Saturday, July 31, 2004

Innovation and efficiency 

At a roundtable discussion on entrepreneurship education organised by the National University of Singapore Stanford University and University of California, Berkeley yesterday, Acting Minister for Education Tharman Shanmugaratnam said that Asia has entered the knowledge-based economy.

“Growth will be innovation-driven, not efficiency-driven,” he said, adding that the most successful countries are those that “build and sustain vibrant innovation systems”.

While I agree that innovation has become an important source of competitive advantage for businesses, I would disagree with the notion that innovation and efficiency are mutually exclusive factors.

Innovation is more than just about being able to introduce new products or services. Great companies are also able to use innovation to drive operational efficiencies. One often feeds the other.

For example, Dell sells computers. But Dell’s computers are not particularly innovative. What is innovative is Dell’s efficient build-to-order business model that minimises inventories and cost and gives it a competitive advantage.

While innovation has become the latest buzzword in business, let’s not get carried away with it and forget that there are other important factors in achieving business success.

Tuesday, July 27, 2004

Does streaming make kids feel less dumb? 

The primary school streaming policy in Singapore’s education system has often been criticised for pigeon-holing students according to their supposed academic ability. This is said to cause students in the weaker classes to be stigmatised.

The Ministry of Education has often defended streaming, saying that it allows students of different abilities to be taught according to their abilities and thus avoid frustration.

Rob at the BusinessPundit appears to have found evidence that the Ministry may be correct. Citing his sister’s work in education, he says that when his sister split the children into classes based on ability, “the test scores for EVERY GROUP increased. She claims in her paper that what makes kids feel dumb is when they are all in a class together and they see students doing much more advanced work and wonder why they aren’t doing it. She says kids used to ask her all the time why they weren’t doing the same work as the other kids.”

An ironic finding, surely. But it is consistent with the Ministry's long-stated stand on streaming.

A caveat, though. The study cited in BusinessPundit was a relatively small-scale affair. In the absence of an institutionalised streaming system that clearly announces certain classes as being designated for weak students, it was probably able to avoid the stigma that would otherwise be attached to those who go to such classes.

So while the Ministry of Education is correct on the direct positive educational effects of streaming, it should still try to reduce the negative social and psychological effects that the system may have on children.

Sunday, July 25, 2004

Planning for retirement 

The Sunday Times has a regular section on investment. It’s usually quite basic, carrying mostly articles on money management, financial planning and asset allocation.

Today, though, The Sunday Times also carried a special supplement on investment, which provides readers with a wide range of investment advice, including financial planning, high-yield bonds, credit card usage, stock options, insurance, property and unit trusts.

In my opinion, though, basic financial planning is still paramount. Without the basics in place, the individual is in no position to invest significant amounts of money.

In this respect, today’s feature by Leong Chan Teik in the regular investment section, titled “Can you afford to live to 100?”, is useful. In particular, it focuses on one risk in financial planning that many people neglect: Outliving their money.

Life expectancies are getting longer. Inflation and medical costs can eat up a significant portion of one's retirement savings.

And medical problems for the aged are often chronic in nature, so their treatment often has to be maintained for long periods of time. This is obviously costly.

Furthermore, as more treatments become available through medical advances, medical costs will continue to escalate. Financial planning must take this escalating cost into account.

The Singapore government has always been mindful of the cost of caring for an ageing population. It regularly urges Singaporeans to plan for their retirement and not rely on the government or their Central Provident Fund savings alone to fund their retirement.

Leong's article will be helpful in reinforcing this point.

Some government-sponsored resources available on the Web:

Benefits of Financial Planning

Enjoy Financial Security

Thursday, July 22, 2004

China unhappy with DPM Lee's visit to Taiwan 

China’s unhappiness over Deputy Prime Minister Lee Hsien Loong’s visit to Taiwan on 10 July continues to affect relations between Singapore and China.

On Tuesday, Chinese Foreign Ministry spokesperson Kong Quan said Lee’s visit lent support to Taiwan’s “independence” forces, rejecting Lee’s claim that it was “a private and unofficial visit”.

China has now delayed an invitation to National Development Minister Mah Bow Tan to Chengdu (see story).

China’s attempt to bully Singapore over its relationship with Taiwan is understandable, given its sensitivity over Taiwanese independence. However, if China doesn’t let up soon, such bullying risks losing it the goodwill of other friendly nations.

Sunday, July 18, 2004

Handover: Goh Chok Tong announces date 

Finally, we know the date that Prime Minister Goh Chok Tong will be handing over the leadership of Singapore to Lee Hsien Loong.

Yesterday, the Mr Goh announced that he would be relinquishing his appointment as prime minister to Mr Lee on 12 August. It was an announcement that has been anticipated by Singaporeans since Mr Goh first named the latter as his successor to the public at the National Day Rally last August.

Lee Hsien Loong is, of course, the eldest son of Lee Kuan Yew, the first prime minister of independent Singapore. He shares the same intellectual brilliance as his father, rising quickly to the rank of brigadier-general in the army before entering politics 20 years ago.

His father, Lee Kuan Yew, as everyone knows, was a tough, charismatic leader who was not afraid to make unpopular decisions. These qualities helped him steer Singapore through the communist crisis, independence from Malaysia and the withdrawal of British forces in the 1960s and 1970s. Little wonder then that he has been credited with bringing Singapore from the Third World to the First World within a generation.

When Goh Chok Tong took over as prime minister in 1990, he had the task of maintaining the stability and prosperity brought to Singapore by the first generation leaders. In contrast to his illustrious predecessor, he brought greater openness and consultation into government, a style that was suited to an increasingly educated and demanding population.

So what style of leadership will Lee Hsien Loong adopt?

Of course, most people would already have an idea as Mr Lee is not new to government, having served as deputy prime minister for most of Mr Goh's tenure. He is Minister of Finance and chairman of the Monetary Authority of Singapore. He has led many economic committees, most recently, the Economic Review Committee to restructure the Singapore economy.

He has shown himself to be tough — like his father — but also willing to consult colleagues and subject experts on policies, especially in the fields of finance and economics which he currently heads. In other words, he appears to be a cross between Lee Kuan Yew and Goh Chok Tong.

Which may be just what Singapore needs at the moment.

While the opening-up of Singapore is something that cannot be reversed if it is to thrive in a globalised information-dependent economy, with the rise of economic competition from other emerging economies — most notably China and India — the need for Singapore to change and restructure its economy to maintain its place in the world is also critical. And the ability to drive change in the face of potential hardship and uncertainties is needed in its leadership.

Mr Goh and his colleagues in the cabinet have already expressed their confidence that Lee Hsien Loong has the requisite qualities. The rest of Singapore, as well as the international community, will soon know whether that confidence is justified.

Monday, July 12, 2004

Singapore loosens up 

BBC News reports on the relaxation of rules in Singapore — "Singapore slings a little caution to the wind".

But really, this sort of news is getting to be rather stale. Singapore started relaxing its rules a few years back. Some foreign media have merely been slow to notice.

Thursday, July 01, 2004

Blackout blow to Singapore 

In April, we had a collapse at the MRT construction site along Nicoll Highway and at the Fusionpolis construction site along Ayer Rajah Avenue. In May, we had a fire breaking out on an oil tanker at a shipyard along Benoi Road.

On Tuesday night, a massive blackout hit Singapore, making it three months in a row that the country has experienced an industrial mishap. Fortunately, there were no deaths this time round, unlike in the previous three incidents. The only injuries reported were a motorcyclist and his pillion rider, who were hit by a car at a junction where the traffic lights had failed because of the power failure.

According to The Straits Times today, an emergency alarm had triggered a valve to shut at a gas pipeline, for reasons which are still unknown. A backup system involving a switch to diesel fuel failed, apparently because there was not enough residual gas to feed the turbines during the transition.

Although there were no fatalities, this incident is a smear on Singapore's reputation as an efficient country where everything is supposed to work. At a time when Singapore's economic recovery is still fragile, it cannot afford to have more incidents like this to scare potential investors.

The boss is a pain 

This AsiaOne Careers Newsletter issue is well related to my last post “Disengaged workers and bullying bosses”.