The infamous notion advocated by Union Chief Lim Swee Say on Cheaper, Better, Faster (CBF) economy might be a bad model, however it works for “still” developing countries but obsolete for countries making transition into an advanced knowledge economy.
Elaborating what CBF means according to Union Chief LSS – Cheaper is to be more productive, Better is more capable, Faster is more adaptable.
Such model as modus operandi, it fails to create niche value and is thus always undercut by developing countries with cheaper operating costs. Cheaper products & services also prevails over high productivity. Cheaper better faster comes with detrimental effects often at the expense of workers in the name of economic growth.
Singapore presently a nation with strong currency, can never be cheaper without cutting back profits and leading to declining wages thus compromising the quality of life of S’poreans workers. The consequence of such model appears contrary to the fundamental governing principle, to improve the lives of its citizens.
Let’s take a look at one of the examples;
which abide to CBF rule and leads to eventual demise of photography company Kodak (Read more):
“Far too often, companies spend most of their innovation dollars on making their products cheaper, operate better, faster or do more. (HBS Press, 1997). Most R&D, in most industries, and for most companies, is spent trying to sustain an existing technology – not identify or develop a disruptive technology that would have far higher rates of return.
While this is easy to conceptualize, it is much harder to understand. Until we look at a storied company like Kodak.
Kodak invented amateur photography, and was rewarded with decades of profitable revenue growth as its string of cheap cameras, film products and photographic papers changed the way people thought about photographs. Kodak was the world leader in photographic film and paper sales, at great margins, and its value grew exponentially!
Of course, we all know what happened. Amateur photography went digital. No more film, and no more film developing. Even camera sales have disappeared as most folks simply use mobile phones.
But what most people don’t know is that Kodak invented digital photography!
They were the first to create the technology, and the first to apply it. But they didn’t really market it, largely because of fears they would cannibalize their film sales. In an effort to defend & extend their old business, Kodak licensed digital photography patents to camera manufacturers, abandoned R&D in the product line and maintained its focus on on its core business. Kodak kept making amateur film better, faster and cheaper – until nobody cared any more.
In Jan 2012 Kodak filed for bankruptcy in a bid to survive a liquidity crisis after years of falling sales related to the decline of its namesake film business. (link)
Kodak’s Plummeting Share Price
Unfortunately, there are few companies that make the transition. But there have been thousands that have not. Companies that had very high market share, once made a lot of money, but fell into failure because they invested inbetter, faster, cheaper rather than innovation.”
To thrive in an advanced knowledge economy, the economics are not of scarcity, but rather of abundance. Knowledge enhanced products or services can command price premiums over comparable products with low embedded knowledge. It require new ideas and approaches from policy makers, managers and knowledge workers. The new model should instead be Creativity, Innovation, Receptivity (CIR).
Creativity is thinking up new ideas. Innovation is doing in a new way. And Receptivityis to exchange ideas freely. To make this transition, the government must liberalize many of its current policies and allow free exchange of ideas, a la freedom of expression, and to create an innovative environment that foster creativity, soft skills and independent critical thinking. Government must make perceptible improvement to education and civil liberties, lower the barriers of restriction and stifle information suppression. The old cheaper better faster model probably outlast its usefulness and reach the stage of redundancy.
Since Singapore reached “first world nation” status in the early 2000s. Why is the Singapore economy and workforce yet to be transformed in this aspect? – what is your standpoint, leave your comments below.
Bullshit Politician
*The author blogs at http://bullshitpolitician.wordpress.com/