What is really missing from Singapore’s growth strategy?

February 10, 2017

Q: The CFE recommends building a globally-competitive manufacturing sector, at around 20 per cent of GDP, over the medium term. They plan to target advanced manufacturing activities, to encourage growth of areas that sit at the confluence of high-tech manufacturing and high-end services such as advanced manufacturing and the Industrial Internet of Things. What is your take?

A: Kompf. It bears repeating only because I have repeatedly requested you very politely to ask me only one or two questions at a time and not pile twenty questions on top of each other.

Be that as it may. Let me dive me. What do they mean by advanced manufacturing? Second question what exactly do they mean by growth?

Now if you ask me how should the new Singapore engine of growth be designed and built – then I say it doesn’t pay out big dividends at all to put all your chips on the high tech, space age quadrant where we regularly talk about innovation and creativity at the highest level.

In my assessment Singapore does not have the skill arms of play that game – now I want to be polite. This is not the first time where people sitting in a committee who don’t even have one registered patent to their name or who have ever conceived a idea in the form of a product or who has ever had to take it from blue print stage to finished has come up with this road map of growth.

In the past there have been many grand plans to leverage on innovation and creativity – result many dead guppies. Again I want to be polite.

The way I see it – policy makers need to acquire a very deep understanding concerning the chronology of how a nation shifts gears from low end to a high tech economy that leverages on innovation and creativity.

It’s a long history Kompf and unless one understands this skeleton key. Then words like thinking out of the box, innovation, creativity, passion are all just two dimensional words that really mean absolutely nothing.

Q: We’re having a morning coffee session. We have time. Why don’t you share with the Guilds your version of the definitive history how a nation makes that transition from low end to higher value added products?

A: One word. Copy cat. If you examine the chronology of every single nation that has been able to successfully migrate from from low end to high value added products and services. Every single one of them copied from the greats – Japan is an industrial juggernaut – but how did a backward agrarian society where all the elites carried samurai swords instead of modern firearms transition during the Meiji period in such a short span of time into a super power? Did they start with the prologue of innovating and being creative? No! They copied. Now the polite parlance in manufacturing strategy is reverse engineer – but I prefer copy cat. Because that was what Japan really did – the Sumitomo’s, Mitsubishi’s and the conglomerate merchant class known as the zaibatsu were all without a single exception fantastic copy cats – that was really how Japan became an industrial superpower. Of course if you go around spouting all this in a polite conference where everyone has an orchid pinned to their suits. No one will want to associate with you.

But they were all exceptional copy cats. Even the Imperial Japanese Navy (IJN) was essentially built ground up based on that one doctrine alone. After the war when Japan decimated economically and was militarily emasculated by the prolonged American occupation. How did MITI manage to revivify it’s industrial might again – again the executive summary to their economic strategy was copy, copy, copy and copy like a super cat.

Today you look at a Nikon camera. But where did it begin? This is a very agricultural way of seeing things – as one cannot be presentist. Instead one goes back. Why don’t you google up on the first Nikon camera that was ever manufactured in Japan. You will find it’s an exact one to one facsimile of the Leica. Pls go. Sony same story.

Fast forward to today – China today can manufacture bullet trains that are comparable to the best Shinkansen gold standard. Ask yourself how did a country that relied entirely on coal furnace locomotives manage to make that leap?

This is where the Harvard Business Review doesn’t tell you – they copied. And for lack of better word or phrase copying is the most reliable way for a nation to build core competencies that will allow it to one day make the leap to high tech.

Today Chinese train technology is no longer in the copy cat stage – they are now beginning to synthesize new technology that it’s proprietary to even call it’s own – it has successfully commoditized this technology to even export it and conceptualize the one belt, one road global economic strategy.

Korea did essentially the same thing – only this time round they copied for the greatest copy cat in the world Japan.

Q: At the risk of interrupting. What you mean to say is pursuing a manufacturing strategy based on reverse engineering is one evolutionary step towards migrating upstream to high tech? What do you think about the idea of getting innovative and creative people in one place to create value wouldn’t that work?

A: That would work. Like perhaps the Manhattan project that successfully weaponized atomics. Or maybe Bletchley Park where you had really smart people who could always manage to come up with seven letter rows in scramble. But you’re forgetting – those countries had intellectual critical mass. Even so, the US rocket program would not have proceeded as fast as it did without the covert paperclip program that specifically recruited ex Nazi rocket scientist – so don’t think the Caucasian race is some master übermensch race that has a superior helix when compared to Asians – they too are great copy cats as well. Only as I said, don’t go around spouting all this in some seminar or conference. Otherwise they will blacklist you.

My point is simple. Take this case of our MRT blues back in the home front where Khaw Boon Kong is equally confounded as his predecessor the dearly unfortunate Liu Tuck Yew. You know what my advice to him would be to make trains run reliably in Singapore. One word. Copy. Copy with the highest fidelity possible how the Japanese run and manage their trains. Because the Japanese are immensely proud of their trains. It’s like first class roads in Canada. Or maybe great outdoor boots to Americans. They have elevated their core competencies in those area to a theoretical science to be the best in the world.

No need to brainstorm. No need to even come up with home grown solutions. Just copy. Everything from standard operational procedures right down to drivers wearing white gloves when they’re on shift.

It’s axiomatic.

Q: How should this strategy of copying be implemented in Singapore?

A: I think it’s very difficult in Singapore. As one of the worst things that retarded and possibly stunted Singapore to make the leap from the built to blueprint cost center to a higher value added society that is comfortable with synthesizing new ideas that can be commoditized into products and services was the corseted intellectual and copyright laws.

In my considered opinion from a manufacturing strategy stand point that was a ill conceived to say to put it mildly. So that really created conditions where growth in innovation and creativity could really only begin from the very apex of the cutting edge of innovation – in my view, Singapore missed out on a very important evolutionary step that was a strategic precondition that would have allowed to be grow industrially like the rest of the tiger economies.

I want to be polite. But I also need to be accurate and succinct. I have a lot of respect for Philip Yeo. I happen to think he is a top drawer bureaucrat – only the whole idea of trying to build up core competencies from the top of the mountain will always be fraught with risk. I mean retrospectively. It’s easy to blame him. But hey at that time firms listed in NYSE doing research on growing ears and lovers in Petri dishes had 20 to 30 times profit earning ratios – it was reminiscent of the dot.com boom days. There was a lot of enthusiasm and perhaps even run away train exuberance. But for me the skeleton key to grow an economy that leverages on innovation and creativity always has to begin from the lowest rung of the ladder. At the level of the desk of the lone tinkerer or inventor who struggling to make things work with ductape and superglue. It’s garage stuff. Weekend warrior stuff. That to me is the crèche of innovation and creativity and to me it doesn’t even necessarily have to be high tech – it could just as well be really mundane low tech stuff like how to create a better traffic cone that can be seen better under low light conditions to really boring stuff like better hand rails that can assist the aged when they decide to take a dump. Or even how to design better poles to hang clothes in the HDB without it dripping down on your neighbors clothes.

You’ve got to start from there. In the land of everydayness, litany and the boring.

Q: Can Singapore learn the bottom up strategy from some countries that have successfully pursued this strategy?

A: Yes. You know take a look at Sweden – it’s a small country, but it has the highest patent per capita. Germany. Or rather some parts of it is similarly orientated. Where if you have an idea to develop a better mouse trap. There’s a clearly defined road map that is state inspired. For example I have this idea how this new super duper mouse trap might work. But I need a work shop. The state facilitates you with a work shop. It’s all there – everything from lathes to even prototyping using wire mesh 3D programs. You still have a day job. You haven’t registered a company yet. Because you don’t know whether this new mouse trap is something that’s going to shake up the world or go bust. Again no problem. There are pathways where you can tinker and still keep your day job without having to go thru the hassle of registering a company and all those stuff that is just friction on cost and time. You need a certain spring to be tensioned at a certain poundage. You figure titanium is good. But since firms don’t deal with individuals and they have minimum quantity orders to make it worthwhile to even engage you professionally. Again no problem – these agencies will facilitate you to get maybe just a box. So if that doesn’t work. Maybe you wouldn’t be landed with sunk cost on springs that have no use. You decide on stainless steel instead. You say maybe it will work better. Again they get you those things. At the end of it – you have a working prototype. But you need equipment to test and rate it – again these agencies have all these test facilities. Everything is there. From machines that can hydraulically stretch a strip of metal till it snaps to printing out the data that will allow you to improve on your mouse trap.

Now once you’re confident your prototype works. These agencies even have a panel of Meisters – these are dead serious professionals in manufacturing. They’re like ace fighters pilots with patents like kill flags on their fuselage – it’s all state driven – I think the certification is called Meisterbrief. Now they will advise you how to build this commercially. Who to go engage as a contractor. How to even put it all together in the least possible steps using time and motion optimizing techniques and the system is so good that should your mousetrap ever makes it to the market and some housewife in Munich sets it wrong and clips her finger, there’s even a legal team that will give you follow up advise.

It is a three hundred and sixty degrees definition of the word innovation and creativity – that is to say it is the A to Z of what needs to be done to leverage on innovation and creativity.

The problem in Singapore is you have many leaders who can use these words but they are clueless when it comes to the cogent question of how to translate it from theory to reality.

That to me is what Singapore should be doing – but what do I really know. I am just a simple farmer.

Q: So what you are saying is our SME’s should be going towards that direction?

A: You disregarding what I am saying here again. Maybe I should charge the Guilds USD$1,000 per hour consultancy?

My point is to grow a manufacturing enterprise. You’ve got to understand every stage of it’s life cycle. It is not so different from planting a seed. And the seed sinking roots and a plant pops up etc etc.

So if you say something like I think we want to help our SME’s to encourage them to leverage on innovation and creativity. That is well and fine if you’re talking to people who know little or generally about manufacturing strategy. But if you start that sort of conversation with me – I would ask, what do you mean exactly by SME? Can have a look at your excel spreadsheet for the last five years. What is the nature of the business? What are they manufacturing?

So I am not really talking about SME’s per se. I am referring to people who want to start enterprises by leveraging on innovation and creativity – just like that fat guy who invented a nifty wrench. If you play the video you will find workers banging away in the background – but I am not interested in that aspect. The nub of my point is how did he manage to get his idea to a working prototype?

It’s a basic, first stage question. How? May look like a simple lever wrench with just a closing set of claws to you – but I see serious machinery that needs to make those components. I just postulating. The sheet metal has to first stamped out and water cut to fine tolerances. The claws that grip the nut, they have to be tensile steel. Even the simple lever needs to be metal stamped with a mould and powder coated. The grip needs to be injected moulded with rubber resin and finally all these need to be assembled at a cost effective price – these machines cost millions. So how did he do it?

That’s where you have to start when we talk about putting petrol into the engine of innovation and creativity. Otherwise it’s useless. It’s all just talk.

Now China man comes along and sees it in Walmart one day – he goes back to Xiamen one day and strips it apart and starts manufacturing the selling essentially the same thing for half the price – do I have any sympathy for that fat guy?

Why don’t you ask me that question?

Q: Do you any sympathy for that inventor?

A: The moral and politically correct answer is yes – because he invested his time and energy and creativity to bring to market a product. But bear in mind this is something that I would only really say if I am wearing my Zegna suit and circulating with corporate people who some hotel where they serve drinks with tiny paper umbrella’s.

You think the China railway development head gives two shits about patent law suits from Kawasaki drive trains when the latter copies their bullet trains? Do you think the Chinese gave two hoots when they copied the Israelite defunct Lavi fighter jet and called it the J-10? What about Isoroku Yamamoto’s surprise raid on Pearl Harbor? Do you really believe for one moment he didn’t copy that idea of the British raid on Taranto?

So let’s side tracked here by ethics, morality and philosophy of being a gentlemen – because like I said, there is no shame associated with copying. You want to sue? Go ahead. File a writ of summon send. We will see you in court meanwhile we will still be selling. Again this is not new. This is what Sony and even Nikon and most Japanese firms did – they went to court, but eventually they reached the sweet point where they managed to acquire the critical mass to synthesize their own stuff to call it their own.

Paradoxically it was when the Japanese zaibatsus began to take exceptional pride in their innovation and creativity to such a point where they became so arrogant to the point – where copying or reverse engineering was seen as a dirty word in corporate Japan that was when firms like Apple took them all to the cleaners – now the Japanese is just a pale shadow of their former glory. Why?

Because they forgot the first cardinal rule of business – business is war!

Q: How many do you think will be persuaded by your logic?

A: It is not the number it is the quality of men who read my blog. Putin reads my blog so does Trump and many at least forty very serious movers and shakers – if you want quantity please go to Mr Brown or Xiaxue. I blog mostly about very serious things which to be perfectly honest will always be boring to most people. Because that is their Dao – there is no way to say this politely just as it is impossible to make an omelette without breaking eggs. I hope you can appreciate my reasoning along with candor as the last thing I want to do is to inadvertently cause offense. But then again Kompf to move mountains you don’t need many to be persuaded – only a few are needed and that my friend is exactly how I want to keep it. I have to cook now. I hope your will join me. As it will be delicious.

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