Tag Archives: markets

Finding talents

Why is it that we are complaining about the shortfall of talents and then laying off people at the same time? What makes talents talented? What exactly is this all about? I thought about how we as humans have been trying to overcome our own constraints by using machines and automation but then strangely we subsequently have to justify how much better we are compared to machines.

Isn’t that a rather miserable existence?

What about this elusive group of talents that employers are looking for? What is being asked of them? And how much if it is possible? What makes talents hard to find and why are those attributes difficult to replicate, duplicate or scale?

Anyways is it not the very reason they are unscalable that makes them well sought after? Money may well attract talents but what fuels them? What keeps them going the way they do? Perhaps those are the more important questions for employers to ponder over rather than wondering where to find them.

Slow fashion

Lululemon had a “We made too much” sale ongoing. It is nothing new. All fast fashion brands tend to make too much. Because the strategy for fast fashion and the culture we created is to push out the latest design into the market, make it as widely available as possible in the shortest time pricing with markups that makes construction contractor mouth water and then just deal with the leftovers later.

So how do they deal with leftovers? Sometimes they discount, which is not the most common approach because discounting damages their relationship with customers. Customers would begin to expect cheaper price later and most of them would learn to wait. That is bad for margins and future profit. So the fast fashion brands dump their clothes into other markets which don’t carry their first-to-market goods, and then eventually just dispose of the clothes.

Precious cotton and fabrics that can be used to clothe someone else goes to waste. The world is not better for it but certainly there are people made richer by this model. And so it goes on. The focus on sustainability within the fashion industry is just beginning and hopefully gets to a level when it can start snowballing properly.

So what is the alternative? How about slow fashion that focuses on classic, proven designs, that uses materials in a sustainable way? Where the cost is towards improving material traceability, better sourcing and exploration of newer, shorter supply chains? Instead of fattening corporate wallets and perpetuating the fast fashion culture?

End of oil III

In the absence of the price signals I wrote about in End of Oil II, what do we do? And besides, there had been so many recent fiascos about carbon markets that this instrument risks losing its credibility entirely and make it even harder for carbon emissions to be priced.

Pricing carbon is not just about credits of course. Carbon taxes are forms of prices and if we want to be stigmatising carbon emissions, we can even call it a fine but then the difficult is that we all are emitting carbon so at the end of the day the price will still be sort of a “license to pollute”.

Perhaps better to suggest and highlight that the taxes, credit revenues are going to be reinvested into decarbonisation. In any case, we do need more investments, funds and support towards that. What better way to fund it than to use the proceeds from carbon pricing to achieve that?

And we really can’t wait for the private initiatives and the market to get that going. At the same time, governments cannot afford to try and design the perfect market for it all to work. Rather, if carbon credits is not going to take off, the whole slew of regulation will need to be rolled out including renewable portfolio standards, carbon taxes, renewable gas blending mandates, ban on internal combustion engines, etc.

End of oil II

After penning the End of Oil, I was bothered by my switch of camp. In some sense I had become a new kind of neo-Malthus but yet I resist the analogy. I think the struggle we have today with carbon emissions is different from the issue of resource conservation like in the case of land or other commodities. And the reason has to do with the market system and price signals.

In the past when we are thinking about resource constraints such as agricultural land, we know there is a price on the resource. With subsidies they get over-utilised but overall, because the market system rewards greater productivity of those resources, all the micro-decisions in the economy will encourage discovery of more of the resources or greater efficiencies in utilisation. The economics is working against Malthusian ideas.

Nevertheless, with the carbon emission challenge of today, most emissions still remain unpriced. They rightfully require a negative price but tax systems and enforcement aside, governments around the world are reluctant to even design regulations to create proper carbon pricing. Without this pricing, economics will keep working against the climate change problem, and we can only rely on goodwill or sustainability marketing as motivation which will never be enough.

Rainfall & showers of blessing

It’s been a really wet Lunar New Year season. The downpour was incredible and yet it did not flood. My expat friends were quite impressed by our drainage systems.

Well, we have had episodes of “ponding” which were pretty severe before. And the government agency PUB had stepped up on drainage management. Things have obviously improved since and to be really fair, we are really capable of continously improving the system as long as we are not complacent about what we have achieved.

We often take these things for granted here in Singapore because problems are either solved even before they occur or done for us such that we don’t even notice. The difficulty is that we are no longer capable of dealing with the problems when they do come. For example, our contingency plans for transport disruption is atrocious partly because we had been able to keep things going well.

In the next stage of our development, we need to develop resilience not through anticipating challenges but learning to live through them and deal with them. Otherwise, we are developing a fragile population.

Sizing the slices

How much time do we take to bake a pizza compared to working out the even-ness of the distribution of various ingredients on the pizza and then slicing it all up into sufficient slices to be shared around the table. And why does that matter. So it matters when there are different people involved in baking the pizza and thinking about the size of the slice they will be getting later. There may be some putting different topics and determining how evenly distributed they should be and so on. And then there’s the guy determining how the slices are cut. And then maybe some kind of system determining who gets which particular slice. Maybe that is by a ballot or random system.

And yes in case you’re already suspecting, I’m thinking about the economy. An economy where people are obsessed with trying to secure a bigger slice for themselves will not behave very optimally to enlarge the overall pizza. Because their energies are caught up in the distribution process; then resources aren’t quite properly allocated. The best approach is to maximize the size of the pizza before splitting it up. But the challenge is that the way we determine the split can affect how to maximize the size.

And then how do you deal with people in the overall scheme of things, who genuinely has very little to contribute to the size of the pizza but is very much part of the overall process? Do you exclude them from the distribution? How are they going to affect the others who are productive? And if you do include them, will you be disincentivizing those who are contributing a lot more to producing the pizza?

As an economy moves from the early stage developments to more mature stages, and with more specialised industries and niches in the economy, these questions will crop up more often. What we need to do is to take a stance on which direction and how we want our markets to be headed. And what would we sacrifice to make that work.

Industry chains and value chains

It was interesting to look at the copy and storytelling of this TWS’ piece sponsored by Ministry of Trade & Industry. The main message is around skills and jobs upgrading and the changing economic situation of a country that developed. I appreciated the empathy and recognising that the economic shifts do cause people to be left behind. But the idea of applying a one-size-fits-all solution to the broad economic shift seem simplistic to me.

The fact that the country embark on a kind of industrialism does not require all its people to do the same. When the UK was undergoing the industrial revolution, the French and Italians started forming artisan guilds and creating systems of artistic and craft authenticity verifications to protect and price their products better. When Frito-Lays or other big brands moved their potato chip making operations to developing countries, the developed European farms started making their own chips and marketing them at prices that are 4-5 times.

Sure, there is more technical components involved in the premium versions and probably more work went into the marketing, packaging and consumer experience. But this is precisely the sort of product development and market-growth thinking that Singaporeans need to move into the next stage of our development.

Manufacturing value-add and improvement in Singapore can be achieved by having more economic promotion, tax incentives and being able to gather a bunch of competent people able to participate in the production. That is because we are small and rely on MNCs investing in manufacturing capacity. And that MTI push for people to become cogs of such industrialism is based on this strategy. Yet as an individual, I don’t know how optimal this is. I find it simply makes us even more fragile and at the whims of the industrialism.

I’m not sure how worthwhile it is to develop stronger manufacturing base driven by our homegrown technologies and research. We do have that strategy in place and try to move in that direction as well. But we are stuck as second class folks in the game if we continue to encourage the majority to remain as cogs in that industrialism perpetuated by others.

Who does the market serve?

For a government, it makes sense to periodically step back, figure out who and what the market is not serving that it should really be serving and create interventions to redirect the market.

This is why carbon regulations, carbon pricing and systems of disclosure is so important. And all of these entails the government and the people making a choice to take away that false liberty of choice that the market creates. This decision is driven by seeking to serve the people who otherwise would not be served by the market.

For example, in the case of people who are hard-to-insure. The market-based insurance approach makes things harder and harder for them as the companies are able to discriminate against them and pool only customers with better risk profiles.

The invisible hand is invisible but it is still guiding and directing. Better for us to articulate as a society how we want the market to serve us and get it to do just that.

Following recipes

Which recipe do you follow? It really depends on what you want to cook. It doesn’t matter that everyone else is following the chicken rice recipe and you’re following the one for making Laksa – if making Laksa is your objective.

The challenge of students today in our education system is that they have been taught to follow recipes; all kinds of recipes available to them because there are recipes; and not because there are dishes worth preparing. The students ought to make an assessment of which recipe is solving what kind of problems and hence the ‘right one’ to follow.

What is happening however, is that students are following recipes that bring them into prestigious or well-paying careers, not realising that it wasn’t what they signed up for in the first place. And in the late twenties, they discover that they’ve been following a recipe for a dish they never did like anyways.

This is why I wrote dream, think & act!. This free ebook is now available for download in all the different formats here.

Story of consumption

What are you telling yourself when you consume something? Or when you withhold a consumption? The difficulty with saving the world is that we actually need to consume less and not more. Yet we need to get the markets to continue doing the work of delivering what we need. How can we know that the economic system already delivered what it needs to and perhaps a different machinery will be needed.

When you try to consume less, you retain the purchasing power to be tempted again and again towards consumption. And that is why it has been difficult to encourage people to save if they can maintain access to their savings – you need to force people to lock up their money for long times.

And maybe better to work on the path of culture; to develop the right storylines to consume less. It can be about degradation of the environment; or it can be about products that does less to the environment (ie. Consuming 1 instead of 3 alternatives). Or it can be about an identity that people should be aspiring towards.