Have High Expectations Of Our Young, says Bakri Musa


September 22, 2014

A Modest Proposal for the Champions of Ketuanan Melayu

First of Three Parts: Have High Expectations Of Our Young

by Dr. M. Bakri Musa, Morgan-Hill, California

Hardly a day goes by without those self-proclaimed champions of Malay race and defenders of Malay rights frothing at the mouth demanding that they (non-Malays) do this or that so we Malays could be the unquestioned Tuans (masters) of Tanah Melayu.

Dr.MahathirWhen these Hang Tuah wannabes are not consumed with their theatrics of brandishing their ketchup-soaked kerises, they are obsessed with denigrating our culture and national character. To them we are lazy, dishonest, and know no shame.

Strip the rhetoric and those expressions of frus (“Manglish” for frustration) and fury are understandable if not predictable. We are frustrated because with the billions spent on us and the ever-generous special privileges heaped upon us, we still lag behind the others. We are furious because despite not being mollycoddled by the government, they thrive.

We are so angry that we cannot even pause to ponder perhaps they prosper precisely because the government leaves them alone and does not direct their lives, or that the massive “help” we get is anything but that. There is an art in helping. Done right and you open the door to the world for those you help; done wrong and you have a dependent invalid.

Our futile and unenlightened reactions do not solve our dilemma; they hinder by hiding the glaring reality and fundamental issue: Malays are not competitive or productive.

Malaysia cannot be stable much less thrive if a sizable and readily identifiable segment of its population (more so if they consider themselves “special” or “princes and princesses of the soil”) is marginalized through lack of competitiveness or productivity. Then all Malaysians would suffer. If Malays are competitive, then Malaysia would be too.

At the individual level, if Malays are competitive then we would be Tuans even if we are not in Tanah Melayu. I can attest to that.

Because we are not productive, our hard work does not generate commensurate returns.That disheartens us. To aggravate matters, those whom we deem “successful” get there not through their own effort but connections, corruption, and other classic manifestations of a rentier economy. That discourages us even more; worse, it encourages us to emulate them, meaning, do anything but an honest day’s job.

Our laziness and dishonesty are the result and not the cause of our lack of competitiveness and productivity. Our newly-acquired value system where honest hard work is denigrated only aggravates matters. Once we acknowledge that we are not competitive or productive, and appreciate the various contributing factors, then we can begin crafting effective remedies. That demands hard work and much thought, with little time left to shout or be angry.

Enhancing our competitiveness and productivity would enable us to contribute to rather than depend on the state. Apart from benefiting the economy, that would also dignify our values and culture, quite apart from reducing our envy for the achievements of others. We would also be less likely to be swayed by the demagogues amongst us.

It is too late and would do little good to focus on the old, rigid, or senile. Besides, they are the not the future of our race or country. Likewise the Mat Rempits; their die is already cast. As per our ancient wisdom, melentur buloh biarlah dari rebung nya (if you wish to bend bamboos, begin with the shoots). Not just any sapling but those promising ones, the ones at our Sekolah Berasrama Penuh (SBP, fully residential schools).

How good a job are we doing at shaping those vigorous saplings? SBPs get the top students, best teachers, and more than their fair share of resources. However, visit the top universities and the Malaysians there are from other than our supposedly elite SBPs. This sorry state should alarm those champions of Ketuanan Melayu.

Consider the oldest SBP, Malay College Kuala Kangsar (MCKK). It only recently started its InternationalHisham_Keris Baccalaureate (IB) program. Prior to that the school, like most SBPs, was but a glorified middle school; its students had to go elsewhere to matriculate. Despite the luminaries on its board (with Raja Muda of Perak, now Sultan, chairing it), MCKK took over a decade to implement its IB program. Imagine the pace at lesser institutions! MCKK’s female counterpart, Tunku Kurshiah College, remains an expensive middle school.

IB is a rigorous academic program, and recognized as such worldwide. Despite or perhaps because of that, few of MCKK students enroll in the program. That speaks volumes of them, and their perception of the school after spending five years there.

It may surprise many but the two schools that regularly send the most students to elite universities are not in Britain or America but South Korea (Daewon, established in 1984; and Minjok, 1997). Both may be new and in a non-English speaking country, with their students non-native English speakers to boot, but they bested the Etons and Exeters.

It is a sad commentary that in over a century MCKK managed to send only a very few to the Ivy League, fewer than peas in a pod. If Malaysia aspires to have a Nobel laureate by 2020, as expressed often by many, then may I suggest that it first try a less lofty goal, as with sending a student or two to Harvard or Yale? This should be SBP’s yardstick. There is no point in having these expensive SBPs if their students were to end up at UiTM, Creekville State U, or the University of Ulu Britain.

Our SBPs do not lack for potential Ivy League candidates. Fulfilling their aspirations would require strong effort not just from them but also the entire community, from teachers and governing boards to parents and policy makers. Failure to do that would provide potential recruits for future Mat Rempits and latter-day Hang Tuahs.

SBP students must and should end up at top universities. There must be acceptance of and striving towards this singular goal. The scarce and expensive resources of SBPs should not be expended on those with lesser expectations. If the students do not share such high aspirations, then they should not be at a SBP. The students at Minjok and Daewon are very much aware of this high expectation when they apply for admission.

There should not be any equivocation, or the adding of extraneous fuzzy themes like loyalty to “bangsa, bahasa, agama, negara.” Those are nebulous and not readily measurable anyway. The cause of our bangsa, bahasa, negara, agama is best served with these students attending elite institutions.

By “elite” I mean the top dozen in Britain, the half a dozen in Australasia and Canada, and a hundred or so in the US (University of California level and above). You do not need expensive SBPs to prepare for the rest.

Mahathir and his wardsSBPs are expensive, so we must explore innovations to reduce the cost so many more could benefit. These include dispensing with the boarding component, inviting private sector participation, and making those who could afford pay their way.

Take the last item. To non-Malays, the billions spent on SBPs are for Malays; there is no denying that. However, visit any SBP on weekends; the parking lots and beyond are filled with expensive late-model cars of wealthy parents.

If I had been spared my children’s educational expenses I could have a new Lamborghini and more every year. If those rich Malay parents had been made to pay the full freight, they would not send their children to SBPs, thus opening more slots for deserving poor kampong kids. That would truly be helping Malays.

When I went to Malay College in the early 1960s, there was a quantum leap in my living standards. I studied under the cool comfort of the fluorescent lamp instead of the searing heat of a kerosene one, and enjoyed piped water instead of having to haul it from a well. I was also spared endless hours waiting for the erratic village school bus. For my sons and grandsons however, sending them to Malay College would be a significant downgrade. Besides, that would deprive other young Bakris now in the kampongs of their opportunity.

Contrary to popular perception, making SBP free does not “help” Malays. Far from it! As well-to-do parents do not factor in the costs of their children’s education, they do not save. In the aggregate that contributes to the declining savings rate; and with that, capital formation that is so essential to economic growth. Worse, we corrupt the values and mindset of those wealthy Malays, turning them into welfare recipients. They in turn transmit those values to their children; the subsidy mentality and culture of dependency ingrained for generations. That is the most destructive part.

Next Week – Second of Three Parts: Molding Our Students

Academic Freedom and Freedom of Expression Denied


September 7, 2014

Tokyo, Japan

Azmi Sharom Case: Academic Freedom and Freedom of Expression Denied

by Terence Gomez

http://www.malaysiakini.com

Azmi UM

When Azmi Sharom, Associate Professor of Law at the Universiti Malaya, was charged under Malaysia’s Sedition Act for providing a legal opinion on a constitutional matter, it shocked the academic community.

It was particularly alarming to academics as it is now well acknowledged that the Sedition Act is an obsolete relic of British colonial rule, introduced to curb dissent. Even Prime Minister Najib Razak had expressed the view, about two years ago, that this Act had to be repealed.

Najib’s government is now preparing a National Harmony Bill to replace this Act. Azmi was, however, one of a number of people, many of them politicians in opposition parties, to be charged under this Act in the recent past.

The issue that Azmi had commented on was in response to the question as to how the next Selangor menteri besar should be selected. Azmi’s views were published in the online portal of The Malay Mail. He is quoted as saying two things in this article: “You don’t want a repeat of that, where a secret meeting took place” and “I think what happened in Perak was legally wrong. The best thing to do (in Selangor) is do it as legally and transparently as possible.”

It was baffling that these opinions were viewed as being seditious. In fact, the Bar Council, in its statement on Azmi’s case, is quoted as saying that his comments “cannot, by any stretch of the imagination, constitute sedition”.  Azmi, in response to this charge, has argued that his “statements were based on established case laws and democratic principles” and that he views this charge against him as “a blow to academic freedom and the freedom of expression”.

Like the Bar Council, many have viewed this sedition charge as perplexing. It is not when we consider that this charge has been proffered against Azmi. His statement on the Selangor political crisis and his response to the charge against him are a reflection of Azmi’s now long-recognised willingness to talk the talk of justice.

Through his regular – and popular – column in The Star, to which he has been contributing over the past few years, Azmi has been providing, fearlessly, critical feedback on major flaws in society, the economy, academia and the legal system. The overriding impression one gets is that this charge is a blatant attempt to curb dissent and in Azmi’s case, a punitive act to silence critics.

Browbeat academics into obedience

Najib2The irony of this charge against Azmi is that the government has been persistently calling on academics to ensure their research is deployed so as to have an impact on society. In fact, government funding for research comes with the strict stipulation that the findings must contribute to the betterment of society.

Meanwhile, in the public domain, academics have now long been subjected to much criticism of their inadequate contribution to society as public intellectuals.

A growing lament, and one apparently indicative of declining academic standards in Malaysian universities, is this: where have all the public intellectuals gone? With this sedition charge against Azmi, the government is clear on one thing: academic feedback is warranted, but not on matters politic, specifically those that suggest the need for reforms.

This act against Azmi will compel academics to rethink any aspiring notions they may have entertained to be in the forefront of intellectual discourse about ways and means to solve the problems that ail the Malaysian economy and society.

The challenge to academics – and the general public if they value the need to have intellectually vibrant tertiary institutions – is to call on the government to stop what amounts to an attempt to intimidate academics into obedience, an act that will only serve to further undermine the credibility of Malaysian universities.

A large number of academics, about 300 of them from across Malaysia, have publicly stood by Azmi, a clear collective commitment of their resistance to any attempt to stifle academic freedom and to browbeat university faculty into silence.

There are other crucial reasons why the government should revoke this charge against Azmi. An obvious repercussion of this act is that it will diminish, even subvert, critical discourses in the universities which can seriously hamper high quality scholarship. This will, in turn, undermine meaningful tutelage which can have a significant bearing on the quality of graduates Malaysian universities now produce, an issue already viewed with much concern.

The government cannot call on academics to produce graduates with the capacity to think creatively, a clear project of educational empowerment, while stifling academic freedom.

READ This by Zainah Anwar :

http://www.thestar.com.my/Opinion/Columnists/Sharing-The-Nation/?c={CF94E7B6-DC3C-4406-9D3B-05844C0EC1FC}

Let the Khmer Rouge Record Show


August 27, 2014

The Opinion Pages | Op-Ed Contributor

Let the Khmer Rouge Record Show
Cambodia Shouldn’t Censor the Khmer Rouge Court’s Files

By Craig Etcheson,
August 26, 2014

PHNOM PENH, Cambodia

Former Khmer Rouge leader Nuon Chea appeEarlier this month a United Nations-assisted tribunal in Cambodia handed down long-overdue judgments against Nuon Chea (pic. left) and Khieu Samphan(right) for their roles in the catastrophic Khmer Rouge regime of 1975-79. Nuon Chea, the Deputy Secretary of the communist party, and Khieu Samphan, the President of the Khmer Rouge state, were sentenced to life in prison for crimes against humanity.

For some observers, this seemed like too little too late for too much money. Eight years have passed since the Khmer Rouge tribunal — officially known as the Extraordinary Chambers in the Courts of Cambodia (E.C.C.C.) — began operations, it has cost more than $200 million, and these verdicts concern only a fraction of the total charges. Yet the delay was a result of the extensive procedural protections rightly afforded the accused and the complexity of the case: The indictment is the most complicated since the Nuremberg trials. And it was worth the wait, not least because the tribunal has amassed an extraordinary cache of documents and testimonies.

But now there is reason to fear that this database, a major contribution to existing scholarship on the Khmer Rouge era, will not be made available to researchers after the E.C.C.C. fulfills its mandate. Given the Cambodian government’s unease about its connections to the Pol Pot regime, these extraordinary archives risk being censored or put under semipermanent lock and key.

Between the fall of the Khmer Rouge regime in 1979 and the launch of the E.C.C.C., historians assembled significant evidence detailing the mayhem. After 1995, the Documentation Center of Cambodia, an independent research institute originally established by Yale University, gathered tens of thousands of previously unknown internal documents from the Khmer Rouge regime, as well as thousands of interviews with both victims and Khmer Rouge cadres. (I was once a director of DC-CAM.)

That material was then made available to the E.C.C.C. Scholars from around the world also shared notes and interviews. And then the court itself sent out investigators across Cambodia to try to resolve ambiguities in the existing record. More than 1,000 interviews were collected as a result. Another major contribution were the testimonies of the nearly 3,900 victims who have joined the proceedings as civil parties — a feature of the E.C.C.C. that makes it unique among all international and hybrid criminal courts — plus thousands of complaints submitted by other victims.

Killing Fields

All this evidence was gathered in a sophisticated digital database, which now contains more than one million pages of information, thousands of photographs and hundreds of films and audio recordings. The material is readily searchable, allowing all parties in the case to make connections that had previously eluded researchers and to develop a finer-grained understanding of the Khmer Rouge regime.

I worked as an investigator for the prosecution in 2006-12, and our office used all this information to construct an elaborate model of the notoriously secretive Khmer Rouge organization, from center to zone to sector to district to commune. We created more than 1,000 organizational charts depicting the staffing of political, military and governmental units. These gave us an unprecedented insight into the chain of command among all echelons of the organization across the entire country, and they graphically revealed the waves of internal purges that swept through the Khmer Rouge.

Such cross-referencing helped prove charges against Nuon Chea and Khieu Samphan, such as some crimes committed after the Khmer Rouge seized the capital, Phnom Penh, on April 17, 1975, and then forcibly emptied it of its two million residents. Drawing on hundreds of accounts from people who passed through checkpoints on major roads out of the city, the trial judges concluded in their recent judgment that killings of officials from the regime that the Khmer Rouge deposed in 1975 were not isolated acts by undisciplined soldiers, but evidence of a systematic pattern resulting from a centralized plan.

Many more connections can be drawn from the E.C.C.C. archives, some with a direct bearing on the charges that will be considered in the next phase of the leaders’ trial. That section of the case includes forced marriage, among other charges. Several NGOs had already done pioneering work to gather evidence of sexual crimes during the Khmer Rouge regime. But it is the civil-party applications and victims’ complaints collected by the E.C.C.C. that make clear just how often rape was committed as a result of the Khmer Rouge’s policy of compelling people to marry and forcing them to consummate the unions.

And then there are insights not of direct relevance to the leaders’ trial but invaluable to understanding both the Khmer Rouge regime and contemporary Cambodia. For example, a review of the minutes of meetings of the Standing Committee — the Khmer Rouge’s ultimate decision-making body — and telegrams between the military leadership and division commanders has revealed the astonishing scope of China’s military assistance to the Khmer Rouge, in terms of matériel, logistics and personnel. And the E.C.C.C. archives contain extensive information about the operation of the so-called Eastern Zone under the Khmer Rouge regime, from which emerged some senior leaders in the government today.

Hun SenPrime Minister Hun Sen, Kingdom of Cambodia

These matters are controversial, however. The ruling party of Prime Minister Hun Sen, which has been in power since the Khmer Rouge were deposed in early 1979, has long been touchy about its exact connections to the Pol Pot regime. Some senior party members have published autobiographies claiming that they joined the Khmer Rouge movement only in 1970 and in response to a call from the former king to rally against the military dictatorship that had just overthrown him — assertions that are contradicted by material in the E.C.C.C. archives. And in 2009 some party leaders — the president of the national assembly, the finance minister and the foreign minister at the time — failed to answer an E.C.C.C. summons to answer questions during the investigation.

Such sensitivities are the reason that the court’s archives may be vulnerable to tampering or being sealed after its work is completed. The risk is all the greater because the United Nations, the court’s donors and the Cambodian government have agreed that once the trials are over the E.C.C.C.’s database should remain in Cambodia and under the control of the Cambodian government.

The United Nations and the donors must persuade the government to ensure that the court’s archives in their entirety are opened to historians. Anything less would be to squander the E.C.C.C.’s legacy and an incalculable loss to the historical record.

Craig Etcheson, a former investigator in the Office of the Co-Prosecutors at the Extraordinary Chambers in the Courts of Cambodia, is a visiting scholar at George Mason University.

A version of this op-ed appears in print on August 27, 2014, in The International New York Times.

http://www.nytimes.com/2014/08/27/opinion/cambodia-shouldnt-censor-the-khmer-rouge-courts-files.html?ref=opinion

Symmetrical characters, parallel fates


August 19, 2014

Symmetrical characters, parallel fates

COMMENT by Terence Netto@www.malaysiakini.com

Men of destiny seek proof of their greatness by exercising a license to go too far, and as the fear grows that destiny may have played a terrible joke on them, they double and redouble the stakes on the wheel of fortune. In this way they destroy themselves.-Terence Netto

hype_najib1Now that the cat has sprung out of the bag and is dashing about among a wider public, the only news would be if anyone has died of shock from the revelation that Dr Mahathir Mohamad has withdrawn support for Prime Minister Najib Abdul Razak.

After months of premonitory sniping at the Premier by his satraps, notably A Kadir Jasin and Zainuddin Maidin, the man himself has come out in the open with a formal declaration of hostilities. There is no more cogent example of déjà vu nor self-parody than the producer himself reiterating he is about to re-start a familiar business – the demolition of a sitting PM.

A fortuitous benefit of this incipient extravaganza – to the federal opposition, Pakatan Rakyat – has been the confirmation that their self-destructive shenanigans in Selangor have furnished the opportunity to the premier demolisher of incumbent PMs to fix on this as the most opportune time for the unleashing of his decanal decapitation of national head honchos, not to mention a few deputies as well.

The wonder is that anyone at all, at this advanced juncture of their career trajectories, could be surprised at how the two protagonists, one of the drama about to start and the other of an already running one in Selangor, confirm a truism of classical Greece – that character is fate.

Character here is taken to mean the way in which a person confronts the things that happen to him, a number of which may come about as a consequence of his characteristic behavior. Fate is the sum of the decisive things that happen to a person, whether as a result of his characteristic behavior, or fortuitously, at the behest of some transcendent power.

That the characters of Mahathir and Anwar Ibrahim have fed off each other is by now a staple of Malaysia’s modern history. Malaysians are beginning to realise that the one’s career could not have been possible without the other and vice versa.

Truly, the reformasi movement would not have been catalyzed into something urgent and insistent without what Mahathir did to Anwar in September 1998 and how the latter reacted to the events.

Before September 1998, the movement was an inchoate yearning; after Anwar’s jailing and obloquy, reform became a national agenda. Mahathir would not have been able to prolong his tenancy of the PM’s office – 22 long years – without Anwar’s lieutenancy for 16 years of that tenure.

Certainly, the accretion of power to the office of the PM and UMNO President could not have taken place without Anwar’s tacit support, as heir presumptive to Mahathir.

The long running drama of their interaction since they first met in 1971 and their influence on the life of this nation over the last four decades is so pivotal that our history itself becomes confused with their own biographies which goes to illustrate historian Thomas Carlyle’s theory that humanity advances by means of these demi-gods or ‘heroes’.

Succumbing to the danger of self parody

But as the philosopher Ralph Waldo Emerson cautioned: “Every hero becomes a bore at last”: the two are presently in danger of inducing a yawn in arenas they once bestrode as giants. If it happens it would be due to their succumbing to the danger of self-parody each is tempted to flirt with, Mahathir more so.

Tun Dr. MahathirMen of destiny seek proof of their greatness by exercising a license to go too far, and as the fear grows that destiny may have played a terrible joke on them, they double and redouble the stakes on the wheel of fortune. In this way they destroy themselves.

By claiming at the commencement of his unseat Najib campaign, after the fashion of Brutus, that it is not because he loves his leaders less but that he loves the people and country more, Mahathir is parodying what Anuar Musa, then a young delegate from Kelantan to the UMNO general assembly in 1983, who quoted from the Shakespearean play Julius Caesar the words Brutus used before stabbing Caesar. The Roman emperor was surprised that a friend like Brutus could be part of squad of assassins with regicide in mind.

Anuar cited the quotation in the course of rhetorical flights faintly critical of Mahathir’s leadership of UMNO. Mahathir’s response was characteristically brusque. “Brutus stabbed Caesar” he reminded the UMNO delegates. In other words, back-stabbers are back-stabbers, their lofty motives notwithstanding.

If Mahathir unseats Najib, the wheel would have come full circle in his career: he began his ascent to the top of the greasy pole by destroying one UMNO President (Tunku Abdul Rahman) and is set to end his career by destroying the son of the man (Abdul Razak Hussein) who gave him the chance to rise after a display of Oedipal rage against the Tunku.

If PKR allows Anwar to convert the party into his personal fiefdom, his thrust to the top of the totem pole that began with his rebellion against nepotism, cronyism and corruption in 1998 would flirt with what could well be a fatal contradiction. Not for the first time in history would pivotal allies-turned-adversaries have symmetrical characters/parallel fates.

Malaysia–the best predictors of electoral outcomes


July 14, 2014

Malaysia–the best predictors of electoral outcomes

Gotta’ keep on learning


July 13, 2014

Schumpeternomics: Gotta’ keep on learning

by (Tan Sri) Dr. Lin See-Yan@www.thestar.com.my (07-12-14)

Lin See-YanI JUST returned from the summer meeting of the board of governors (on which I am a long-standing member) and the board of trustees of the Asian Institute of Management (AIM) in Makati, Manila. It celebrated its 45th anniversary…

To mark the occasion, AIM held its second Asian Business Conference against the backdrop of an emerging ASEAN Economic Community (AEC) by 2015. It was well attended by a wide cross-section of Asian businesses, research institutes and universities, under the banner: “2015 Approaching: Priming for ASEAN Integration.”

I spoke at the strategic session on banking and finance with particular focus on the need for Asia (and indeed ASEAN) to keep on innovating to create a truly learning society, in order to maintain its competitive edge and remain relevant in an increasingly hostile and uncertain world. To survive, we just gotta’ keep on learning!

Technological progress

I learned early as a Harvard graduate student in the 1970s from no less than Nobel laureate Robert Solow at the Massachusetts Institute of Technology (MIT) down the Charles, that rising output and incomes can only come about in a sustained way from technological progress (TP), not from mere capital accumulation. Put simply, Solow repeatedly emphasised that TP comes from learning how to do things better; indeed, there’s always a better way.

As a practising banker and economist at Bank Negara after my PhD, I quickly undertstood that much of the productivity increases we see come from small incremental changes – they all add-up, other than the lumpy gains arising from dramatic discoveries or from unpredictable phenomena. It all starts with nurturing our education system and the process of its development to ensure youths are properly educated, not just in terms of literary, quantitative and scientific skills, but also with the right moral values and civic outlook.

Broadly, along what Nobel laureate Joseph Stiglitz (pic) has been advocating – it always makes goodJ Stiglitz sense “to focus attention on how societies learn, and what can be done to promote learning, including learning how to learn.”

Innovation and creative destruction

The seeds of the critical role of innovation in economic growth were first planted about a century ago by Harvard economist and political and social scientist Joseph Schumpeter, a contemporary of John M. Keynes. His economics (hence, Schumpeternomics) is based on the ability and capability of the market economy to innovate on its own.

I recall reading his 1939 book Business Cycle: A Theoretical, Historical and Statistical analysis of the Capitalist Process, where he wrote “Without innovations, no entrepreneurs; without entrepreneurial achievement, no capitalist returns and no capitalist propulsion. The atmosphere of industrial revolutions – of “progress” – is the only one in which capitalism can survive.”

So, Schumpeter went about challenging conventional wisdom in three areas: (i) misplaced focus on competitive markets. He contended that what matters was “competition for the markets, not competition in the markets,” as rightly pointed out by Stiglitz. It is competition for the markets that drives innovation. Sure, this can (and do) result in the rise of monopolies; still this would lead to improved living standards over the long haul (eg. Microsoft, Nokia – acquired in 2013 by Microsoft). (ii) undue focus on short-run efficiency which can be detrimental to innovation over the long-term – classic example is helping “infant industries” learn.

But governments should not be in the game of picking winners; the market can do this better (witness Obama’s failed “clean energy” projects or Malaysia’s wasteful car-maker Proton). Sure, there are exceptions where government invests in research that has since led to development of the Internet and discovery of DNA with enormous social benefits.

Schumpeter

(iii) Innovation leads to creative destruction – it can (and do) wipe out inefficient industries and jobs. The Internet has turned businesses from newspapers to music to book retailing upside down. In their place, more efficient businesses have popped up. In his biography of Schumpeter – Prophet of Innovation, Thomas McCraw wrote: “Schumpeter’s signature legacy is his insight that innovation in the form of creative destruction is the driving force not only of capitalism but of material progress in general. Almost all businesses, no matter how strong they seem to be at a given moment, ultimately fail – and almost always because they failed to innovate. Competitors are relentlessly striving to overtake the leader, no matter how big the lead. Responsible business people know that they ignore this lesson at their peril.”

In 1983, the 100th anniversary of the birth of Schumpeter and Keynes, Peter F. Drucker proclaimed at Forbes that it was Schumpeter, not Keynes, who provided the best guide to the rapid economic changes engulfing the world, according to McCraw.

Higher education

The business of higher education has changed little since Plato and Aristotle taught at the Athenian Lyceum. With government patronage and support, close to 4 million Americans and 5 million Europeans will graduate this summer. Emerging nations’ universities are expanding even faster. I was told in Shanghai last month that China has added 30 million university places in the past 20 years.

Indeed, I do see a revolution coming for three main disruptive reasons:

  •  Rising costs – Baumol’s disease has set in, i.e. soaring costs reflecting high labour intensity with stagnant productivity; for the past two decades, costs have risen 1.6 percentage points above inflation annually.
  •  Changing demand – a recent Oxford study contended that 47% of occupations are now at risk of being automated and as innovation wipes out jobs and drastically change others, vast numbers will be needing continuing education.
  • Fast moving TP will change the way education is packaged, taught and delivered. MOOC (Massive Open Online Course) today offers university students a chance to learn from the world’s best and get a degree for a fraction of today’s cost. Harvard Business School will soon offer an online “pre-MBA” for US$1,500 (RM4,778)! The reinvention of universities will certainly benefit many more than it hurts. Elites like Harvard, MIT and Stanford will gain from this creative destruction process. Education is now a global digital market.

What then, are we to do

Corporate giants come and go in a competitive economy. Microsoft and Nokia used to rule the digital world. Now they don’t. No monopoly is permanent, unless enforced by government, which as everyone knows hardly changes, even as the rest of the world passes it by. In the United States, it is reported that the administration wants to prevent Apple’s iTunes and AppStore from abusing the network “lock-in” created by Apple’s tech ecosystem. But the judge has since ruled that “I want Apple to have the flexibility to innovate.” That’s something, isn’t it?

economics-poster-smallMy professor at Harvard, Nobel laureate Kenneth Arrow, used to extol about the importance of learning by doing. So, those who want to innovate, let them just do it – hopefully with no government intervention even though there is a compelling “infant” argument for industrial protection, which can be a double-edged sword when it comes to learning and innovating.

Most of the time, the infant seldom grows up. But reinventing the ancient institution of higher learning will not be easy. EdX, a non-profit MOOC founded (and funded) in May 2012 by Harvard and MIT, is now a consortium of 28 institutions worldwide. No one knows how big the online market will eventually be. It’s more akin to online airline-booking services – expanding the market by improving the customer experience.

Still, innovation at MOOC will definitely reduce the cost of higher education, grow market size but with widespread creative destruction collateral damage, and turn inefficient universities on their heads. MOOC estimates that university employment can fall by as much as 30% and 700-800 institutions can shut-down. The rest have to reinvent themselves to survive. Our learning society will change forever, whether we like it or not.

Former banker, Dr. Lin See-Yan is a Harvard educated economist and a British chartered scientist who writes on economic and financial issues. Feedback is most welcome; email: starbizweek@thestar.com.my. The views expressed are entirely the writer’s own.