, via Marginal Revolution,
In an economy of stuff, the laws of property govern who owns stuff. In an attention economy, it is the laws of intellectual property that govern who gets attention.
The center of gravity for formal inquiry changes places too. In an economy of stuff, the disciplines that govern extracting material from the earth’s crust and making stuff out of it naturally stand at the center: the physical sciences, engineering, and economics as usuallly written. The arts and letters, however, vital we all agree them to be, are peripheral. But in an attention economy, the two change places. The arts and letters now stand at the center. They are the disciplines that study how attention is allocated, how cultural capital is created and traded. When your children come home and tell us that they have decided to major in English or art history, no longer need we tremble for their economic future.
If we try to compete with China and India in the economy of ’stuff’, we will always lose, simply because they will always be able to make everything cheaper and faster. The United States is the powerhouse of the world economy, because their cultural products can command your attention. In an economy where attention is the scarcest resource, it is those who can attract it, command it, and manipulate it who stand to win the most.
Think about it. Almost all ‘things’ in the world are made in China now, which is good for everyone because we all get to buy cheap goods. This however, points to the fact that ‘things’ ultimately are subject to competition by whoever can make things cheapest. One day, even China will face other competitors who can make things cheaper than they do.
But can China ever create Hollywood blockbuster movies? Can China create a music industry that spans the globe? Can competitors create cultural products which beat another on price? No. The simple fact is that differentiation between ‘things’ is much easier to achieve than between cultural goods. There might be a million and one models of cars out there, but they all ultimately do the same thing. Entertainment and cultural products on the other hand cannot be compared to one another simply because its appeal is subjective in nature.
So what is my point? My point is that the best way to compete with China and India is to NOT compete with them. Let them do what they do best. We must do something which they are not able to do. This is where spending time on ‘fruitful’ things can ultimately bear fruit.
AsiaOne - Political parties should address 2 strategic issues
The Kway Teow Man: Asking Good Questions
The Attention Economy: The Natural Economy of the Net
Marginal Revolution: The best sentences I read Sunday
Amazon.com: The Economics of Attention : Style and Substance in the Age of Information: Books: Richard A. Lanham
