Globalisation

A simple Singaporean's perspective...

We used to compete with our sisters or brothers for mom's attention. We used to compete with our fellow classmates for the top positions in class ranking, school rankings. We compete in work place for promotions. We compete for the best airport, the best airline, the busiest port... . Singaporeans are used to competitions. Life was simple. Somehow, we live to compete.

Things started to change. In school, we started to hear parents complaining foreign talents grabbing the top positions. Lower value adding jobs began to disappear, and reappear in countries like India, China, Vietnam etc. Higher value added jobs remain, but transformed into a MNC, multi-national community. Then, the definition for lower or higher value adding keeps shifting. Yesterday's high value can be today's low value, and the job disappear as well. Welcome to the era of globalisation.

Scholars, economists, ministers, world leaders might go to great length to describe and define globalisation, but to the man in the street, Jalan Singapura, globalisation means transformation from job security and life long career to job securing and life long learning.

In fact, this is nothing new. Humans, civilised and sophisticated, can be self governed by moral values and religious teachings. They are also subjected to countless rules of law. Mother nature scratches her head and just made ONE simple rule for all living organisms on this planet - the fittest shall survive.

Hence to survive, we found ourselves constantly struggling to keep ahead; constantly upgrading ourselves; constantly maintaining our relevance to this world, just to define our existence. However, we seemed to abuse this constant struggle to survive and got carried away. One moment we hear, "I'll be happy if I can become the manager" or "I'll be happy if I can earn $10,000 a month", the next moment, on achieving the goal, we hear "I want to be GM, or "I want $20K"... Somehow, people don't like to enjoy the fruit of the labour, they prefer to enjoy the labour. No wonder Singaporean's ranking in satisfaction with life index was so low. We found ourselves in the competition trap.

We started out in the workplace being young and inexpensive, staying competitive aren't difficult. When you are old and expensive, fighting to define your existence becomes an uphill task. Can we get out of this competition trap, another variant of the rat race? Of course we can. There may be more ways, but I found two worth considering, starting a business or investing¹. Weighing the returns, risk and consequences of failing, it seems more feasible to invest than to start a business.

Starting a business requires an opportunity cost of quitting a salaried job. Success in business means unbounded returns and successful stories on newspapers or documentaries of exclusive interviews. Unsuccessful business ventures means bankruptcy and ... filling up a job application form, checking the box "Have you been or are you under any financial situation/embarrassment i.e.... an undischarged bankrupt..." Investing on other hand, does not require one to quit the job. Success in investment means financial freedom and passive income. Unsuccessful investment just means "get back to work". In fact, the fruits of cautious, non-speculative investment takes time (years) to form and ripen.

In conclusion, we are at our most competitive state when we are young. We are inexpensive, we have the passion, the energy, the brain juice, the ideas and to compete aggressively in this dog eat dog world. Our value generating per dollar is high. But when we are old, in our 40's, we are expensive.We can no longer sustain the level of passion, ideas etc. Our value generating per dollar deteriorates rapidly. Fortunately by then, our investment should be mature enough to bear fruits. We can exit gracefully from this rat race and let the young take our place.

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1. Investing here differs from gambling. An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative. (Quoted from the Intelligent Investor, Benjamin Graham). Investing treated as such becomes a self-driven savings plan whose risk can be significantly mitigated by adequate margin of safety and diversification.

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Image sources (from the top):
Figure 1: Big fish eat small fish (http://www.snweb.com/gb/gnd/2003/0224/w0224003.htm)
Figure 2: Rat race (http://risingtide.org.uk/book/print/97)
Figure 3: Dog eat dog world (http://www.fotosearch.com/BCD121/gpfb11/)

Success in school Vs Success in work

A simple Singapoean's perspective

Ever felt life isn't fair? Ever felt why someone less deserving then you got something you think you deserve? Ever felt why the management thinks highly of someone when you can easily find any Tom, Dick or Harry to be far better than him? If someone is more deserving and got a promotion, you will gracefully accept right? Anyway, under perfect meritocracy, maybe there is fair competition where the better succeed.

Unfortunately, life isn't that as simple as meritocracy. It took me 27 years and a book by Nicholas Taleb, titled Fooled By Randomness to realise the need to differentiate a deterministic event and a random event. Failure to do so will make life seem unfair to you.

A deterministic event is one whose outcome is controllable. These types of events are normally characterised by few inputs that determine the output. Ability to repeatedly control and process the inputs to produce a desired output, the result is seen as a skill.

A random event is one whose outcome is not predicable, let alone be controlled. These types of events are normally characterised by many inputs that determine the output. Ability to produce the desired results can only be seen as luck, though the happy guy might try to smoke his way through at his ingenuity in triumphing the odds.

Perfecting the art of spinning the roti-prata is skill because it is difficult to imagine the hawker getting a good one by luck all the time. Guessing the PSI is luck, considering the sheer number of factors to consider, wind, rain, number of fire starters, politics etc.

During the good old school days, life was simple. Grades can be simplified as a function of intelligence and hard work (effort).

result = f (intelligence, effort)

Though you can't choose your intelligence, you can put in more effort to make up for it. You can't beat the intelligent hard worker, but you can earn some decent grades to define your existence. This is an example of a deterministic event. You reap what you sow, right? Yah.

When it comes to working, things get a little, or rather very complicated. Success in the work place, in your career is not just a simple function of a few variables, it much more complicated.

result = f (intelligence, looks, charisma, effort, colleague-colleague relationship, colleague-boss relationship, opportunities, office politics, local politics, global politics, local economy, global economy ... )

Still think the result is deterministic? Let's have a thought scenario:

You might be smart, you might be willing to work hard, but when you graduate, the economy just recovered, the companies are not employing yet, you think you better settle fast for any decent job else you might die of hunger. Finally, with luck or skill you found a great job with great prospects.

You take up the job with great endeavour. You trade you time, your soul and pour all your brain juices in. The promotion, the increments should be coming your way soon. First year, nothings came, you preserve. Second year, nothing too, you get a little agitated but still preserve. Third year, nothing yet, just as when you are pondering why are you working so hard, you saw your less deserving colleague got promoted... a storm cloud have just gather over your head and drove a lightning bolt into your aching heart.

Other than intelligence and effort, there are so many factors that contributed to his success and your failure. This guy is better in handling office politics? He have a better relationship with the management? He has an opportunity to work on something that caught the attention of the management? The boss just likes him for some bizarre reason? You will feel unfair if you think working IS deterministic. However, if working is not deterministic in the first place, i.e. another random event, what is there to feel unfair about. You can increase your odds of success by trying to control as many variables in the above as possible, but nature have a habit of choosing someone to strike Toto no matter how small the probability is, and the person is not you.

In fact, education is probably one of the few events in your life that is deterministic. Work is random, raising a child is random no matter how hard you discipline or teach. Health is random no matter how careful you eat or how hard you exercise. Relationship is random, no matter how much tender loving care you put in. However, though you can't control the outcome, you can dramatically increase the chance of success in each of the above undertakings if you do put your heart to it.

Life is fair to those who see it, it's unfair to those who don't.

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Image sources (from the top):
Figure 1: Thundercloud (http://www.cartoonstock.com/directory/t/thundercloud.asp)