Management of People at Work

Interdependence:

• Country’s relative position with regards to others, when it changes, its usually for the worse and not the better.

• North Korea is very isolated, but not completely, because it will need to get resources from other people, and to feed their own people
• No country can carry out its policies without keeping an eye on what other countries are doing.
• Quantitative easing policies
• Malaysia, Indonesia – Trading with them – when Singapore became more independent, we started trading with other countries. China has been trying to get more Asia countries to trade using RMB.

• Political ideas and economic concepts are pretty linked.
• International cooperation

• 2 or more countries coming together to sign Free Trade Agreements (FTA)
• TTIP - Transatlantic Trade and Investment Partnership, TPP – Transpacific Partnership
• Excluding Russia and China, politics, struggle over Ukraine, part of it want to join EU, and the other part wants to join Russia

• Comparative advantage, specialization, economies of scale

• When you have to manufacture something, you think of the target market and the target demand.
• We need to have something attractive to bring foreign investments to Singapore, as there are many things we are lacking in, such as a domestic market and the necessary skills.
• Such is dependent on local policies, such as our willingness to allow foreign labour
• Skills, because we need quality goods to make a living, and to be efficient to reduce costs
• Luxury brands: defies law of demand, the higher the price, the more demand. Something of which we have a pricing power due to its branding – BMW, Rolex, Ferragamo,
• You go overseas, look for Singapore brands, cannot find = signal that something is pretty wrong with our brands

• Protectionist measures and comparative devaluation to increase competitive advantage in international trade
• Developing countries

• Becoming poorer and poorer
• Before opening up, countries’ Ideologies, social structure, policies affect the prosperity of the country – China, USSR, Eastern Germany, India – showing signs of progress
• Singapore is one of the rarer ones to improve

Globalization and international trade

• Components:

• Services and goods – services are hard to trade
• People – migration

• Skills mismatch, mckinsey report.
• America, which is lacking in STEM skills (Science, Technology, Engineering, Mathematics. Countries that excel in STEM have economies that are generally doing better. America face a dilemma, because they lack STEM skills, but their unemployment rate don’t allow them to import foreign talent. Countries like America, Europe, Japan
• Japan with an aging population. Most common shops in malls are changing, used to be more catered for the younger generation, but nowadays its more catered to the older generation.

• Investments

• Short term capital flow – hot money – money in and out within a period of one year, very dangerous
• Currency mismatch – your liability and investment currency is different can affect your bottomline drastically

• Problems: when liability and investment period is different (short term vs long term / appreciation and devaluation of different currencies

• HDB loans is stable, is good???? Commercial banks will foreclose on you if you cannot pay. But HDB – political institution – means government to help you. Your HDB flat will stay with you even if you go bankrupt, but private properties can be taken.
• America Federal Interest rates pegged to mortgage rates

• Forces driving globalization

• Technology

• Internet, offshoring, digitization
• Drive transportation modes, shipping, climate change – arctic circle melt means shipping routes will bypass straits of canal etc, so our ports will be drastically affected.
• Singapore has one of the lowest costs at ports, because we do 24/7.

• Trade negos

• Latest wave of globalisation (1980s)

• China began to open up, everyone started to open up, Russia etc.
• 1990 – india got into crisis and started opening up
• Policies can keep people poor for many years
• Indian decided to take another route to opening up compared to China
• Allow MNCs to come into the country, learn and replicate from them
• Sacrifices have to be made for progress to happen, which many times, resulted in political tension. Such as pushing out NTUC, robbing the provision shop owners’ source of income, losing votes, but progress can be made.
• Cannot be tied down by politics and fear of competition – discriminatory practices and dependent on agricultural etc

• When countries start industrializing, they start from labour-intensive industry

• Dynamic CA vs Static CA
• Technology allow us to use land, labor more efficiently, such as a powerful pump pumping water up to the 70th floor, and robots
• When things are stagnant and undergoing drastic changes, it’s up to the government to devise policies to calibrate and counter the negative side effects, such as introducing more automation into the production process

• Competitive advantages drivers
• Foreign outsourcing / offshoring

• Technology facilitates offshoring of white collar jobs
• Offshoring puts a limit, a cap on how much one is able to earn in Singapore
• We need to know what affects our limitations to earn and progress
• Hence there are many complains and cries for policies to restrict offshoring
• Americans – 17.5% of gdp earned from healthcare, shows how sick americans are.
• Global supply chains

• Any rise and fall in demand will affect the entire chain
• Japan’s products falling in quality, because of outsourcing and rise in temporary jobs (working for subcontractors)
• On-demand economy – creation of temporary jobs, affects your morale and skills

• Fall of countries

• Fiscal, physical – overeat and obese, cannot fight HAHAHA
• Pensions create so much problems because of increased longevity
• Minimum wages – you can increase it but you can never cut it, a political move that cannot be escaped from, because whichever party promises minimum wage will get votes, if used competitively by parties, it will hurt the nation and the individuals. As the lower end industries and older people will lose out in terms of productivity and hence lose their jobs.

• Exporting and importing of goods and services

• High imports and high exports, due to a lack of natural resources, we need to import parts and components to manufacture the final product for export
• Foreign exchange is a confusing bitch

• Immigration of foreign talents / workers (open economy)

• They bring different perspectives, work hard and increased productivity
• Bring international competition, an incentive for improvement
• Weaken monopolies
• Competition

• Foreigners displace jobs from locals, but on the other hand, spurs competition and raises benchmark, without the competition, the benchmark would be unknown and people would not improve themselves and strive harder.

• Complementarity

• Foreigners do their part to drive demand for locals for jobs, and also drive job creation, ironically

• Growth

• People bring their wealth with them, and if they are philanthropic enough, they use their wealth to help create jobs, i.e. sponsoring start-ups.

• Protectionistic measures

• Tariffs etc, hurts country’s trade