Category Archives: Life

A few days back I wrote about my observations in Primark. There are simply products that needs to roll off shelves as soon as they are put on it for the business to work well and stay successful. And pricing contributes significantly to that.

Near my place, there’s always been a hot food stall that sells affordable hot breakfast food (for those who knows, it’s an economic bee hoon stall); they are incredibly successful with long queues every morning and they usually sell out right before or during lunch time. They start as early as 5.30am, and queues start forming from 6-6.30am. Unfortunately, some time late last year, they sold their business to another larger food company that runs multiple food stalls in neighbourhood coffeeshops. I heard it was because one of the proprietors fell sick.

In any case, after the company took over the business, they retained some of the previous partners but raised prices after renovating the stall. The food were not different but then because queues stopped forming, the food items were left on the display longer. As a result, they were less tasty, which reduced demand further.

Just by raising the price, the stall suffered a double whammy, the original model of selling made-in-time hot food broke down. The hot food stall became a mediocre stall in the coffeeshop. There are just some models of business that requires low prices; this is good for both the proprietor and the target pool of customers. When one considers raising prices, one must recognise that the pricing is part of the overall business model.

When I consult with businesses about various different new trends or emerging technologies in energy transition, there’s always the inevitable question of costs and when they will come down. For greener fuels in particular, there’s always the cost comparison against the usual fossil fuels. At the same time, for green electricity, there’s always the comparison against the grid.

I’d remind them that we have to be prepared that despite the learning curves and technological improvements, the cost may not come down sufficiently. In other words cost of the new greener technology may not be able to match the current cost of the traditional, more carbon-intensive technology.

But yet they might reach parity for other reasons. First, carbon price through taxes or emissions trading can raise the cost of the more traditional technology. Second, as players start switching towards the greener technology, there may be a reduction in scale economies for the traditional technology that also increases its costs. Finally, the producer of the legacy technology may also diversify their business towards the greener technology in face of public pressure which would make it costlier for those who need to find replacements for legacy components or parts.

Or there may be other problems and external issues that upset the current economics. The best example is the energy crisis around the world now with shortage of natural gas. It is almost artificially created but not any less real. And people are scrambling in fact to develop more solar capacity; and also faced with rising costs because of global supply chain bottlenecks.

Surprising but energy transition is being accelerated by rising prices.

It was interesting to frame an asteroid collision with earth as an analogy for climate change crisis in Don’t look up; but it is apparently a real potential disaster in itself and people at NASA are working on ways to deal with such crisis.

One of the points I learnt from the article is how it was actually difficult to realise there were pieces of rocks being hurled at us because of blindspots. And this mean we can discover them too late, probably in way shorter time frames than what was conceived in the movie.

And of course, if we are willing to spend that investment and work on defending earth from asteroids, let us also work out how to finance all that we need to do to defend earth from climate change as much as possible.

Real courage is being afraid but doing it anyways.

Oprah Winfrey

So there is really no such thing as really feeling brave; if anything it’s probably feeling some anxiety, and the tension of having to somehow suppress that and take action. And courage isn’t always about the big things or taking big actions. It can be just saying no. Or overcoming some internal resistance to take a small action.

But isn’t taking courage at odds with seeking security? Our desire to conquer nature in part stems from the desire to seek security. And so are the tendencies natural to us such as the desire for association, or even seeking some degree of security in social status. Where then would courage come from? How does it start? How does it form or take root? And how does it translate into action?

Courage probably isn’t exactly ever independent of the action taken that allows us to ascribe courage to someone. Courage is probably not something mustered within us as we describe in language. It exists not as a quantity but perhaps more as a description of the combination of action and circumstances. The thoughts and abilities to lead to courage then involves a story that we tell ourselves, one that takes down the desire for security, that disputes that instinct to be ‘safe’. A story that actually gives us something greater we yearn for in taking action.

There are shortcuts when outcomes and objectives are not properly articulated. Shortcuts can represent exploiting loopholes in terms of scoping the objectives. But they can also represent taking advantage of gaps in an establish system. Or perhaps, they are just a more direct path that is not yet obvious to the majority.

What comes to mind for you when you consider a shortcut? Is it about skipping steps? Or being able to achieve perfection on the first attempt? Or are you thinking about loopholes and how they are exploited? If a shortcut was offered to you, would you ask what’s the caveat? Or would you just jump at it?

So what are we trying to achieve when we even consider taking a shortcut? The shortcut is called that because it allows you to use less time, resources, energies to arrive at what you think is your goal, your objective. That can mean your original plan was sub-optimal, or that you’ve missed out something. Often the shortcut means some kind of savings. Or perhaps some kind of invisible (/deferred) costs? What is the catch? Is it really worth it?

In Andrew Yang’s book, Smart people should build things, he talked about how young people right out of school are being coached and lured into the high-paying consulting, finance or other professional jobs. And there are limited times when they get to actually work towards their dreams to build things that can change the world.

The fact is that having attractive options can indeed limit us and our pursuit especially when the attractiveness is measured not in the actual qualities that we care about. For example, most young graduates would obviously be keen to learn about different industries and they are right in thinking that going into consulting helps them do that. Yet after they cycled through different industry projects, they no longer value their place in consulting that way – their metrics start shifting towards the lifestyle that the paycheck can afford, how much they can save up, the recognition they get in the eyes of peers.

This is no different from the behaviour we have when we go into the supermarket buying so many different things other than the item we first thought we wanted to buy at the supermarket. For grocery shopping, that probably doesn’t matter because your fridge has sufficient capacity; but our work life don’t have sufficient capacity for many different jobs or roles!

Our jobs play very different roles for us in our lives and we ought to be clear what are the qualities we are choosing our job roles for. If we forget that, we might end up jumping from one boiling pot into another.

I’m really glad to see more debates and discussions about teaching, workload and the relationship between parents, teachers and the system. Having ministers speak on behalf of the teachers rather than just the system itself is also desirable. I think it is almost shameful the kind of expectations and issues parents of today are taking up about the education system, and getting upset with schools about.

I am actually not surprised that the coping mechanism of the school for not being able to explain to parents how their kids fell or injured themselves was to deploy teachers for corridor duties. It wasn’t about encouraging more responsibility and caution from students, it was not to empower prefects to write simple incident reports. It was to deploy NIE-trained teachers to perform surveillance.

But before even looking at the way the issue was being addressed, schools need to determine and decide for themselves where are the boundaries of the problem they are trying to solve and their responsibilities to the students. While the minister brought up a more complex issue on parenting, it is clear to me that the principal of the school in question did not know the boundaries of the school’s responsibilities. Perhaps the inability to push-back is due to years of the system pandering to parents. Or politicians just passing on requests and complaints to the civil servants without due regard for what are the critical issues at hand.

Either way, I see this as progress for our leadership at the education ministry.

Funny how I talk about seasons and cycles and rest; and then Covid hit me. Yes as it becomes endemic. And with this enforced pause that took place right after a vacation and whilst I was almost jumping back into work, I had the chance to reflect on more of life, work and rest. And here are some of my random learning:

1. Our attention matters a lot. When our attention is not present, we simply miss the moment.
2. When we develop a plan, perhaps it is more important to note down our intentions rather than how exactly we want things to be.
3. Make room for serendipity – it gives an addition meaning to the notion that opportunity favours the prepared.

Maybe I should have more pauses in my life – certainly not one forced by an illness. But my mind certainly cherish being forced to pause and just linger in existence.

Recalling the wonder of my first trip to the Primark store along Oxford Street in London was rather amusing. More than 10 years ago, as I stepped into the store and looked at the price signages, I was so incredibly surprised by the low prices. Being from Singapore, with little natural resources and gone past the stage of textile manufacturing industrialisation – clothes, especially the type you can wear out of your bedroom are not cheap.

But at Primark then, I could get a hoodie for £5, a tee-shirt for somewhere between £3 and £7; shoes for just £10 or £12. Today, the prices have probably gone up by 20-40% but that’s probably just inflation. These clothes were manufactured in Asia, mostly in Bangladesh and Vietnam, but even regular clothes sold in these countries may come at a higher price. I distinctly remember that the Cedarwood (a Primark brand) and TM Lewin shirts sitting in a store in Bangladesh (said to be selling factory rejects), selling at about $25 (around £22).

That reflects the sheer cost savings that comes from economies of scale, being able to manage huge coordinated logistics, of procurement, shipping, fulfillment, and distribution in-store. By selling a these prices, Primark pretty much guarantee volume sale, thus enabling the huge economies of scale. They try to optimise further by reducing packaging to the minimum, doing away almost completely with anything beyond the label and tags on their products.

And just like that, by pricing things low, Primark essentially create a strong flow of anchor business for the textile plant that needs business in emerging Asia. They are willing and able to keep running for Primark because in times when they don’t have so much orders, Primark is there; and when they have too much orders, Primark can step back a little. This flexibility is valuable to the plants who are looking to cover overheads and staff costs, maintain the skilled labour they had hired and trained. And so the value they create gets passed on to customers, and perpetuate the cycle that keeps them in business.

The world economy is not just in an energy transition or move towards lower carbon emissions. Given increasing automation and digitalisation, the demand for labour should be declining. Nevertheless, there seem to be a general shortage of labour all around. Perhaps it is an issue of skills mismatch post-pandemic. But many have also identified a few other emerging issues including the fact that people are quiet quitting or finding the existing landscape of work broken.

I don’t think people are not willing to work long hours. In fact people are working so much more than in the past despite the luxuries their higher income can afford, including more leisure time. The question is who and what they want to devote these ‘working hours’ towards.

It would seem almost hilarious that people deem it strange the new generation wants to have space and time for their own lives and side hustle. If we look beyond the cultural norms created in the boomer’s generation, it is clear that the direction towards greater capitalism, marketisation and the free economy is that people would be more cautious about how labour is being traded and delivered.

And perhaps that is exactly what is happening. We are finally recognising that the labour market has been broken and with the advent of technology, the solution is more freelancing, contract work and piece-based or scope-based compensation. No more over time or time-based pricing. No more self-worth being tied to your job titles. Everyone can be in the C-suite. Everyone can be their own bosses.

It already started when the corporate or career ladder was torn down one or two decades ago. Partly as a result of economic crises requiring ‘restructuring’ or ‘right-sizing’ of firms. And partly because of the perverse financial incentives pervading the frenzy of financial optimisation through spin-offs, mergers & acquisitions – all of which disruptions the more traditional notions of the ‘ladder’.

In any case, I think the new trends of the workplace are still functions of the direction we have been taking our economy towards: increasing adoption of technologies, reduction in contracting costs leading to the breakdown of the Firm (as predicted by Coase in his theory of the firm), fragmentation of markets driven by endless differentiation and specialisations. That in turn creates a force to reshape demand through marketing, advertising, culture-making – an aspect not addressed by economics but nevertheless driven by economic incentives.

We often forget that our culture is in a large part shaped by economics and incentives; and the doctrines and policy approaches we have taken shapes these incentives in profound ways.