Innovation Race

There are no lesser reports recently from western scholars and business writers commenting on the rise of India and China as the new innovation giants. Many of their verdicts are based on the rising number of technical graduates from these two countries, which they think will eventually promise innovation progress and economic growth. I support critics’ views that this line of argument is too simplistic, and I think it is worthwhile to elaborate further on those views which can be represented by this simple equation: Technical graduates ≠ Innovation ≠ Economic growth.

Critics rightly pointed out that rising number of technical graduates simply is not the answer to innovation. We can not overlook the quality issue and the need of an education system that can truly harness the creativity of graduates. Perhaps it may take a major overhaul to redefine traditional education objectives in Asia which stress more on examination qualification and less on research. Governments must also undertake substantial investment in basic and commercial research to expose students to innovation challenge before innovation progress can truly take off. So the real answer to innovation is a large pool of highly entrepreneurial and innovative graduates through improved education system, mass pool of technical graduates will not take up the challenge effectively.

But innovation alone does not guarantee immediate economic growth. Put it simply, technical innovation alone generates no revenue, it takes business acumen to commercialize technical innovation and deliver economic values. So business judgment and the ability to connect with consumers are absolutely imperative to bridge that gap. India and China still have much to do in developing truly world-class business expertise to complement their aggressive move in producing technical talents.

So I really do not think their current education model which produces mass technical graduates to supply to traditional manufacturing and IT industries will serve them well in long term innovation challenge. It needs a shift to high value based education which stresses the capacity to innovate and commercialize at the same time. Their future of becoming innovative powerhouse is tangibly real but it is largely overplayed at this moment, there is still a long road ahead for them to make significant transformation into truly innovative economies.

The Hope For Change

There is no doubt about the fact that Obama’s victory has inspired the world about the possibility of profound change in democracy. From fighting against slavery and for voting rights, ending of segregation and finally the moment of winning U.S. presidency, it truly has been an emotional journey for the minority blacks in the most powerful country in the world. People around the world have been fascinated; so it is not surprising if they have the same dream for similar democratic process to unfold, where a competent leader can be elected from ethnic minority without any major hindrance. I have no qualms that other countries may triumphantly undergo similar transformation, but what are the inherent challenges to overcome?

Obama’s exceptional victory is truly unique, and I believe it can never be replicated anywhere else in the world. Even if we argue from the historical context that ethnic minorities usually had to undergo rather similar paths of hardships before achieving some degree of equality and benefiting from more political transformation eventually, we can not ignore the present and circumstantial context which greatly aided Obama’s election. This is a tumultuous period where Americans are largely disappointed by Republican administration with faltering foreign relations, never-ending wars against terror, and the greatest impact of all – the current domestic economic woes. There is no question about their yearning for change, and Obama projects the strongest leadership for that to happen.

So the path toward having an ethnic minority to rise up to the highest leadership not only requires some gradual changes but also extraordinary circumstances to take place. First and foremost, as long as wide socio-economic disparity still exists across races; especially if disproportionately large number of ethnic majority still live in poverty, then election of an ethnic minority to top leadership will face tremendous resistance. Unfortunately in countries that have long been segregated by ethnic-based political parties and policies; as well as troubled by large income gap among different races, it will be difficult for people to put national interests first before economic progress for respective race when it comes to selecting the most competent leader. In those countries people most likely still inherently believe only a leader from the same ethnic background would take care of their interests or simply believe that the ethnic majority should lead.

The first challenge intrinsically leads to the second challenge which I think is the toughest to overcome – the willingness of citizens to look beyond ethnic background in selecting the most competent leader. Assume the first challenge can be resolved, there is still no guarantee that the ethnic majority who have been ruling all the while are willing to give up their political power even if there is clearly an exceptional ethnic minority leader. In multi-ethnic countries, within historical and constitutional context there are designated distinctions between the natives and the immigrant minorities who were later granted citizenships and guaranteed socio-economic privileges to help the natives to progress. This political system tends to justify a false sense of racial superiority and subsequent leadership selection in present day.

This also leads to our third challenge – constitutions and racially-segregated policies developed through historical context and which discourage any future consideration for electing a competent ethnic minority to top leadership. Those who benefit the most will resist any call for change, even the slightest hint to call for constructive debates or discussions will be banned in the name to preserve racial harmony. As long as we leave no chance for revision on biased constitutional laws and policies, it is simply impossible for us to take a step forward.

It should be clear that Obama’s example is hard to be the democracy model for other countries to follow, given their vastly different political and social elements. Also bear in mind that the election of an ethnic minority to the highest leadership in the country does not immediately end racial politics and inequality which is supposed to be the utmost priority. Real change requires solving all the intricate challenges mentioned above or perhaps even more in different countries with varying degree of maturity in democracy. Only when citizens – both ethnic majorities and minorities are compelled by external forces; and start pushing for real change to happen relentlessly, only then it will become a reality. History has reminded us, it is citizens who see the needs and demand changes first rather than politicians who are always slow to anticipate and react to political changes required in the most current context. Or often we also tend to wait until external circumstances such as wars, economic crises or globalization processes to compel us to change in leadership or beyond.

So indeed U.S. has set the precedent for change through democratic progress but it is still unrealistic to expect the same thing will happen anytime soon in other countries. There is still a long road ahead for most countries to become a truly democratic society. I hope to see the day when we can free our imprisoned mind from segregating ethnic majorities and minorities, shift our judgment and perception toward meritocracy and social safety for the needy irrespective of races. Then it will be the day of real change to benefit the whole nation.

You Aren't Welcomed Here

The massive influx of foreign manual labor has been a contentious issue in any country. Low-skilled foreign workers have been the subjects of contempt in the eyes of local citizens; perpetually blamed for accepting deplorable wages and working condition, rising social concerns and crime rate. The central argument of this issue has always been the loss of jobs by local citizens, similar to the criticism on outsourcing and offshoring phenomena. The real distinction is that the presence of foreign workers has deeper social impact because they blend in their culture and work ethics alien to the local community, so the resistance could be undoubtedly greater. But do foreign manual workers really deserve our stereotypical discrimination? Are we not expecting global labor flow and gradual improvement of living standard especially from the poorer regions in the age of globalization?

Unfortunately local bias will not disappear simply because nations are more interconnected than ever before in globalization. Whenever we see local unemployment and immigrants seem to be flourishing in our soil; even though they are still making meager salary and much poorer than the local citizens, we are quick to blame them for local unemployment even when there is a lack of concrete link. We also fault them for the rising crime rate even if local criminals are the main culprits contributing to the rise. We have such biases simply because it is so convenient to blame them without challenging our faulty assumptions, further compounded by our failure and deliberate ignorance in searching for substantive causes and remedies of the issues we confront.

Local government officials are also quick to jump into populist consensus and heap scorn on low-skilled foreign workers, conveniently ignore their contribution in local economy. This is the classic hypocrisy in globalization where we welcome their cheap skilled experts, attract them in large number and feel no sorry to their poorer countries but we shut the door for their manual labor. We laud when foreign workers from poorer regions are doing better with improving living standard, but not in our soil.

Underlying these blames and biases, there hides the incompetence of governments to help equipping local manual workers with relevant skills and move them up to higher value jobs. It seems odd that we are content to adopt protectionist measures to ensure they are secure in low-valued manual jobs, which are really short-sighted and do no good in the long run. Even if such moves may look pleasing temporarily, we are simply positioning them at huge disadvantage when global competition becomes more intense in our economy.

The long-term solution is clear – we need to help local manual workers to progress to become more competitive, while we should provide short-term social safety to them but not by shutting out foreign labor. It is simply unfair and one of the most mismanaged aspects of globalization. Besides, taking the drastic action to force private enterprises in restricting foreign labor recruitment is also contradictory to their mission of lowering prices and adding more values to consumers.

An effective solution should see governments to invest in long-term human capital development, which I think is still the surest bet of social safety. Education re-investment should be at the heart of such effort especially from elementary to vocational level onward which is more relevant to local manual workers who discontinue university education. But education without jobs is simply pointless, a progressive economy should also see governments to increase infrastructure spending to generate more high-value jobs such as in the areas of alternative energy, communication network infrastructure and biotechnology development. Re-skilled local manual workers will need these avenues to contribute and reap the benefits. Anything less than this two-pronged approach is not going to be effective but it requires enormous resources; so governments can not do this alone without the support of private sector, they should form partnerships with private firms to train, re-skill local manual workers to move them up the value chain of jobs. Of course, voluntary participation is insufficient, tax breaks can be given as incentives for any training investment by private firms. I believe this extensive form of human capital development is widely known by policy makers, we need this to lift the socio-economic status of local manual labor and eventually benefit overall economic progress. Unfortunately policy makers mostly resolve to political move and go after superficial relief by shutting out foreign labor.

We need a comprehensive and sustainable solution to help low-skilled wage earners. By focusing in extensive human capital development, we are not only helping our poorer neighbors to improve economically but also preparing ourselves for longer term challenge. High quality pool of local workforce will position us especially developing countries in race to create high value economy. My key message is to call for opening our eyes and minds to greater global awareness and accept uncompromising action geared toward common good. Yes, we can do that.

Developing Countries, Where Are Thou?

Remember shortly before the financial crisis hit us, we were preoccupied with tackling rising oil prices and renewing our flagging commitment on alternative energy initiatives mostly led by developed countries. But right now, I think these initiatives are likely to slide into lower priority once again. The pressure is more intense for governments to prevent their countries from sliding into recession, declining oil prices will help and may pose as further incentives to delay putting more resources into alternative energy development. There is never any rosy picture in energy challenge without global involvement, and it is doomed to fail if developing countries continue to remain at the sidelines. Alternative energy development is probably the least talked about topic to them, with their insatiable appetite fixated on cheap coal and fossil fuel to catch up with the economic success of developed countries.

Indeed, developed countries did not take enough precautionary measures on environment preservation for their economic growth in the past context; but if developing countries set their irreversible destiny to become among the largest polluters in present context, I can only imagine the future will be the time to pay for the environmental cost. Without a doubt, economic growth is at the heart of this issue, in fairness developed countries should do more but not without concrete effort from developing countries as well. The central question is how can we convince developing countries to contribute more in alternative energy initiatives?

We recognize the significance of developing international agreement that bind countries on carbon reduction effort, I think likewise we need international body to administer alternative energy development at the global level. All major polluters should be part of this effort so we can not hope for an agreement that compels nothing more than ineffectual voluntary involvement. Hard as it may seem to design and implement the rules in the first place but it is still the most effective way to get all countries involved, so there should not be any excuse of not attempting at all. It will be the first step in compelling all countries especially developing countries to contribute more in alternative energy development.

Apart from establishment of international body, I think the long-term incentives themselves should drive developing countries to have an early start in alternative energy development. Because excessive dependence on non-renewable natural resources put countries at risks of unwanted volatility that will disrupt future development. Quicker pace of turning alternative energy development into commercialization of cleaner energy will move developing countries into sustainable economic growth earlier. Besides, such effort is also consistent with their intention to become major global players in future, because it is aligned with their goals of developing future multinational corporations increasingly inseparable from the adoption of green technology, and the pursuit of a growing segment of environmentally conscious consumers worldwide. But most importantly, the path toward cleaner energy will allow some developing countries to break free from the resource curse which plagues them for so long and renders them uncompetitive.

I admit it will not be easy when it comes to compelling countries to take up initiatives or reaching an agreement let alone implementation, it will require a major shift in mindset from excessive concern with respect to economic competitiveness – the core economic issue for developing countries in globalization. They will need to start evaluating for the greater good because when the environment finally fails to sustain our abuse, all countries will cease to be competitive. By then it will be too late.