Not Competitive At All

One of the highlights of my working life in corporate insolvency came from a meeting which involved one of Singapore’s foremost insolvency and restructuring practitioners. I was part of a team bidding for a case that was being held up in the American courts and my employer felt that it was necessary to rope in a “brand” name practitioner and so got this particular practitioner into the coalition that we were trying to assemble. Towards the end of the meeting, the solicitor who was trying to build the team turned to this practitioner and asked, “Are your fees competitive.”

At that very instant, the practitioner said, “I’m NOT competitive at all,” and he said so with a certain amount of pride.

I think of this moment and the way this man took so much pride in being “NOT competitive at all,” because it underlines one of the most fundamental aspects of doing business – price. One of my favourite clients said it best when he told me – tell me:

  1. 1.      What can you do?
  2. 2.      How quickly can you do it?
  3. 3.      How much will be cost me?

As someone who was inevitably desperate for the job, the answer to these questions were as close as one could get to the following:

  1. 1.      Anything you want?
  2. 2.      It was done before you even thought of it?
  3. 3.      Nothing at all.

Quite often, the most important factor in deciding who got the job, often boiled down to the third point. It is in the buyer’s interest to get away with paying as little as possible and the seller will inevitably try to show that he or she can give the buyer the price that he or she wants.

If I look back at my freelancing days, I realise that I had one key advantage over my competitors, who were inevitably sizeable companies – price. I could do the job at a certain standard at price that my competitors could not do. When I took my last big job in the industry, I was presented with a quote that the client had gotten from a multinational and was told – “It’s yours if you can do it at half the costs.”

I was hungry enough to agree and we ended up settling at around 40 percent of what the competitor had quoted. However, while I had won the job on the third point, the client had high expectations about the first point. I was expected to deliver coverage on a multinational level without the multinational team (which would have required a budget). I managed to deliver the expected results at the expected budget (so much so that they told me to invoice and paid on the spot) by working through a relationship that are not commonly used by conventional practitioners.

Business is inevitably about balancing points one and two with point three. The adage is that success inevitably boils down to being able to be “good, fast and cheap.”

I’ve noticed that national economies, particularly the Asian ones do something similar. Japan, the most advanced economy, built itself up by being able to make things cheaper and better than the West. Gradually, as prices rose in Japan, manufacturing moved to South Korea, Taiwan, Hong Kong and Singapore.

Being able to work cheap has done wonders for Asia. Millions have left poverty because we were able to give the multinationals a cheaper alternative. This went into hyperdrive when China started becoming the world’s workshop and India the back office.

However, while price is often an important factor, I have to ask if this is sustainable, particularly for the mature economies like Hong Kong and Singapore. Our politicians are particularly fond of reminding us that in order to stay competitive in the global economy, Singapore needs to be competitively priced.

I don’t think they’re wrong to suggests to say that Singapore needs to be “competitive.” We are a pipsqueak island with no domestic market or resources. Our larger neighbours have more to offer and so we got to be on our toes and constantly find things to offer the world.

While I do understand that we need to be competitive in the global economic arena, I do question if the “need to be competitive,” is becoming an excuse to justify unacceptable practices, especially when it comes to making life better for the poor and needy. Just think of the two most common instances when the need to stay competitive is brought up to stop a discussion. They are inevitably:

  1. Having a minimum wage – common argument is that this will make us less competitive (read cheap) and therefore our economic system and well being will collapse;
  2. When it comes to slave labour from South Asia. Once again, the common point is that if we gave the slaves a dollar an hour more (and actually gave it to them) and got them to spend an hour less in the sun, our infrastructure costs would sky rocket and our economic system would collapse (believe it or not, even when Covid-19 was showing us very clearly that slave hovels were endangering the rest of us, there were people fretting that improving the lot of slaves would endanger our economic survival).

Shouldn’t it be clear by now that a mature economy like Singapore’s can no longer compete on being cheap and we need to reinvent our focus on being good instead of being cheap. This is not to say that price will not be an important factor – merely that we need to compete on something other than price.

I go back to my freelancing experiences and the insolvency practitioner who is proudly not competitive. I competed on price because I went to look for my customers. The insolvency practitioner has reached the stage where customers look for him. He does not need to be cheap. He does not need to do every job to stay alive – merely the ones that pay very well.

There are examples of this. The most famous example of Apple, which designs products and reinvents the way we do things. Apple is an example of a company and business that creates our need to need their products. This is an example of what type of business Singapore Inc needs to aspire to.

Unfortunately to be good, you need to pay and this where Singapore needs to get away from its obsession with “cheap.” Let’s face it we will never make things cheaper than China or 3D printing or do back office work cheaper than India or AI and that’s even if we give away factory land away and exempt foreign multinationals from paying CPF contributions to locals.

Our economic role models can no longer be other developing countries. I think of the German model as an example. Germany has one of the highest hourly wages in the world:

https://worldpopulationreview.com/country-rankings/minimum-wage-by-country

Yet, at the same time, Germany is also the third largest exporter in the world. Germany with one third of the population of the USA and not even 10 percent of China’s, competes in the global market.

https://en.wikipedia.org/wiki/List_of_countries_by_exports

What does Germany export? It exports good quality products. The ones that come to mind are Mercedes and BMW, which are known as some of the best cars in the world rather than the cheapest:

However, there are others. The German economy or Europe’s largest and the world’s fourth largest, is driven by SME enterprises that specialize in unique goods for very niche industries. I think of the Rational Combi-Oven that every chef I’ve worked with used to drool over as an example.

Isn’t it time we moved away from trying to be the world’s cheapest for the world’s big boys? Why can’t we be proud of being good and not being embarrassed of getting the world to pay for Singapore Inc’s products what it pays for that of the West.

We’re a small economy but in the interconnected world we live in, there’s no reason why we can’t do big things on the world stage? Surely this is something the government should drive us towards.

 

 

Tang Li

*Although I’ve been based mainly in Singapore for nearly two decades, I’ve had the privilege of being able meet people who have crossed borders and cultures. I’ve befriended ministers and ambassadors and worked on projects involving a former head of state. Yet, at the same time, I’ve had the privilege of befriending migrant labourers and former convicts. All of them have a story to tell. All of them add to the fabric of life. I hope to express the stories that inspire us to create life as it should be.

 

 

yyy
SPONSORED ADVERTISEMENT
Loading...

18 Responses to “Not Competitive At All”

  • Agreed:

    Agreed.We should aim for a decent pay for our people.
    Now the bottom group are paid too low…need to make move up their wages while the top should be reduced.The gap is just too big now.

    GD Star Rating
    loading...
  • xoxo:

    We have the most daft gahmen.
    We train n educate our PEOPLE and then UNDER-USE their potential.
    We have a govt that insist SGS ARE NOT UP TO THE TASK JUST SO TO FULFILL THE DAFT FTAs they ink with other sovereigns?

    This govt is indeed daft beyond imagination!

    GD Star Rating
    loading...
  • Lost:

    As usual, lots of self praise, name dropping and lots of meandering. Lost track. Showcase his cost competitiveness and end up asking Sg to be not price competitive. Where’s the logic or connection?

    Just like the previous post about the Australian professor. Talk about people born in Sg, grown up in Sg, and willing to come back without costing taxpayers. But showcase some guy who is none of that, i.e., not born in Sg, not grown up in Sg, no NS, and costing lots of taxpayer money coming back.

    GD Star Rating
    loading...
  • Prof Wei Shin YU:

    Japan and Germany go for niche markets and develop niche technology, apart from providing quality products. In niche markets/technology, one can ask for much higher prices.

    We need to identify niche markets commensurate with our industrial-base and develop a National Master Plan to capture it. But can our research institutes deliver market-ready niche technology? Such R&D often does not lead to high impact publications.

    GD Star Rating
    loading...
  • Harder Truths:

    tang Li

    Asians use the production factory for whatever they do. Be it law, medicine or any so-called ‘profession’, it is just a copycat cut-and-paste from a western country. The only difference is there are no real professionals – only production workers masquerading as such, who can easily be replaced by cheaper & faster newcomers.

    This is $G’s success story – the real one. Look around you and tell me anything that is done professionally or with skill. In Europe the tradespeople are proud of their craftsmanship. Here it is how unskilled a person you can get away with to finish the job and not pay for the shoddy work.

    Let’s not fool ourselves – $G is nothing like a first world city in the way work is done. By Anyone. Production line mentality cannot be hidden and neither can the island go far with it.

    GD Star Rating
    loading...
  • Sojoürner:

    Germans export engineering solutions but are politically inept on the world stage, have no influence in the global financial order (which is dominated by New York and London). I don’t think that essentially getting rid of industry in favor of financial services like some countries did is sustainable in the long run and on export. The latter is to some extent unavoidable – there is only so many pieces of specialized machinery that are needed in one country the size of Germany – although more could be done to boost internal demand (e.g. increasing salaries).

    The foundation of the German economy isn’t automobile manufacturing, as this article seems to ascribe. The foundation of their economy is the German workers. Technology and society changes over time, as history shows us. Societies that remain flexible in the face of inevitable change are the ones that will prosper. Societies that cling desperately to old technology and old thinking in the face of change are those that will suffer.

    They have ravaged other European nations with unfair trade, subsidized domestic industries, control of the E.U. and euro, loading other European nations down with massive, usurious debts, etc. And have devastated southern and eastern Europe with these predatory trade and financial and economic policies inflicting misery via double digit inflation, double digit unemployment, bankruptcy, shredded social safety net s and more taxes to pay off the German banksters, etc., etc.

    Change is a fundamental force of nature. Trying to pretend one doesn’t need to change is a surefire recipe for economic disaster. The worldwide crisis in the automotive industry is intensifying. In Germany, this development is taking on particularly blatant forms.
    The demand for automobiles is falling caused by high unemployment and falling wages. So the car producers respond by reducing the number of employees and cutting wages.

    First of all, Germany is the second largest export economy in the world, so a decreased global demand will hit Germany relatively hard, as it brings the eventual impact home, but the issue is one that faces the entire auto industry. The net number of jobs lost (those lost minus new jobs created) will be significant, particularly for the production workers, and there is the risk that the new jobs will not pay as well.

    German economy relies relatively heavily on industry (not wrong per se)- Relying heavily on export implies of course that if the world economy tanks the German economy does so as well (or even more so).

    GD Star Rating
    loading...
  • Tracey Ching:

    This writer should know better from his own revealed personal history. He claimed to marry a Singapore woman and then got divorced and then married a Vietnamese woman. Is your Vietnamese Wife:
    1) Cheaper; 2) better; 3) meet your needs……Tio Boh?

    GD Star Rating
    loading...
  • oxygen:

    LIM HN KIANG, former Trade Industry Minister practically told the world that “we are a first world country paying third-world wages.”

    It was all published in PAPpynews Publishing media.

    His “mate” promised peasants “Swiss standards of living” but we now got, instead, is Swiss Costs of Living.

    HILARIOUS.

    GD Star Rating
    loading...
  • Prof Wei Shin YU:

    Moving up the technology ladder to stay competitive:

    Recently, I was invited to attend a furniture machinery fair in Guangzhou.
    I was shocked to see how sophisticated the fully automated systems are, that can operate 24/7 with minimal manpower, all developed by China’s automation and robotic companies. They can easily rival the European machinery manufacturers, but at a fraction of the price!

    Traditionally, this furniture industry used to be very labour-intensive, but now things have gone automation and 24/7. Now I know why the western-style furniture we buy in Guangzhou is so cheap!

    So the competition is now on 2 fronts: China’s quality furniture, and China’s automated furniture machinery!

    However, China’s automation and robotic technology still cannot handle soft materials, e.g. fabrics, carpet tiles, or sew cushions, seat covers for cars and airplanes, or to stick solar films on roof tiles or glass panels.
    So they invited me to discuss collaboration using our patented technology (www.appliedrobotics.com.au)
    Maybe the SG airplane seat cover factory is interested?

    Yours

    A 60+++, stupid people, arrogant, ex-Singaporean who regrets “grass is not greener on the other side”

    GD Star Rating
    loading...
  • Sojoürner:

    Today, companies acquire patents under federally funded research, and then manufacture abroad using that technology. Why does Germany have a trade surplus when their labor, taxes and social programs are all more expensive? How do they pull this off? Government services and investment in industrialization, energy, healthcare and education. China will be doing the same on a far grander scale

    In short, to be more like China, look at it from the Chinese side. Well this hits exactly on why China is on the rise as a world power and the west is in steep decline. The much-vaunted “division of powers” in the American system means that long-term planning and indeed any infrastructure spending is practically impossible. Whereas China can make a 20-year plan and throw all available resources behind it. What’s at stake is the value of two competing political philosophies…Because the U.S. views anyone who can match them in manufacture ring, R&D, any new technologies as threats rather than competitors.

    China headed by President Xi Jinping worries about a different order of priorities. He wants China to become technologically a master in core areas like microchips, operating systems and other critical technologies. He understands that science is the logical route if it has to achieve technological dominance. Early in his Presidency he realized that power of Western nations is due to technology. He observed “Advanced technology is the sharp weapon of the modern state”. China is pursuing its Make in China 2025 goal with vigor and dedication.

    Japan, Korea, and China are very good at “productizing” technology. If you want to turn out 50 million flat screen TV’s at $200 a pop, with a manufacturing staff of 12 people managing a robotic assembly line, go to Asia.

    It really comes down to individuals, and China has the money to hire US tech leaders to come and work in China; promising them more funding and bigger lab facilities and staff. The main issue is choice and competition. When the technologies are held by a few companies in US, US government will not hesitate to use its power to maintain the monopolistic positions of those corporations and use those power to its advantage, as we can see in recent treatment of the Chinese tech company ZTE.

    The Chinese are determined to go their own ways as lots of US products are off limits to them because of export ban on the one hand. And on the other and high tech products from US carry a potential security risk since the Snowden revelation. And the “Made in China in 2025″ is just the latest incarnation of this effort. Good for them. Competitions are good, even at the expenses of its’ own monopolies.

    GD Star Rating
    loading...
  • Taiwan Big Corruption:

    Dear Tang Li, you said : Unfortunately to be good, you need to pay .
    =======================================================
    Exactly … but Opposition had no solution except want our PAP PM and MP to be cheap, if not work for free so that they opposition themselves get more.

    You want best and good quality person to step forward to volunteer for the nation, you better pay higher salary.

    Hard Truth :
    Hong Kee Nurse : Money too little, Not worth sacrificing for Hong Kong
    Watch : https://www.youtube.com/watch?v=vvZ5C1WrH0E

    Otherwise, Singaporeans will be like the above Hong Kee nurse, money too little so not worth sacrificing and no one will step forward. Worst, they get corrupted like Taiwan DPP MPs.

    You want good quality Iphone, you pay more and buy Apple(PAP).
    You want poor and lousy quality clone Iphone, you pay and buy smelly and unclean China Hiphone.
    Watch : https://www.youtube.com/watch?v=RzYGQuzhR2c

    GE2024.PAP.Guarantee.Win.Again
    Majullah $PAP$ $PAP$ Huat$ Huat$ Huat$
    Lazy Singaporeans must be Cheaper, Better, Faster

    GD Star Rating
    loading...
  • Prof Wei Shin YU:

    Tang Li’s post is about SG not being “COMPETITIVE”, and we should take this opportunity to collectively think about what can be done?

    As I said earlier, I believe the solution is to IDENTIFY the NICHE commensurate with our industrial-base, and then develop the required technology accordingly.
    For examples:
    1. In another track by Tang Li, I mentioned our Multifunction Robotic Wheelchair System. The niche was identified by 5 nursing homes, to significantly reduce their manpower shortages (e.g. reduce elderly bed transfer manpower from 2-3 to 1, and reduce falls and OHSA injuries)
    – so that the nursing homes can now afford to pay SG workers more and improve their service quality (– comfortable transfer, reduced falls and injuries)!
    2. Robotic Lower Limb Rehab System developed at NP and clinical trialed at TTSH successfully for sub-acute and chronic stroke patients,and for falls-prone elderly. The niche was identified collectively by NP, TTSH and me during my PhD(Medicine) study.
    3. My semi-automated roast duck (and braised duck) system, patented in China and SG. The niche was identified by Dr Yong, a seasoned restaurant operator in Shanghai and later in Peoples’ Park. Instead of 1000 ducks per day using the traditional manual method,this system can process 1000 ducks every 4 hours, using half the labour and 1/3 the factory space.
    The reduced processing costs will allow the SG workers to be paid more, enable hawkers to sell duck rice at $2.99/plate and make $1.00/plate,(- instead of the reported $0.30/plate?)
    To invent this patent, I studied all the relevant patents in China, spent 12 months experimenting and discussed with the top roasting oven manufacturer and the top poultry processing system manufacturer which supplies 75% of all eqt in S.China and HK.
    In addition, I also learned the secret recipes for roast ducks and braised ducks from a top chef in Guangzhou.

    Incidentally, the Chinese Gov actively encourages pateting:
    1. It costs RMB7500 to file a 20 year patent by an individual, and about RMB1500 by a registered co. (vs S$20k in SG).
    2. If the patent holder then seeks the same patent right in SG or any other country outside China, it will cost about S$7500 for each country.
    3. The Guangdong Provincial Gov may reimburse RMB10k – RMB20k for each country outside China.

    China cities are fighting against each other to attract FT. My friend was given a 4-room apartment (yes, free of charge) and $150k/year salary for 3 years.

    GD Star Rating
    loading...
  • Sojoürner:

    What we really need is the simple fact that there are core terms defining SG’s economy and society that need to be clearly defined for the current realities of our time. “Monopolies”, “capitalism”, “competition”, “creativity”, and “Innovation” are bandied about as if we all had a common understanding of their individual meanings and relationship to each other.

    Until this nation understands this and embraces it, we will only become less creative over time. An important corollary about the competitive system. It’s not just the competition, but it’s about how the rules are set to measure success. Niche ‘monopoly’ is created that attempts to prohibit competition.

    Competition is the necessary element to secure our best outcomes, BUT, collaboration is the necessary endpoint for the evolution of an individual’s competitive striving. Somehow in that evolution individuals must learn to compete with the ideal best outcome possible for the individual’s specific behavior. Perhaps developing something like “collaborative competition” is what is needed.

    Society benefits from the new innovation, and thus this form of risk-taking should be encouraged, which it is through the granting of patents, license, trademarks, etc.

    My many years in venture capital taught me that brilliance and creativity are necessary for success but only in the rarest instance, sufficient. The more proven, more probable route to success matches entrepreneurial creativity with an in-depth knowledge of a target market. That takes time and effort.

    Developers who understand customer needs have a much better chance of success. Understanding the quirks of a market is hard work, takes time, and often takes entrepreneurs into unfamiliar territory. It is no accident that in its heyday, Hewlett-Packard required that all lab managers spend part of their career in marketing before taking the reins over product development. For many entrepreneurs, getting to know the difficult terrain of a target market is no where near as exciting as designing gee-whiz products that will somehow magically fly off the shelves.

    In the dawning information age, creativity indeed will create more value than competition. Competition, in fact, is not an unalloyed good. Competition has trumped value-creation. In this and other ways, the competitive arena undermines innovation. The competitive track rewards thinking like the teacher/professor/authority, who sets evaluation parameters based on what made them successful. Creative people need an alternative to that self-perpetuating sclerosis.

    GD Star Rating
    loading...
  • Talent and innovation:

    Need to promote talent and innovation in Singapore.To create good jobs for Singaporean.
    Create a good environment and incentives for it to grow.We need real talent,even FT.
    Also need to address the issues of employing our talented jobless elders.
    Our companies including Government /GLCs do not give them a fair chance…not even a interview.Sad but true.
    Waste of talent and national resources.

    GD Star Rating
    loading...
  • Prof Wei Shin YU:

    Sojoürner: “Perhaps developing something like “collaborative competition” is what is needed.”

    I remember reading that when Japan discovers a “niche technology” void, the Gov formed a consortium with the key industries. The industries would post their technical experts to the R&D team, on a rotating basis. When the R&D was completed, each co. will use the “niche technology” to produce new products and compete against other in the open market! This is “collaborative competition”!

    Q: How do we do this in SG?
    But even more important, what/where are the “niche markets” and how do we train our young professionals to find them?
    This is even before we consider what kinds of “niche technology” are required and how we teach/train them in univ (by non book-engineering professors)!

    For the “niche markets”in SG, apart from the food industries and disabled mobility/aged care arena, I can see a few, such as automation of:
    Shipyard operations,
    Ship hull cleaning/repainting in situ in ports or during voyage,
    Sewing of car seats/jeans/furniture covers,
    High rise cleaning of crude oil storage tanks, HDB apartments, hotels, etc
    Rehab of lower limb (esp. post stroke), spinal injury, falls prevention or heart problems

    GD Star Rating
    loading...
  • Sojoürner:

    Prof Wei Shin YU: Q: How do we do this in SG?
    But even more important, what/where are the “niche markets” and how do we train our young professionals to find them?

    Hi, I take your point, but education does not equate with creativity nor an understanding of what is needed in the marketplace. As a non-engineer, I came to realize a long time ago that there is a role for the generalist or specialist in technology in seeing needs and helping to develop them and bring them to market.

    The United States is the envy of the world in this regard and people in Europe, including the top leadership, continue to look for the “secret sauce”. China also has the best school systems in the world, by a considerable margin. The model was established by Shanghai and is now being copied throughout China.

    Currently there are about 300,000 Chinese students studying in American universities. Another 160,000 Chinese students study in Europe and other parts of the world, of which close to 60,000 are in UK. Add that to the top-rank students who study in Chinese universities but could not go abroad, the focus on education to fill the R&D pipeline should yield good results. The question is whether students in countries like Singapore are keeping up. This does not bode well for future when A*STAR our Agency for Science, Technology and Research is populated mainly by research professionals from US, Europe, China, Asia et al.

    GD Star Rating
    loading...
  • Prof Wei Shin YU:

    Dear Sojoürner, you wrote:
    “Hi, I take your point, but education does not equate with creativity nor an understanding of what is needed in the marketplace. As a non-engineer, I came to realize a long time ago that there is a role for the generalist or specialist in technology in seeing needs and helping to develop them and bring them to market.”

    Thanks, and I could not agree more. The Q now is, how, as a nation, do we educate/train our young to become a generalist and have a “helicopter view”

    For a start, I think it helps tremendously:
    1. If professors have industrial/commercial experience, and teach using real-life examples: problems and solutions.

    2. Univ do not just assess professors on their publications, but even more on their practical solutions to society’s problems (–like in China now).

    3. Courses like Operations Research teach students how to discover “order” from seemingly chaotic every day life. (I was Snr OR Analyst at Qantas Airways in Sydney for 6 years,before coming to NTU to pioneer the course in 1984).

    4. Entrepreneurship courses at under and post grad levels which I also pioneered at NTU, and invited speakers from Walden Mgt (which I was advising), etc to enlighten the students.

    5. Experience of living in Western countries, and learn their way of thinking

    6. To teach students to have an eclectic mind-set.
    My 1st PhD supervisor’s PhD was in Civil Engg. But he became international consultant for hydro-electrical generators and then expert in Manufacturing Systems and Robotics guru. He also listed a share forecasting/trading co. in London stock exchange.

    Influenced by him, I too became a generalist:
    I worked as hospital engineer and steel mill project engineer in NZ,
    Snr OR Analyst in Aus, studied clinical psychology, physiotherapy and then at 57,I enrolled for PhD(Medicine).
    And now, together with my PhD univ mate Dr Wong, we are inventing a series of Multifunction Robotic Wheelchair System, to relieve the burden for sufferers like Lee WL and Chia YY; plus reduce the reliance on foreign workers and falls/ injuries in our nursing homes and hospitals, and even in HDB/condos.
    We will be ready to appoint agents internationally in about 12 months.

    Also after 2 years of research and experimentation, I filed an auto roast duck (and braise duck) patent, which integrates the French method of slow cooking, and reduce the processing time to only 3 hours, etc. It has made all existing China roast duck patents obsolete.
    The next step is to start a flagship shop in SG and Sydney, then franchise worldwide.

    GD Star Rating
    loading...
  • Sojoürner:

    Prof Wei Shin YU,
    Thank you for engaging me. It bequeathed great insights to our conversation and I wish you well in your all your endeavors.

    GD Star Rating
    loading...
Member Services
Self-SupportMembers LoginSelf-Support
Sponsored Advertisement
Search On TR Emeritus
Sponsored Advertisement
Announcement
Advertisements
Visitors Statistic
Latest Statistic
Advertisement

UA-67043412-1