Nature or Nurture

In the bible, Jesus talks about the parable of the sower and shared about seeds falling on different ground (Mark 4, Matthew 13 and Luke 8) and that gives different outcomes. The focus was on the grounds; the seed was the same across all of the grounds. But when the ground was different, it affected the growth and the development of the seed.

Yet it was what is latent in the seed that allowed that interaction with the ground to produce plants that bore fruits. And you know, all that crazy back-and-forth about nature or nurture is a false dichotomy at the end of the day. It takes nurture to bring out what is nature; and it takes latent potential to allow nurturing to do its work. What we need to do however, is to suspend judgement and not to allow tangible measures to overwhelm our sense of perception. We are better than that; teachers can see potential of students beyond just looking at their grades or getting them to take a test. But yet we prefer to fall back on the numbers.

In a society like Singapore where humans are the most important and valuable asset (read: not resource) that we have in our city state, we ought to start valuing people (not by their salary) and treating them as humans. We need to stop trying to measure potential and assume those potential will run its course to manifest in reality. Instead, we ought to be helping everyone grow to their potential without assuming what those potentials are. When we start believing in people, as opposed to mechanical systems; when we start empowering people to treat others as humans, to interact organically, we’ll place ourselves on a new growth trajectory.

Back to Normal

Normalcy is overhyped. Wishing things were going ‘back to normal’ is basically hoping to return to comfort zone. But we all know if that really happens it means we declined or stagnated, it means the point of the changes were not really taken in, growth was forgone in search for comfort.

We talk about ‘new normal’ as if changes should be once off, and things settle back in an ‘equilibrium’. I think we are capable of handling dynamics way more than our economic equations would care to suggest. Some things I observe in the retail business activities out there at large is interesting:

  • Takeaways are increasingly important for F&B businesses outside; but a lot of them are still sub-optimal in the way they prepare food to be packed and then sent out for delivery or for self-collection. This might be an area ripe for some disruption though the gains from it is uncertain.
  • Self-service checkouts are increasingly usual and more sophisticated as the machines tend to be able to detect the entire shopping basket of goods when you put them into the sensor area. Packaging into shopping bags appears to still be a bottleneck. For non-food places, this can work nicely (people can chuck products into their bags or just store-sold totes/paper-bags) but for food outlets, new solutions might be needed.
  • Dinning outlets might have to rethink their desire for quick turn-around of customers because of cost associated with wiped-down, etc. It might pay off for them to keep customer around longer, feed them with increasingly high margin foods (smaller portions, higher priced) – which is likely the drinks and the desserts (prepare a menu for after-mains). Better queue-management systems like from Haidilao that really gets customers vested in the queue would help.
  • Given more work-from-home, there’s more on-demand food delivery but would food-subscription based business be more efficient? Especially when one already suffer from decision-fatigue while working.

None of these things were ‘normal’ years ago but now they kind of are. And they continue to be evolving and changing. So what does ‘back to normal’ really mean? Nothing.

Career Maximisers

When we approach our employment, we can take on a very pragmatic, transactional approach. And it is the same on the other side; the employers can be transactional. They can come up with a HR policy that is attractive, that provides a “return on recruitment” and with good “management of talents” that allows them to utilise the talents and generate the outcomes for the organisation.

Then the individuals in these system can maximise their career outcomes, their profiles, their remuneration while offloading as much of their individual risks and taking credit for outcomes as far as possible. There will be innovation for the sake of staking a claim, planting a flag for one’s profile rather than genuine client or industry interest. There will probably be some greenwashing to skew external perception. There will be a lot of gaming the system when people cannot tell apart commitments from actual outcomes.

The world could be different if HR was different; if we are collectively less transactional about employment. Where we make use of our surpluses- in terms of savings, inherited wealth and be able to say no to transactional employers. We can choose only those who invest in their people rather than milk them. We can refuse to play the game that people are setting up. We can maximise not our careers but our impact, and create a future we want for ourselves and future generation through our work.

Thinking Carbon

Companies are going out there and committing to carbon-neutrality, net-zero and all that catchphases. I wonder if they really know what it entails or it’s a case of talking first and sorting things out later especially when the guy on top may not be holding on to his job by the “deadline”.

When Bill Gates tried to exit fossil fuel from his portfolio, he began to realise how hard it was. I think we only start recognising the difficulty or the ease of certain things when we start doing them. If we keep putting them off then we will never discover the true extent of the difficulty.

Take action now. Refine later. Instead of promising now and doing later.

Neighbourhood Malls

Satellite towns are going to need some upgrading: the neighbourhood malls require more amenities and services. There has to be more shops around the malls to provide alternatives and greater variety. Because working from home is probably here to stay. Besides the way we consume housing, the demands we place on our neighbourhood malls are going to change. We will probably shop more there and lunch options will need to be more varied, not just catering to students after school.

Shops in the major town areas including eating outlets are going to consider moving out into more residential areas, fragmenting flagship stores into local distribution points. There can actually be more combinations of online-to-offline business models with this change in landscape. Because a small shop in the neighbourhood is never going to rival the variety one can offer up in a flagship store, you want to allow customers to access the greater range of products through digital means either at the store or nearby so they can eventually consume at the store or bring it home from there.

Food options will have to go beyond the usual chain outlets and provide takeaways or delivery options with ease. Malls can start considering ways in which the last-mile food logistics can be better organised than having an army of grab delivery or foodpanda delivery men/ladies sitting outside malls. Perhaps some kind of central holding area where food will be pushed to for that mall?

Food courts can start simplifying their dinning areas (if they are not keen on having crowds gather and sit for long), maybe even combining kitchens to create cloud-kitchen type of setup.

The smaller scale amenities that may be a little “odd” or less consumer-ish such as the laundromat, dry-cleaner, money-changer, hardware shops can be organised around the malls. These outlets may need to serve people who are there for a clear purpose and don’t enjoy as much agglomeration economies.

Microgrids & resilience

Networks are powerful, they amplify signals and messages, create effects that anchor and entrench products and players. When we have a power plant and a network supplying power to a lot of households, we gain from economies of scale, the higher power available unlocks higher consumption of electrical appliances, increases our productive hours and amplify the wonders of having electricity.

It also means that if that power plant fails, you’ve a blackout. Not just you but across the network. Expanding the network, putting more plants on it enhances resilience to an extent – so much so we have taken our network’s reliability for granted.

But guess what, power networks are going to be less stable. Intermittent sources of electricity from wind and solar power, as well as decentralised generation of power reduces the predictability of power flows and makes it harder for the system to operate smoothly in matching demand and supply. Huge mismatches will cause outages and when that happens, can your decentralised generation actually help you? Do you have “island” capabilities on your microgrid?

A microgrid that has capabilities to disconnect from the main grid and supply itself is powerful – even if the supply is just to sustain the system for some time. That enhances resilience. In life as well, it makes sense to acquire another skill on the side, make friends from beyond work and save up significantly, to achieve this resilience. Too often we are silently being lulled into being dependent on the mammoth bureacracy and system built around us we think we don’t need the island capabilities anymore.

Consuming Housing

With working from home becoming a norm following Covid-19 pandemic outbreak, there’s going to be major shifts in infrastructure one might start to expect and consider as one thinks about entering a career in infrastructure. I’m going to share some thoughts on this particularly from the perspective of housing first and in the coming posts, maybe some other aspects.

Housing has traditionally been about proximity to work and also key amenities and that was what created waves of urbanisation right from the start of industrialisation. However, over time, as the industrial core and city centres became a little degraded, the patterns of housing moved out to the city fringes and even to the suburbs, giving rise to suburban malls but also transport lines, roads that connects the city to the suburbs.

In the case of Singapore, we’ve been successful in creating satellite towns to support housing needs as our urban core area becomes too unaffordable for ordinary people to live in, and the continuous refreshing of old spaces means it has become increasingly high-rise and land-use intensified. This intensification is made possible only through advancements in public transport and the ability to pull people from more satellite towns into this urban core where people work and also do some of their consumption.

With the pandemic and work from home, demand for housing that are sitting on transport nodes linking to city centres may fall a little; the desire for more space, and comfort might become more important. Cramming people into small shoebox apartments and encouraging them to be out of their houses (a la Hong Kong) might be increasingly difficult. I am looking forward to shifts in valuation of property though that change might take much longer to reflect in the property market.

Optimising on the frontier

I’m writing this purely from a theoretical viewpoint, and perhaps it can feed into practice and application but I’ve no intention to address that in this post. From a supply-side perspective, there’s no single optimal point of production combinations. The production possibility frontier involves a continuous combination of possibilities that would be “optimal” from a technical efficiency and resource availability perspective.

In Economics, the optimal point of production is obtained by specifying some sort of aggregated utility function – in other words, asking the demand-side of the picture. Figuring out the demand and specifying it is just as important as thinking about how to produce because it helps determine what is to be produced.

Yet day in and out we seem to act as though the market is always calling the shots, pinning down our behaviours. A society that is caught up with trying to produce more and more, and scaling up without understanding the demand-side of the equation will only find itself in misery. We cannot always assume our demand function or aggregated utility to behave in the same way, to comply with the kind of assumptions made in the Economics discipline.

Significant member

Does a society exist for its members or do the members exist for the society? Think of “significance” as the extent or ways in which members feel that appreciation and sense of being part of the group that they make up. The demand for significance have increased.

Wait, no the way significance is manifested have changed. Maybe it was an arms race after all, but maybe, it does not have to be. Members don’t have to be pit against one another for significance, they all can have significance.

So many of our systems have been built by drawing upon the resources and members of a society in order to help govern and maintain the society. These systems reward significance to those who are helping to lead and control (or maybe those people reward significance to themselves); but either way, the people who are ‘managed’ are often mere digits. They are called to work their way up to gain significance, to learn the skills to be a top dog, to lead and manage.

What about a world where all the members of society are rewarded with more significance by the leaders and so the members can themselves attribute more significance to the leaders? Where we as constituents don’t just say people are leaders because they make the cut in competence but above all, they care for the people.

Underinvestment in capital

Singapore is a small island state. We have no natural resources besides our strategic geographical location, as well as our manpower. And therefore, most of the value that we can try to create comes from being able to drive productivity growth from our manpower. And productivity growth cannot be seen as isolated within industries or sectors, but rather, integrated as a cluster of activities.

The mistake of looking at construction sector, or cleaning sector and say that productivity growth is lagging behind that of financial sector is the fact that investment trends in these sectors are different and quality of labour may not be evenly distributed. More significantly, as a result of those conditions, the bargaining power of labour vis-a-vis capital is also much more imbalanced. This sort of productivity slowdown cannot be easily dealt with through skills training.

Think about the incentives from the capital-side of the equation. With little competition from international capital to compete in the domestic sector (due perhaps to limited size and scale of the market), the businesses will tend to use labour as a means to put off capital investment as that helps improve returns on existing capital stock at the expense of labour productivity. Once you factor the uncertainties around return on capital, that will start to appear as a sensible move.

If this is the case of underinvestment in capital, then how would skills training improve the situation? What is being encountered is a labour force that might be worn out from poor quality capital being deployed (poorly maintained machinery, version 1.0 of an equipment for which version 10 is already available, etc).

Then moving on to my point about productivity cluster. Should the cleaners of a bank earn more than the cleaners at the construction site? With outsourcing, competition being encouraged at every segment of the value chain, this probably would not happen anymore. But is this really a good outcome? Because there will always be industries that are growing faster and extracting more profits from their activities, the supporting activities should also be entitled to a share of that windfall. This helps to speed up the expansion of growing sectors in an economy. This sort of cluster helps facilitate more real trickle-down effects.