Tag Archives: attitudes

Structures, systems, brain work

There is fundamentally a tension between bureaucratic structures and human judgment. The reason for such structures is to reduce the need for, and also disperse the responsibility of judgment. Often, it tries to aggregate wisdom but sometimes at the cost of creating more inertia for action.

Bureaucracy starts with good intentions: create systems and structures to minimise errors, repeat proven actions by making them a matter of policy, and prevent potential rogue players from having discretion. And potential rogue players within the system mean just about everyone. Yet it promotes conformity and compliance.

The ones who would break the rules and create wins won’t make the cut for promotion if they go too far with rule-breaking. Often, structures prevent them from going far enough to end up with wins. Those who do would probably cause loopholes to be closed up anyway.

But bureaucracy allows you to swap talents for mediocre hires, especially in highly stable environments. Take the example of infrastructure financing; the early pioneers of project finance did the hard work, used their brains to work out the risks, quantify them and set up best practices. They created financially viable structures matching the underlying needs. The ones who come after just copy their templates, sometimes even without completely understanding how the risk management or control works. They are trained more for pattern recognition and for finding market deals that work for the structures they create. This still brings value to the system, and they are rewarded for this stage of industry development. So, more people who can match the patterns will rise within the system. Those who actually think thoroughly about the risk and keep trying to innovate get stuck in the middle. Even if they stick around long enough, they do not have the chance to get their innovation pushed through the system.

New kinds of infrastructure are overlooked because they are “too hard,” when it’s easier to find what fits in the market or wait for the next deal. And so the previous innovation that succeeds cannibalises on future innovation. And the structure to scale up and deliver greater success on something that works inhibits successes of different variety.

Could it be that Singapore is running up against such an issue?

Arguments for renewable fuels

As part of an assignment for an online course, I developed an article arguing for the role of renewable fuels in the low-carbon economy of the future. I reproduce the full final draft here for my blog readers.

Climate change is a real, global catastrophe that needs urgent and immediate action. 2024 marks the first full year of warming above 1.5 deg C, determined by scientists as the climate change threshold. The Paris agreements were designed to ensure that the long-term average temperatures towards the year 2050 do not exceed this threshold. Breaching this threshold portends irreversible ecosystem damage and more dangerous climate conditions worldwide.

A huge part of climate action involves decarbonising our energy systems, which are responsible for nearly 90% of all anthropogenic carbon emissions. The rapid deployment of wind, solar, hydro, geothermal, and combined with giant battery energy storage systems and pumped hydro energy storage systems, is supporting the decarbonisation of electricity grids and systems. While they are aiming to displace current fossil fuel-based systems, running on fossil coal, oil and gas, there are severe limitations and significant. Only about 20-22% of final energy consumption takes the form of electricity, which means that direct fuel consumption is still the main approach for the consumption of energy.

The solution to this conundrum is renewable fuels; first in the form of biofuels and, subsequently, a combination of biofuels and synthetic fuels produced through various chemical processes, some of which involve renewable electricity as well. Renewable fuels are not transition fuels. They will continue being carriers of energy in the future and serve as an important decarbonisation solution for industries that need to be supported and scaled up.

Renewable fuels are an essential complement to renewable electricity. Not all energy users are served by the electricity grid. The majority of the transport sector, as well as heavy industries, rely on fuels because of mobility or scale requirements. While battery technologies are catching up and have experienced a phenomenal decrease in costs, there are still operational limitations for many use cases. Long-haul heavy transport, due to its energy consumption and mobility, does not lend itself to battery systems. Therefore, even with electrical power production completely decarbonised, significant energy consumption in fuels will still need to be decarbonised. Renewable fuel represents such a solution that will enable low-carbon aviation, maritime transportation, mining and steelmaking to give a few sectors as examples. These sectors are not going away; they will play vital roles in the low-carbon economy of the future.

Renewable fuel contributes to energy resilience and security for countries and industries. Electricity cannot be stored for the long term across seasons except in pumped hydro storage, which requires specific geological features that are not present everywhere. Producing renewable fuels and storing them enables much longer-term energy storage, which can contribute to energy security in times of instability or when supply disruptions occur within the electricity system. This is because fuels are much more stable and transportable, and energy can be released on demand. For example, data centers’ backup power could be a huge battery energy storage system but without an additional source of energy, the batteries would eventually drain down to zero. Renewable fuel can be continuously supplied to the site, and power operations can be operated continuously.

There may be the view that once everything is electrified, only solar, wind and other renewable power generation sources are needed. As mentioned, renewable fuels provide an essential source of energy for mobility and several other sectors that are challenging to electrify and would still require fuel as a backup and for resilience. Moreover, renewable fuels are molecules used not only for energy but also in other chemical industries as chemical feedstocks. Dealing with climate change will require a shift away from fossil-based chemical feedstocks towards low-carbon ones which can be unlock from renewable fuels.

Recognising the role of renewable fuels in the climate transition is just the first step. The next would be to call upon policy actions, advocacy and industrial adoption to ensure the commercial viability. Renewable fuel technologies are available and established. To get to palatable levels of cost for the market, world-scale production needs to be established. That will require industries and energy users to provide unequivocal support for adoption. This is can only be possible with strong policy action to price carbon emissions, mandate blending and adoption; driving demand expansion serves also to expand production and enable economies of scale necessary to make renewable fuels a cost-effective solution for decarbonisation. The low-carbon future is not possible without renewable fuels; and renewable fuels will not enter the equation without policy action.

Crowding out

In economics, there is this concept of crowding out when government spending drives out private sector spending because it soaks up available financial capital and drives up interest rates.

In Singapore, I think there is some kind of political and psychological crowding out. We have grown to be a hyper-meritocratic society and we are proud of it, believing that it is the best way of organising ourselves and our systems. And we rarely talk about the injustice perpetuated by the system because we don’t want to undermine this part of the cultural fabric.

Yet we are confronted with the reality of inequality in the society, where students from underprivileged families are expected to be measured and assessed equally before an examination in school with their peers who had better backgrounds and well-resourced parents, tutors and even siblings. How do we respond to that? Do we just say, the system will take care of it?

In many other societies, private charities, foundations and many other organisations step in to help. In Singapore, we almost think that it should be the government’s role. How many of us would think it is a gap worth bridging? How many of us, would think it’s the problem of school teachers, and try to load it on to the public service?

During PM Wong’s National Day Rally speech this year, he talked about some ground-up initiatives and community organisations, giving great examples of how we want to nurture the Singapore Spirit and encourage Singaporeans to step forward to shape the character of our society. He acknowledged that the government cannot force or direct this, but to encourage, recognise and celebrate.

And then he talked about this tension between the government and the people sector:

In many countries, you see such ground-up collective actions because the governments are not working, the governments are ineffective. So people are frustrated at the lack of action and progress. And they step forward to take matters into their own hands.

Singapore is in a different position. No one wants the government to do less. No one wants the government to become ineffective. Instead, we strive to be more efficient and responsive. And there are areas where we believe the government can and should do more – especially to provide stronger social support for those in need.

But it is not just about what the government does – and we certainly do not want to end up as a society where people rely solely on the government. It is about all of us – government, businesses, workers and unions, community groups and civil society – doing our part. All coming together for the good of Singapore and our fellow citizens. And moving forward together as one.

I think there will never be a straightforward way to demarcate, ‘this is the government’s job, this is private organisations’ job, this is the community’s role’. In many societies, cooperatives and community organisations provide many services – especially in more rural regions.

These organisational forms and structures could supplant and take up ‘market space’ (as new businesses may not be able to compete or provide similar services commercially since these organisations are already providing them effectively), or even ‘political space’ because government cannot claim credit for having achieved some of those social outcomes.

As a society, thinking about the sort of soft cultural institutions and the hard organisations, we might have to decide what kind of mix we want to form a society where we all have a stake in it and not just rely on a formal government structure. The way we have developed, where people are constantly moving around, uprooting themselves to get on the property ladder, not having a particular sense of belonging to a geographical community has made it harder to foster a sense of ownership or belonging to a group. It has also encourage a lot of selfish-thinking where people are just figuring out what rules or tricks they could follow on the path to prosperity and self-enrichment.

How can we help our citizens reclaim that responsibility and stakeholdership towards the Singapore society? How can we do that in a manner that continues to maintain our unity as a nation, and strengthen our identity as Singaporeans?

Startup dreams

I listened to a couple of episodes of the Founders podcast, and also to a few episodes of The Knowledge Project podcast where Shane talks about the stories of different business leaders, founders and icons. There are some hallmark traits that recur in some of these people that I find are difficult to exists in many cultures and societies, and particularly challenging in Singapore.

And I particularly wonder if Singapore as a culture really celebrate the attributes that will really allow us to accommodate and nurture the sort of personality who will build the next unicorn or silent business giant that dominates entire sectors quietly. Or maybe Singapoeans are just going to be the sort of people who goes out to build the dreams of someone else who have taken the risks and put together that safe structure for them to navigate within and expend their energy and life into that other dream.

Honestly, I think it matters for us to learn to dream and to make mistakes on our way to getting there. The way our education system and culture are structured to accentuate mistaken avoidance rather than cultivate mistake management. The latter, I believe, is more important than the former, but never quite gets celebrated in our sensitivity, thin-skinned, conflict-avoidant culture here in Singapore.

In DBS’ latest report projecting the growth for Singapore up to 2040, they noted that a “culture of risk-taking” will be needed for the next phase of growth. What is going to drive that, I’m still unsure.

Advancement through dilemmas

As I ponder over the paradoxes of our society and nature, I begin to see more and more how our traditional linear paradigms about advancement and growth jars too much against reality.

There are many things that appears contradictory and yet continue to co-exist peacefully in the world without apparent conflict except in our minds. There are tyrants who are charismatic, loved and admired but also incompetent democratically elected leaders who could set a country back by decades. And there are both decentralised and centralised systems that appear to thrive, and also implode.

We ask ourselves if history proceeds through its course regardless of individual’s actions and it is just collective macro force created by the tiny actions of every individual that matters, or that it progresses through the agency of a few, put in the positions of power and influence? It’s not clear at all.

So when we think that progress in the system involves maturity of technology, of having regulation, standardisation, proper rules of engagement in place, we also recognise that these things stifles innovation and block new, emergent contenders from taking over incumbent structures.

Similarly, having contending standards or technology pathways look as though they are going to create a gridlock that prevents the industry from adopting a single unified approach.

The western, perhaps Anglo-Saxon, thought models make it difficult to hold those juxtaposing, contradictory ideas together because it supposes that there is just this one way that is the right way.

What if that is not reality at all?

Singapore’s 60th

I sat down and listened to the National Day Rally speech with a break in between. In terms of delivery and finding the stories to tell, I’d say Lawrence Wong did well. He also positioned the 4G team well, and to a large extent, it almost feels like political campaigning. The election results this year have shown a good amount of trust in the PAP government and reduced tolerance for weak opposition candidates. So I’d expect that the ruling government would lead confidently and start working on rolling out a vision.

I think the elements of vision involve more of the old playbook, unfortunately: another committee to work on the economy, more new towns and spaces earmarked to be developed, and then programme funding or tweaks to support Singaporeans, in terms of reskilling or upskilling.

There’s this common thread that Lawrence Wong seem to have been emphasizing, but I’m not sure I observe much of it on the ground. He seems to be recognising that general sense that the government had been dominating decision-making, and so there are generally more attempts to involve the people, to gather feedback, or to listen in. If that was his diagnosis about the sentiments, it is correct. It is not something to be ‘fixed’ overnight however. And it will take time to create a culture where people contribute responsibly to policy-making, and to concern themselves with the needs of the wider society.

Over the years in Singapore, there had been more individualistic attitude – because the government’s approach to just about everything involves sticks or carrots, more often than not, there’s this general attitude of ‘what’s in it for me?’ From the NDR speech, I can see Lawrence Wong urging less of that individualistic attitude, more of the ‘we’, but I wonder what are some behaviours that the government or the civil service can lead with, in order to foster and encourage that.

Trust in Singapore

As our nation crosses the diamond jubilee at SG60, people were putting down their wishes of ‘I want to…’ during NDP. The messages played on the videos for NDP were really inspiring and had nice stories from ordinary Singaporeans of diverse background. I felt genuinely moved and encouraged that we can be more than just ourselves and what we bring because Singapore is just a society that has been on the move, that has been developing and growing and thriving. It all feels good.

The stuff that doesn’t feel that good – how do we approach it though? The fact that places and spaces have been sacrificed, people uprooted to make way for development (as the Tekong story suggested). Or that sporting feels more like a lone wolf endeavour more than a national one, particularly during the ‘invisible phase’ of training, working towards Olympic qualifications, etc (story of Lloyd Valberg; though one can’t say this through that story since Singapore wasn’t yet a nation in 1948). Or that the big corporations often push around small businesses because that is ‘normal’ in our culture (story of Yanee; ‘but are you ready for an order of this scale’).

There is a choice to be made on how we see things. And whilst we have been told repeatedly there would be trade-offs, we haven’t yet learnt the real principles and intentions behind the decisions on those trade-offs. Why do we choose one over another? To the ones in places of power, it might be obvious. How could the sacrifice be made worthwhile for those suffering from its consequences?

What principles do we use to uphold our values – whether they are peace, justice or equality? Or perhaps progress? What happens when they are trading off each other? What if we cannot accomplish all of them at the same time? Often, ‘progress’ as the value seems to take centre stage. And is the kind of progress broad or narrowly defined?

To move forward, we must also learn unravel more the principles worth learning about and keeping, which we can use to navigate the future. Our forefathers left them for us but if we don’t pick them up to use them, it would be squandering the success that they’ve worked so hard to build us.

Blunting policies II

I wrote about the government blunting their policies previously when it comes to SME grants, particularly in Singapore. The same applies to many countries where policy directions are not just unclear but constantly changing. In the energy transition world, so many projects and companies in the US were taking investment decisions on the basis of tax credits for production of renewable energy.

So when the fate of the tax credits was suddenly called into question, it massively derailed the plans of these companies and projects, resulting in a whole sector or industrial sub-segment seizing up. I have always thought it’s incredible that in Europe and US, you could build an entire business or project based on revenues that are only possible because of subsidies or government tax credits. That’s amazing to me because in Asia, companies do not rely on government subsidies to build their business cases. At least not the private companies who have no political influence.

The reason for that is that the private sector is unwilling to take a lot of the regulatory risks from the Asian government, and they are not sure about the longevity of those policies and incentives. They recognise that when leadership changes, these incentives could disappear (as it happened in the US most recently). In other words, those policy measures in Asia are actually pretty blunt because the private sector is not going to respond to it much. US government risk that happening and losing such a precious lever to influence the economy and coordinate the change that is required.

Likewise, in Singapore, one of the biggest advantage that the government have is the ability to coordinate change properly. Technically, they don’t need to use market-based mechanisms to do that, but decades of indoctrination about the need to use free-market capitalism to ensure efficiency have brought us to the approach taken these days. The topic of subsidies is tricky and often at the top level, the thinking is ‘who would not want subsidies and freebies for their business?’ Yet in practice, it is not so easy. But it is not the bureaucracy that companies are unwilling to engage with – it is the uncertainty around the discretion of agencies’ decisions on whether some company or activity merits the funding.

Often, if the government’s grants or subsidies are uncertain and criteria are flexibly applied to accept or reject applications, then companies would rather focus on dealing with the vicissitudes of the market than of the government. I’m writing these because I feel that our agencies could inadvertently undermine something precious that the government have built up in the past. The full implications can only be seen and experience when it’s probably too late.

Green jobs

While in the meeting rooms of policymakers, the discussion around green economy and creation of ‘green jobs’ is underway, there is a slightly different conversation about green jobs in the coffee shops and cafes.

“Good work-life balance. But limited impact.”

“We move two steps forward and three steps back sometimes when trying to drive corporate green transition.”

“We have no veto power on investment decisions, the company still needs to make money so the frontline business units have the final say even when the investment have adverse environmental impacts.”

“The corporate sustainability department primarily manages reputational risks, not environmental ones.”

The best way to create impactful green jobs is perhaps when the laws and regulations properly require compliance with stricter environmental standards. At the moment, a lot of compliance are around reporting requirements and yes you do get some kind of ‘green jobs’ but they are mainly the bean-counter sort. The solution-seeking sort will come when you begin to set up standards in environmental performance that companies have to meet.

There is no point propagating green jobs, trying to subsidise manpower for these jobs and using tax credits or other incentives to force companies to locate their sustainability or green functions in Singapore when there is no corresponding increase in environmental performance standards imposed on our corporates.

Better to spend the resources studying the suitable regulations to put in place. And then you can support the companies to meet them.