Leaving a financial and parenting legacy

BEING a parent is a challenging job. It's a job that requires lifelong commitment, and you cannot resign from it even if you feel you can't cope. And what's more, parenting requires skills that are not obtainable from school, college or university. Parenting and managing money are the two most important skills that we learn from our parents or adults with whom we grew up, be they our grandparents, nannies or guardians.

As you go through the process of considering how to communicate with your parents and siblings about managing family wealth, you will realise the need to teach your children about money so that you are able to leave your own legacy behind for your children to communicate and manage money harmoniously as a family.

There is really not one proven or standard method of parenting and teaching children about money because of different personalities, behaviours and attitudes. We teach children about money based on how we were taught about money by our own parents or guardians, and from the environment in which we were brought up. Recall your childhood days, and how your parents taught you about money. Were you taught to save your pocket money or to spend it wisely?

Think about the environment you grew up in. Were there times when your parents had money problems and you often heard them argue about it? Or did your parents hide the fact that money was hard to come by in the family? Or were you pampered by your parents with toys, clothes and going out for fun activities and holidays?

Some parents have told me that because of the poverty they experienced during their own childhood, they now try their best to give their children a better life by lavishing them with the material goods and experiences that they themselves never had. By indulging their children, they are not allowing their children to experience financial responsibility.

Different parenting styles

While most parents learn parenting skills from their own parents or by observing others, they will accept some practices and discard others. Effective parenting requires interpersonal skills that can create some emotional demands. Experts in early childhood development say an important dimension of parenting is the style parents adopt when they interact with their children. According to Maccoby and Martin's parenting style typologies, there are four different parenting styles. Depending on the child's character, different parenting styles lead to different results:

1) Authoritarian parenting is a restrictive, punitive style in which parents exhort the child to follow their directions. The authoritative parent places firm limits and controls on the child, and allows little verbal exchange. These parents tend to be very strict and may control the children by limiting their wants and desired wants. In this case, the children may either grow up to rebel' by spending beyond their financial means to fulfil their childhood desires, or they may become very good at managing their money.

2) Nurturing parenting is a style that encourages the child to be independent but still places limits and controls on the child's actions. Extensive verbal give-and-take is allowed, and parents are warm and nurturing towards children. These parents often communicate and teach their children to spend their money wisely by explaining to them the importance of money.

3) Neglectful parenting is a style in which parents are uninvolved in the child's life. Children whose parents are neglectful often develop a sense that other aspects of their parents' lives are more important than they are. Children who grow up in this environment are often deprived of parental love and a sense of belonging in the family. As a result, they may grow up spending lots of money to fulfil their need for love from friends, and from their life partner. Or they may spend money to boost their self-esteem because of the lack of parental love.

4) Indulgent parenting is a style in which parents place few demands or controls on the children. These indulgent parents will let their children do what they want. Children with indulgent parents may often be spoilt by a variety of material things or an impressive lifestyle. The spending behaviour of indulgent parents may condition the children to spend more than they need or more than they can afford when they grow up.

Imagine a situation where the father is indulgent towards a child and provides gifts, toys, fun and pleasure, while the mother, on the other hand, is a disciplinarian with strict rules about gifts, toys, fun and pleasure. Who will the child prefer to be with, and who will the child learn more from? You and your spouse should decide on a best way to handle your children's money expectations. It is important to be consistent and fair to lessen potential family strife.

Communication

According to experts of child psychology, even from a tender age of 2 or 3 years old, a child learns by observation, and from conversations and experiences they have with adults. Hence, effective parenting warrants a tremendous amount of proper learning methods and communication skills. Understandably, today's parents are faced with more issues compared with their parents; the fact that today's younger generation is growing up in an era of media influence, technology advancement and the Internet makes parenting an even more challenging job.

It can be painful for parents to discipline and teach children about saving money, particularly when their children are easily influenced by their friends even as pre-schoolers. This is further compounded by the barrage of advertisements on television and online media that tempts your children with attractive toys, pretty clothes and accessories.

It does not really matter how much money you have or how much joy you derive from showering your children with material things. As parents, you have got to show some restraint and boundary. You don't have to feel guilty about scaling back on spending for your children. Your children may already have more than they need more clothes and shoes than they can wear, toys and games than they have time to play with.

Be mindful that while you are conscious of good money habits for your children, you need to ensure that your children's grandparents, godparents, aunties, uncles, or other adults around them do not indulge them too much with gifts. This may send your children the message that if they cannot get what they want from you, they can get it from them.

Family values 

In some situations, a couple may bring different views and values about money and parenting to the marriage. Because of personality, character, family and life experience differences, couples do face conflicting personal and family issues where money is concerned. Therefore, teaching a child about money really begins with teaching your child about the importance and meaning of life values as a family.

Honesty, integrity, teamwork, helpfulness, trust, love, family support, accountability, unity, filial piety, commitment, communication, sharing, spending time with parents and siblings are some of the most important family values that your children ought to know, even if they may be younger than six years old.

Constant messages to your children about how good family values are important in life, and that money cannot buy such values, are more important than parental love expressed in the form of material things for your children.

Teaching them important life values and let them know that money is a means to an end, and not for self-gratification.

Other than sending them to school to gain knowledge and social skills, the money skills that you teach your children from an early age are the most important life education you can provide them with and it actually starts at home. It is as simple as how you and your spouse manage money and communicate about money at home. Your good money skills will rub off on your children.

May this be your new resolutions for teaching your children good money sense!

MONEY & YOU By CAROL YIP

Carol Yip, founder of Abacus For Money, believes that if people understand their money mindset, behaviours and money psychology, they can be financially happy and successful. She actively promotes financial literacy and intelligence within families and for women, youths and retirees.

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Malaysian banks optimise depposit rates and lending

PETALING JAYA: Competition for fixed deposits (FDs) is set to continue as banks eye new liquidity by offering better interest rates to depositors following the postponement of the Basel III liquidity requirement rules. Industry analysts said banks would also likely optimise their lending ability moving forward.

Ambrose: ‘Malaysia has a well-functioning banking system while Europe does not and the US barely does.’

“It's not good to be too conservative in lending. It is important for the overall economic wellbeing of the country and it gives life to businesses, bringing prosperity to the country,” said a banking analyst from one of the four largest local banks by asset size.

According to Gerald Ambrose, the managing director of fund management company Aberdeen Asset Management Sdn Bhd, the stricter Basel III requirements to ensure banks are well capitalised may not be too suitable for Malaysia which presently has a well-functioning banking system.

“Malaysia has a well-functioning banking system while Europe does not and the US barely does. I think capital requirements that are too strict may potentially stifle economic activities,” Ambrose told StarBiz over the telephone recently.

Commenting on recent banking statistics, RHB Research in a recent note said the November 2012 system statistics showed loans growth had eased to 11.2% year-on-year (y-o-y) from 11.8% y-o-y growth in October 2012.

“The slower pace of growth was attributed to higher repayments during the month, partly mitigated by stronger disbursements. Meanwhile, household loans continued to expand at a steady pace of 11.6% yoy,” RHB Research analyst David Chong said in the report.

Chong noted Nov 2012's total system deposits grew 11.3% yoy with this growth being broad based' with loans to deposit ratio unchanged month-on-month (m-o-m) at 81.6%, the system core capital ratio was at 13.4% and risk-weighted capital ratio stood unchanged m-o-m at 15.3%.

According to Alliance Research banking analyst Cheah King Yoong, these statistics showed the domestic banking system remained “well capitalised” and “resilient to withstand unanticipated shocks to the financial system, if any.”

Cheah added that lending activities did not pick up towards the end of 2012 which could be due to both lenders and borrowers turning cautious with the impending general election which is widely expected to be held in March.

“We reiterate that there could be two potential de-rating catalysts, which pose downside risks to our 7-9% loan growth forecasts for 2013.

“These are (that) lending activities could decelerate in the first quarter of 2013 with slowing corporate loan disbursements and consumers turning cautious pending the upcoming general election,” Cheah said.

“Post-election, should the federal government implement (the) goods and services tax, resume its subsidies rationalisation programme and raise the electricity tariff to close its budget deficit; these fiscal tightening policies could have an adverse impact on consumer spending and consumer loans in the later part of 2013,” he added

By DANIEL KHOO danielkhoo@thestar.com.my

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IBM on solid ground

IBM, the world’s largest technology services company, reported fourth-quarter earnings and revenue that beat estimates on the back of growth in emerging markets.

It gave a better-than-expected 2013 outlook after a solid fourth quarter that analysts say has more to do with Big Blue's smooth execution than a vibrant tech spending environment.

Companies had been widely expected to hold back on IT purchases in December in part because of worries about the so-called US fiscal cliff.

Automatic tax increases and spending cuts would have been triggered had Congress not made a deal to avert the cliff and could have pushed the weak US economy into recession.

But IBM said on Tuesday that its quarterly results beat forecasts and it planned to achieve earnings of at least US$16.70 a share for the full year, above analysts' consensus forecast of US$16.57.
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While some analysts said IBM's earnings might be a sign of an improved tech spending environment, others said the strong results were specific to IBM's business model.

“IBM is better positioned in a tough environment than most tech companies are,” said Cindy Shaw, managing director at Discern.

IBM made a bold strategic move a decade ago when it bought PriceWaterhouse's consulting business and then decided to exit the PC business, betting its future was in finding solutions to business problems with the help of software and technology.

That strategy appears to have paid off.

“What IBM does better than anyone, with the exception of Accenture, is solving problems and I am not talking about taking out some costs, but really driving revenue,” Shaw said.

In addition, she said, IBM was strong in “hot growth markets” such as data analytics, cloud computing, emerging markets and what IBM calls smarter planet, which aims to improve areas such as traffic, power grids and food production.

Sterne Agee analyst Shaw Wu agreed, saying the success appeared to be more specific to IBM than the industry in general.

“The results show that the IBM advantage and business model vertical integration of hardware and software is difficult to replicate,” he said.

“IBM has been doing this the longest and customers are very accustomed to it. They have a much stronger offering and brand name.”

As a result quarterly net income rose 10% to US$6.1bil, or US$5.39 a share from US$4.71 a year earlier. Revenue dropped 1% to US$29.3bil due to the sale of its retail business in the third quarter.

Analysts had expected the Armonk, New York-based company to report net income of US$5.95bil, or US$5.25 a share, on revenue of US$29.05bil, according to Thomson Reuters I/B/E/S.

Revenue grew in particular because of an 11% increase in IBM's growth markets in Brazil, India, Russia and China.

Software revenue was up 3% in the quarter. Reuters

Some analysts said IBM's better than expected results were a sign that tech spending might not have been as bleak as expected.

”It is better than what people had feared,” said Brian Marshall, an analyst at ISI Group.

”Virtually every segment did a little bit better than people expected. It supports the fact that things are getting better out there at least from a tech industry standpoint.”

Andrew Bartels, an analyst with research firm Forrester Research, said: “We were expecting a lot of companies were sitting on their wallets until it became clear what was going to become of the fiscal cliff.

”Given the fact it's Q4 with a cloud of the fiscal cliff, it's a positive indication that tech software will be doing better in the next couple of months.”

IBM shares rose more than 4 percent to $204.50 after closing at $196.08 on the New York Stock Exchange.- Reuters  

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Is there ethics in politics?

DR Mohd Farid Mohd Shahran of Ikim in “When the world of politics is devoid of ethics” (The Star Jan 22 - See the attachment) believes there is still room for ethics in politics.

In the real world, especially in developing countries, the ethics of Plato and al-Farabi are only good for an utopian society.

While man is not born power crazy, those who enter politics are goaded by power to resort to unethical means.

Morality is hard to preserve and practise in politics.

English philosopher Francis Bacon said: “It is hard and severe a thing to be a true politician as to be truly moral.”

Unethical behaviour seems to be the order of the day as the general election looms near.

Almost everyday we read of mudslinging on both sides of the fence. Everything under the sun is being politicised as the stakes are very high.

French philosopher Voltaire remarked: “The pleasure of governing must certainly be exquisite if we may judge from the vast numbers who are eager to be concerned with it.”

Had Voltaire been alive today, he would qualify his statement by saying, “It is not so much the pleasure of governing, but the power that comes with it, making the vast numbers who are eager to be concerned with it.”

As Dr Farid said: “Politics, in its true meaning, is praiseworthy”. But the “realpolitik” meaning is different. Mao Zedong once said: “Power comes from the barrel of the gun”.

Jonathan Swift said: “Politics as the word is understood, is nothing but corruption.”

Despite the negative connotation of politics in its general form, politics as a profession can have high ethical values if the very system in which politics arise have strong values as seen in most developed countries.

Singapore is a shining example where the ruling party has great difficulty finding candidates to stand for elections as the people do not see it as a way to become rich overnight.

Singaporean politicians are known to observe and practice the highest ethical principles as espoused by Plato.

The observance of ethical political principles in Malaysia still has a long way to go as noted by Dr Farid where “small issues can potentially be magnified into a big scandal.”

“The various issues raised by political parties range from major ones such as fair economic distribution and political justice, to the most trivial or personal matters such as the way leaders and their family members dress”.

So far, general elections in Malaysia, unlike in some developing countries, have not resulted in the use of heavy weapons to gun down people.

And when the election results are announced, people accept it in good faith and continue with their daily chores while waiting for the next general election. Meanwhile, they hope the party that won will honour its manifesto.

One of America’s founding father’s Thomas Jefferson said: “I have no ambition to govern men. It is a painful and thankless office.” Thomas Jefferson was a man of high ethical values.

Do we have men like Jefferson in Malaysian politics?

Certainly there are many men and they should be given the task of providing true leadership along the political principles of Plato and al-Farabi.

By HASSAN TALIB

When the world of politics is devoid of ethics

 

Much too often, personalities are the biggest casualties as they are ruthlessly tarnished. All the dirt and grime is dug out and paraded for the nation to see despite their many prior good contributions.

WITH the general election around the corner, the heat of the Malaysian political climate is gradually increasing.

The number of political gatherings, ceramah and demonstrations by political parties multiply by the day and continue to increase.

The various issues raised by political parties range from major ones such as fair economic distribution and political justice, to the most trivial or personal matters such as the way leaders and their family members dress.

It looks as if Malaysians have become a very conscious lot concerned over everything overnight. Small issues can potentially be magnified into a big scandal.

Not only is the intensity palpable within ceramah and gatherings, a similar tone is also evident in cyberspace where heated debates and exchange of views have overwhelmed the social media such as blogs, Facebook and Twitter.

While such a phenomenon is regarded as normal, the negative culture attached to it is best eschewed.

To render support for one’s own party, some leaders and fanatical followers would resort to unethical means such as making false claims and unfounded allegations that include character assassination.

In response to such accusations, the opposing parties will stage similar counter attacks. As a result, emotions simply overrule reason causing the situation to get out of hand.

Understandably, the principle that guides extreme political groups is that politics is a war in which all kinds of weapons must be deployed to exterminate the enemies.

In engaging power politics, the prince, says Machiavelli, must be “adaptable and know how to do wrong when he must”.

Naturally, such an approach will have a more divisive impact on society.

People become more divided and emotions override everything else, particularly level-headedness.

Much too often, personalities are the biggest casualties as they are ruthlessly tarnished. All the dirt and grime is dug out and paraded for the nation to see despite their many prior good contributions.

Thus, questions remain: Is this the way politics serve its purpose in administering human life? Must society undergo this unhealthy process to elect a leader? Must we necessarily be divisive before arriving at political maturity when the amount of damage done is irreparable?

The answer lies in how the meaning of politics should be properly understood.

More importantly is the understanding of the role of ethics in political activities.

Politics, in its true meaning, is praiseworthy.

Philosophers and political thinkers as early as Plato, through his idea of the “Philosopher King”, had proposed a political system where wisdom and virtues must be the bases of governing states.

Although his idea is also criticised as utopian, the principle that Plato tried to put forward is very important, that is, a true political system must be guided by knowledge and virtue reflected primarily in the character of the leaders and politicians.

In other words, ethics, according to Plato, must be the basis of politics.

Just as men must live virtuous and good lives, a state must also be built on strong ethical ground. If the state is unfavourable, says Plato, the individual citizens would find themselves unable to lead a good life as it should be lived.

This organic relationship between ethics and politics from Plato stemmed from his idea that a state must be a microcosmic reflection of man. Since a state is run by humans who need to be furnished with good ethical virtues for him to be good, a good state must also be refined with virtuous characteristics.

Echoing Plato is al-Farabi, a celebrated thinker from the Muslim tradition whose work, The Opinions of Inhabitants of the Virtuous City, underlines that a state should be properly ruled by virtuous leaders and followed by virtuous people.

“The excellent city resembles the perfect and healthy body where all of whose limbs co-operate to make the life of the animal perfect and to preserve it in this state.”

Among the qualities needed by a ruler, according to al-Farabi, are intelligence, good memory, keenness of mind, love of knowledge, moderation in matters of food, drink and sex, love of truthfulness, magnanimity, frugality, love of justice, firmness and courage.

Arguably for some, real politics can never take ethics as its principle.

Such a view is justified if only man is naturally born with the attribute of being power crazed.

However, this has not been so since man was created by God in the best of mould as affirmed in the Quran: “Verily we have created the human being in the best of form.”

Furthermore, mankind can take pride in some of its leaders and rulers with good qualities and virtuous characteristics decorating its history. In Islam, for example, Prophet Muhammad and the four-guided caliphs continue to be revered as leaders par excellence for all Muslims. Another outstanding and exemplary leader at a later period was Umar Abd Aziz whose short rule, nevertheless, left a tremendous impact.

So rigid was Umar’s standard of ethics that he was said to have even refused to use up the candle in his office to light the room when discussing personal matters.

In sum, while we all can agree and understand Einstein when he said, “Politics is more difficult than physics”, we hope that, just as physics has contributed immensely to benefit the life of the human kind, politics would be able to do likewise.

BY DR MOHD FARID MOHD SHAHRAN, SENIOR FELLOW CENTRE OF ECONOMICS AND SOCIAL SCIENCE 
IKIM VIEWS - The Star Jan 22, 2012

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Chance to invest in distressed assets

Distressed property markets where deals are difficult to finance and yield spreads are at all-time highs provide attractive investment opportunities, according to Morgan Stanley’s real estate unit.

In the Asia-Pacific region, Morgan Stanley Real Estate Investing is most focused on China, India, Australia and Japan, said Olivier de Poulpiquet, who helps oversee $36 billion in real estate assets as the global co-head for the unit.

In India and China, demand is driven by strong demographic trends amid a dearth of financing, while in Australia and Japan, low borrowing costs are providing opportunities, he said.

Morgan Stanley, with a team of 280 globally in 11 countries dedicated to the property business, has about 45 percent of its investments in the U.S., 33 percent in Asia and about 22 percent in Europe.

In many developed markets, such as U.S., Japan and Australia, the yield spread between real estate and the risk free rate, typically the interest rate on U.S. Treasury bills, is as much as 400 basis points, de Poulpiquet said.

“Asia and the U.S. will continue to offer opportunities,” de Poulpiquet said in an interview in Singapore yesterday. “Investments in real estate have seen a flight to safety globally and in particular in the U.S. and Europe.”

Interest in property investments by institutional investors is improving as the asset class is viewed as an effective portfolio diversifier and an inflation hedge, de Poulpiquet said. Allocations to real estate by major institutions may climb from an average of 7 percent currently to 10 percent, he said, without providing a time frame for the increase.

India, China

In India and China, Morgan Stanley is finding opportunities by financing developers that are seeking money to complete projects amid a scarcity of capital, de Poulpiquet said.

In its almost three-year effort to tighten the property market, the Chinese government has raised down-payment and mortgage requirements, imposed a property tax for the first time in Shanghai and Chongqing, and enacted home-purchase restrictions in about 40 cities. India’s biggest developers have struggled to rein in record debt as they grapple with high borrowing costs, dwindling sales and banks’ reluctance to lend.

“The major trend in these markets is that this growth is combined with a capital constrained environment for real estate, mostly driven by government interventions and price cooling measures,” de Poulpiquet said.

“In India and China, there is less opportunity to buy existing assets but greater opportunity to pick the right developer and build to either lease or sell.”

Favorable Demographics

India will have 127 million more working age adults by 2020, while in China, the 470 million adults leaving rural areas for cities will reach a rate of 11 million per year, said de Poulpiquet.

Over the next 15 years, the total global urban space growth will reach about 82,000 square kilometers (31,660 square miles), 47 percent of which will be driven by India and China, he said.

In markets such as Shanghai, the supply of class A office spaces is relatively low while demand is forecasted to remain robust, de Poulpiquet said. In India, the trend is similar where the residential sector continues to offer interesting opportunities, he said.

In Australia, distressed assets sold by European banks which are undergoing deleveraging processes to clean up their balance sheets are attractive, said de Poulpiquet.

In Japan, Morgan Stanley is buying class B office assets in Tokyo and greater Tokyo, he said.

“In many markets globally, including Japan and Australia you can buy class B plus assets, at significant yield differential between your cost of borrowing and the real estate yield,” said de Poulpiquet. “It is a relatively safer investment with good quality yield and return profile.”

Europe will also increasingly offer attractive investments in real estate with all the level of distress in the market, he said. Still, Morgan Stanley remains “cautious” and focused on making “defensive investments” in the region as prices still have some room to fall, he said.

“Overall, we will see slower growth, more volatility but in Europe, it’s neither a doomsday scenario nor in a happy recovery and this will last for a while,” he said.- Bloomberg

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Japan's strategic offensive, from Diaoyu Islands to Nay Pyi Taw

Illustration: Liu Rui

Shinzo Abe's election has pushed the Diaoyu Islands crisis into the edge of all-out confrontation between China and Japan.

 While Japan's high-profile move on the Diaoyu Islands is a direct confrontation against its neighbor, its actions in Myanmar are a secret detour against China.

As the Diaoyu Islands dispute gripped the attention of China and the whole world, Japan's newly appointed Finance Minister Taro Aso visited Myanmar to write off its debt of 500 billion yen ($5.58 billion), followed by major financial groups covertly pushing into Myanmar's economic field.

In fields where China is also involved, Japanese financial groups, with their advanced technology, strong capital and national support, are in a race with Chinese enterprises.

They do not aim for profits at the moment, and some would rather suffer a loss.

This is not a healthy competition, but a vicious economic war which aims to drive out Chinese companies, control Myanmar's economy, and finally, cut off China's energy passageway to the Indian Ocean.

Soon after the US focused on hedging against China in Myanmar, Japan immediately started annihilating Chinese enterprises under the umbrella of the US' strategy.

China has three grand strategic projects in Myanmar - the Myitsone hydropower project, which has been forced into a total shutdown, the Monywa-Latpadantaung copper mine, where several public protests have taken place, and finally, the construction of an oil and gas pipeline between China and Myanmar, where recent signs have become increasingly disturbing.

Myanmar joins sea and land in the US' C-shaped encirclement of China, which includes the Pacific Ocean, the Indian Ocean, East Asia and South Asia.

After the US decided on an eastward strategic shift centered on encircling China, an East Asian alliance, with Japan, the Philippines and Vietnam as the axis, promptly came into being and endangered vast areas in the East China Sea and the South China Sea.

It is a fatal threat to China, which relies heavily on the sea for its trade and energy. Under such circumstances, Myanmar's vital strategic position is evident, which is why the US and Japan have concentrated on the country.

Due to the strong US-Japan alliance, it is very difficult for China to achieve a decisive breakthrough in the East China Sea and the South China Sea issues, while a westward focus may be the best solution.

However, Myanmar, one of the four westward passages, was seized initially by the US and Japan, which have launched a strategic offensive in what seems like a showdown posture.

Through the powerful intervention of the US and Japan, great changes have taken place in Myanmar's political situation, and Myanmese military forces' large-scale attack on the Kachin Independence Army is only one event that shows this. 

Thus, Myanmar has become the arena where China, the US and Japan play out a strategic game. We hope China can develop a proper strategy to deal with the situation in the new century.

After the US' public announcement of its eastward strategic shift, some Chinese have given up their fantasies about the US.

 A number of Chinese have another fantasy of China uniting with Japan to isolate the US, as Japan's national strategy aims to keep abreast with China and the US in its politics.

But the US' usefulness is much greater than China's, and will be for quite some time. Japan will align with the US strategic direction in this period, rather than move closer to China.

I suggest strategy planning departments deploy unified strategic actions with regards to Myanmar and the Diaoyu Islands from the perspective of the overall Sino-Japanese duel.

On the issue of Myanmar, China should support the normal economic activities of Chinese enterprises with State power, as Japan has done. As for the Diaoyu Islands, China must leave Japan in a defensive position by regaining the initiative instantly.

By Dai Xu
The author is director of China Institute for Marine Security and Cooperation Studies. opinion@globaltimes.com.cn

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Right person for the right job, how and what to do?

MEASURE twice, cut once is a term often used by carpenters and tailors when measuring material for a specific purpose. The point is to be very careful and judicious when measuring to avoid nasty outcomes once the wood or material has been cut.

However, this phrase is just as appropriate for the hiring process as well. Once an employee is hired, the company has to ensure that the individual assimilates well into the organisation and achieves the desired level of performance; otherwise the remedial action that needs to be taken can be very tedious and even unpleasant.

One of the many pitfalls of this situation is that employers, under the pressure of filling a vacancy, could end up hiring individuals who may not be the best fit, and as a result, could be setting a whole series of messy events into motion.

Not too long ago, one of my clients approached us to take on a sales director search. The client shared that he had been a bit too hasty in hiring the last sales director, and had failed to dive deep into the strategic value and scope of the role before making the hiring decision.

In our post mortem discussion with the client, it was clear that he had hired an individual who might have been suitable for a sales manager's position; one level below the sales director's position, but had given him the sales director role because of urgency and the lack of suitable candidates at that time.

The unfortunate result of that scenario was that the newly-hired sales director resigned after only three weeks on the job under the pressure and scope of the work, leaving a path of chaos amongst all the company's clients and suppliers. As such, half-way into its financial year, the company was forced to start looking for another candidate for the sales director role.

In this instance, the company may have benefitted from measuring twice and cutting only once, rather than having to repeat the process of hiring for the same position after such a short period of time.

Other than experience, another critical-but-often-overlooked consideration in the recruitment process is the salary range or the package offered for the role. Salaries and wages are always moving in tandem with the demand of a particular skill-set or type of profile. The more in demand a particular type of skill is, the higher the cost of acquiring that skill.

Some organisations are willing to pay above market rates for certain key positions, as the alternative of not having someone in the role may actually cost the organisation more, from a commercial standpoint. On the other hand, there are some companies which would rather keep within a certain salary band rather than pay the market rate to an individual with the right amount of experience for the job.

From my experience, it is essential to have not only a good understanding of the market salaries but also what the candidate's realistic expectation is.

If we pay too high above the market rate, this often sets a very high expectation for this person to perform. And in some instances, if the individual is unable to deliver the expected results, the risk of paying an inflated price to acquire this individual might not have paid off; and if the company had hired someone less qualified because that was all its budget could afford, then the less-experienced individual may also not be able to deliver on the expectation, as he or she may not have the knowledge, capability or necessary life-experience to do so.

Finding a solution

How can we put the measure twice cut once concept into practice?

One innovative human resource director shared with me recently that he had been trying unsuccessfully to fill a role in his department for quite some time. During this period, he was introduced to an individual who was not an ideal fit to the role in terms of experience but one who was teachable and would be able to work well with the rest of the team.

So, he crafted a role around the individual's profile and experience and got the revised role approved by the top management. This worked out well for both the company and the individual, as the expectations set were achievable and realistic. The human resource director, in this case, had to measure twice but only had to cut once as he managed to find a solution to his problem. The solution turned out to be a good one, as the individual successfully completed her probation period and met her key performance indicators.

Another client who was looking for a managing director for his company was also forced to take a less conventional route to filling his needs. The client shared with me that he had already interviewed more than 20 candidates for this role before approaching us to assist with this search. The only candidate who was given an offer turned down the job when he was counter-offered by his current employer.

As such, the client already knew the market and we were hard-pressed to come up with a new slate of candidates for the search. The client liked one of our candidates but felt he wasn't ready to take on the role of managing director yet. However, instead of disregarding a good talent, the client decided to hire the individual as an operations director.

As such, the individual was able to grow into the managing director's role and the company would also have the benefit of securing a good talent who could potentially achieve more for the company in the future.

In this example, our client knew exactly what he needed for the role and exercised some flexibility to acquire good talent rather than missing out on a high-potential candidate. In addition, he did not compromise on his requirements but was able to see beyond the immediate need to find a managing director.

Different approach

When to measure and when to cut? An important aspect of measure twice cut once, is that the person doing the measuring needs to take the time to get it right and not be in too much of a hurry to get to the cutting stage. A carpenter or tailor is a craftsman who takes pride in his work. Therefore, when we hire, it is essential to look carefully at all aspects of the role which needs to be filled and take the time to understand how a potential candidate will fit that role.

The technical expertise or hard skills are only one part of the whole equation. We should take the time to understand the personality profile of the individual, his or her motivations and long-term goals.

Most hiring managers often forget to look at options in the recruitment process. There is a finite pool of talent and the best talents would also have been earmarked by your competitors as well.

So, instead of doing the same thing and expecting a different outcome, perhaps it's worth the effort to try a different approach. Tailor the job to fit a good talent, or give the person another role to allow time for the individual to grow into the intended position. Although we may not always have the option of changing the status quo in this way, the purpose of this article is to offer another alternative solution to the talent shortage problem, and hopefully, bring about a better outcome.

Talking HR with Pauline Ng

Pauline Ng, consulting director and head of BTI Consultants, encourages every hiring manager to explore all options and leave no stone unturned when making the decision to hire by utilising assessment tools and having a comprehensive map of the talent market.

The cause of unethical activities

HUMAN beings are born the same way, yet we live and die differently.

From the cradle, we pick up habits from our parents. On growing up, we learn from our teachers and society.

Some of us attend moral classes, celebrate various days and practise rituals regularly. Yet we may still be unethical.

The four main goals that everyone competes for in life are money, energy, time and food.

Deprivation of any of these may lead to unethical behaviour.

People accumulate wealth more than they need. As the ‘haves’ constantly multiply their wants, the ‘have-nots’ are deprived from having sufficient food, clothing, shelter, energy and time.

These in turn create social problems such as conflicts (i.e. civil wars, nations against nations, terrorism, religious conflicts and personal conflicts), environmental crisis (i.e. global warming, water pollution, air pollution, food inadequacy, waste production and earthquakes/tornadoes) and social crisis (i.e. rampant corruption, AIDS/HIV, divorce rate/single parents, child abuse/violence, suicide, living together and teenage pregnancy).

Human beings become unethical due to six enemies (i.e. lust, anger, greed, fear, jealousy and hatred) embedded in our subconscious mind.

When the negative energy is activated, it emotionally influences one to be unethical.

In other word, human beings become unethical due to the influence of the negative energy unknowingly.

Although every human being has the six enemies rooted in them, the dominant energy prevails.

Some might be controlled or driven by anger, while others by jealousy.

This dominant force will influence our perception which we form from the five perceptions hearing, sensing, sight, taste and smell.

Negative perception will lead us to be unethical.

The fundamental causes originate from childhood conditioning, life experiences and the current living environment.

Childhood conditions play a vital role in the formation of a person.

Human beings are formed by the age of five years and the experience is strongly rooted in the subconscious mind.

The positive energy embedded will help them to be good citizens.

However, the negative energy (i.e. childhood wounds) will lead them to being challenging human beings due to low self-esteem caused by the feeling of being powerless, abandonment and worthlessness.

Life experiences may induce negative energy into us. Based on Abraham Maslow’s hierarchy of needs, the third need being the social need plays a vital part.

If a person is always being eliminated in the development of society and country, he/she will end up being frustrated or angry, and in turn will take revenge without realising.

This is one of the reasons for the origin of criminals, gangsters and terrorists.

The current living environment, sometimes known as peer pressure, also is vital in inducing the negative energy.

In the process of meeting the needs of others or competing for equal status, human beings carry out unethical activities such as breach of trust, corruption, bribery and even discrimination.

In a nutshell, no human being would like to harm a fellow human being.

The six enemies embedded in our subconscious mind may lead to the unethical activities.

Unethical activities will not be eradicated until we understand the actual meaning, fundamental cause and origin of the fundamental cause of being unethical.

Unethical activities can be eradicated when the vision/mission of an individual’s life is noble and the nation’s administration has good governance, transparency, control and measures.

Everyone, especially the “haves” accept that the inherent quality of human being is to have self-integrity which leads to having full control over their life and work towards the betterment of human beings.

Unethical behaviour can only be eradicated when “every pulse of us is filled with love towards fellow human beings”.

By DR RAJENDRAN MUTHUVELOO
Universiti Sains Malaysia, Penang

Penang residential prices to rise 8%

RESIDENTIAL property prices in Penang are likely to rise by 7% to 8% by the first half of 2013 due to the steady demand and a stronger gross domestic product (GDP) projection for 2013.

< Geh says new properties launched with a bundled-up financial package would be most popular.

According to the latest Finance Ministry report, the GDP forecast for 2013 is between 4.5% and 5.5%, riding on the growth in the agriculture, construction, mining, manufacturing, and services sectors.

Raine & Horne Malaysia director Michael Geh says new properties launched with a bundled-up financial package would be most popular.

“This is why this segment will perform better than those properties in the sub-sales market, where the buyer and seller have to do more paper work,” he says.

Saw says harder loans may be cause of lower volume.>

Currently, the price for terraced property in prime locations such as Tanjung Bungah and Tanjung Tokong is around RM1.2mil to RM1.5mil.

The selling price of development land in prime locations ranges between RM450 and RM1,000 per sq ft.

“The stringent guidelines for housing loan, now based on the evaluation of net income rather than on gross income and the difficulty in obtaining the desired valuation report will mean that the sales of condominiums in the secondary market will face more challenges,” he says.

The new guidelines from the Penang government for foreign purchasers to buy only high-rise and landed properties priced from RM1mil and RM2mil respectively will impact adversely on foreign property transactions in Penang, according to Geh.

“More foreigners will prefer to rent than to buy, thus one can expect rental yield in the state to increase gradually,” he adds.

According to the latest National Property Information Centre's (Napic) property market report, total transactions for residential properties in Penang hit around 18,316 for the first nine months of 2012, with a transacted value of RM5.2bil.

The whole of 2011 saw the state registering some 30,674 residential property transactions valued at RM7.7bil.

Geh says the total volume of property transacted for 2012 was unlikely to catch up with 2011's.

“That the total value of property transactions has risen although the volume transacted has decreased is not surprising, as this is normally the trend,” he adds.

PPC International Sdn Bhd director Mark Saw says the lower volume of transactions may be because housing loans are harder to obtain nowadays.

“Another reason could be that the preferred choice of properties might not be available,” he says.

Malaysian Institute of Estate Agents deputy president Siva Shanker says Malaysia is unique as property prices have not dropped following the decline in transactions.

“In fact property prices will hold and then shoot up when times are good again,” he says.

Penang Master Builders & Building Materials Dealers Association president Lim Kai Seng says construction cost will likely be maintained in the first quarter of 2013.

“Although sand prices have gone up, the smaller volume of construction jobs available is offseting the impact of rising sand prices.

”Due to the competition for jobs, construction cost will be maintained,” he says.

The price of sand per load of 30 tonnes is around RM1,200, compared to about RM800 in early 2012.

Since the price of cement went up in August, the cost of construction has increased by about 3%, Lim says.

Who invented bank deposit insurance?

I LOVE the Internet. The best Christmas present I got last year was a preview of a forthcoming book by a banker/historian in Boston. He sent me electronically his PhD thesis, a piece of masterly detective work on how ideas travel over time and space, become adopted successfully in a different place, and then comes back to where they started.

Dr Frederic Grant Jr's forthcoming book uncovered how the US bank deposit insurance system has its root in ideas borrowed from Canton (Guangdong province in southern China) of the 19th century. The origins of the US deposit insurance scheme arose from the 1828 The Safety Fund statute of the State of New York, drafted by a legislator named Joshua Forman.

In those days, if the state-authorised banks failed, the state would have to pay for their failure. Forman borrowed the idea from Canton that those authorised for privileged trade (in banks the privilege of private currency issue) should be responsible for their own debts.

The success of the New York Safety Fund inspired the adoption of similar schemes by 13 other American states. In 1933, the Banking Act of 1933 created the Federal Deposit Insurance Corp (FDIC), following the failure of many banks across the US. This idea of a national deposit insurance scheme has been adopted by many countries around the world, and is currently being considered in China.

How did Forman get the idea about the Canton Guaranty Scheme? Apparently, New York was already the major port for US-China trade and the scheme was familiar to New York businessmen.

How the Canton system evolved

It all came about because the Qing dynasty official merchants, namely merchant houses (or hongs) authorised by Beijing to conduct foreign trade, often require trade credit to conduct business with foreigners in Canton. If these traders defaulted on their loans, the foreigners threatened to take action on the weak Qing dynasty. Hence, in order to prevent individual merchant failure, the Qing government used a collective responsibility method evolved by the Manchu court in Beijing that ensured that those authorised to benefit from the foreign trade also collectively guaranteed each other's trade debt, and a premium was paid yearly into a fund to pay off any individual failure.

The Qing government solved the problem of defaults by imposing collective responsibility everyone was responsible for the group's debt. The good news is that the group as a whole made sure that no member got into trouble, engaging in what is today called “peer surveillance”. The bad news is that with collective guarantee, the smaller traders have an incentive to take higher risks, creating moral hazard private gain at collective loss. Moreover, as history showed, if trade was really bad, more traders failed and since the Qing government also borrowed or taxed the accumulated fund regularly, there were not enough money in the fund to settle all debts. Eventually the Canton Guaranty Fund also failed.

Corruption and misappropriation of fund was to blame, but the main culprit remained what Grant called “the perennial dilemma of inadequate capital and lack of access to affordable credit” for smaller hongs.

These problems plagued all deposit insurance schemes, even today. Large banks loath to support deposit insurance because they pay a larger share of the premium than smaller banks. Small banks enjoy the group insurance, but are more prone to failure because they were more likely to take more risks, which meant that there should be supervision to make sure that these riskier players do not destroy the group as a whole.

Deposit insurance worked very well in the United States, as the FDIC not only participated in supervision of the insured banks, but also engaged actively as the mortuary of failed banks. In the recent crisis, from 2009 to currently, the FDIC smoothly managed the exit of over 400 banks in the United States, without disruption to the system as a whole. But this time round, it was the failure of the shadow banks and larger banks that created the problem. Yes, smaller banks failed, but they did not take down the whole system because deposit insurance prevented large-scale bank runs at the retail level.

The time has come for China to adopt a formal deposit insurance scheme. There are at least three good reasons why it should occur. The first is that deposit insurance will help stop retail bank panic, exactly the reason for the Canton Guaranty Fund. The second is that there must be an orderly exit mechanism for financial institution failure. Some argue that a deposit insurance would duplicate supervision. Today we realise why we have two kidneys instead of one we need redundancy in the system, in case one fails.

The third, based on my personal experience, is that regulators who are good at daily operations may not always be very good at conducting the messy operations of restructuring failed banks. This is a very complicated process that needs strong skills, good bankruptcy laws and more investment banking skills than regulation. Deposit insurance is specialised work and needs specialised skills.

As Grant rightly said, the historical record of the Canton Guaranty System offers a number of valuable lessons to the modern world. “These include (1) that the tax that supports a guaranty fund must be based on measured risk of loss; (2) that the fund and its insureds must be made subject to strong independent supervision; (3) that laws enacted to avoid risk contingencies must be enforced; and (4) that both corruption and the diversion of fund assets must be strictly prohibited.”

The trouble with history is that we never seem to learn from history.

THINK ASIAN
BY ANDREW SHENG

 > Tan Sri Andrew Sheng is president of the Fung Global Institute. 

Related: 
FDIC: Failed Bank List
Innovation not the same as invention, the difference here...
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Innovation not the same as invention, the difference here...

Innovation practitioners know that they should not listen to the experts who approach life with rigid blinkers that prevent them from visualising anything outside their conditioned minds.

TAKING a leaf out of what our Prime Minister wrote in this space two weeks ago, innovative thinking is undoubtedly a significant driver in propelling the nation’s economy to new heights. It is imperative that Malaysians embrace a culture of innovation.

But let’s take a step or two back, before we can begin to move forward. It is important to pin down exactly what innovation means. Several readers have asked me if innovation is the same as invention, especially after reading about Malaysian researchers winning awards for their inventions. In fact, although they may appear similar at first glance, upon closer inspection both are very different indeed.

If you make something unique or original, that’s an invention. Whether the invention has value or not is immaterial. This is why we see whacky inventions like toothbrushes for dogs or a clip-on fan on chopsticks to cool down noodles. Both these examples are unique and original but offer little value to most citizens.

Innovation demands creating additional value, even though a product or service may not be unique or original. The innovator must first unravel customer needs, and then figure out how to inject greater value at different parts of the solution. Let’s look at two examples.

Forty-five years ago, the radical economist and philosopher E.F. Schumacher formed an NGO called Practical Action to help people in developing countries help themselves. Practical Action states that more than 1.6 million people in developing countries die of diseases and accidents caused by cooking and heating fires in homes. This is not surprising, given that one third of humanity still uses rudimentary stoves fuelled by wood, charcoal or dung.

Liquefied petroleum gas (LPG) is a viable solution as it costs less than wood or charcoal, but most villagers cannot afford the stoves. Some African countries have implemented an innovative “revolving fund” credit system that allows villagers to buy stoves. It works exactly like the “kutu” scheme prevalent in Malaysia for decades, although illegally. Ten households get together and form a fund, with each household contributing a fixed amount to the fund each month, for 10 months.

Every month, one household collects the contributions that month to buy a stove. The following month, another household gets the total contributions to buy their stove. Households draw lots to see who will get the fund over the next 10 months. Within 10 months, all 10 households get their LPG stove. Now imagine adapting this idea to meet the needs of entire communities and you see the power of this innovative funding system. No handouts or subsidies from the government and no bank loans either – the villagers help themselves, through innovation. This is a common sense solution, not rocket science. To be precise, this is innovation.

Let’s look at the second example. Does the number of new books that hit the bookshelves every month overwhelm you? It was predicted that the Internet would spell the death of the printed word, but in fact the reverse has happened. There are now more books in print than at any other time in history. How does one keep up?

As it is commonly known, a number of innovative online companies have found a practical solution to this. For a small fee, these companies provide a short summary of a book containing all the essential ideas presented in the book. Most people can read these summaries in 15 minutes, making it possible to read at least one book each day. This “compressed knowledge” is another example of innovation.

Ultimately, innovation is not confined to technologies, products or services. You can have innovation at every stage of the business cycle – from manufacturing to distribution to sales to post-sales support.

Just look at Nike, the world’s largest supplier of athletic shoes and apparel. It does not own a single manufacturing factory, but focuses on innovation in design and marketing. Another well-known example is DHL, a world-leading courier and logistics company that relies on innovation to accurately ship a document or parcel from the point of origin to its destination.

For you to benefit and profit from innovation, you have to dissect your business or activity into its key pieces or “parts”. The “eco-system” must be correctly identified, as dealing with just one part of the problem or value-chain is unlikely to bring satisfactory results. Nothing exists in isolation and even seemingly unconnected things are actually connected, so a “village” or holistic approach to innovation is necessary.

For each piece or part, you have to ask a fundamental question: How can I do this better, so that the outcome is greater than it is now – at a lower cost? Your brain will rebel at first and tell you that it cannot be done. Don’t listen to your brain; it is a lazy device looking for the easiest way out. Innovation practitioners know that the last person you should listen to is your own self. Don’t listen to the experts either, for they approach life with rigid blinkers that prevent them from visualising anything outside their conditioned minds.

Adopt a child-like disposition and question the assumptions that you and others have taken for granted. Persist until you have questioned each and every aspect of all the pieces of the puzzle and found answers that are uncommon.

This sounds easy, but it is the most difficult step as it questions all the sacred cows lurking in your belief system. Done correctly, however, it can lead to breakthrough innovations.
If you have been through this process, share your stories with me at kamal@pmo.gov.my so that other readers can benefit from your lessons too.

The Star Ignite
By DATUK SERI DR KAMAL JIT SINGH

> Unit Inovasi Khas CEO Datuk Seri Dr Kamal Jit Singh is hoping to jolt Malaysians out of complacency.

 

The Difference Between 'Invention' and 'Innovation'

Two and a half years ago, I co-founded Stroome, a collaborative online video editing and publishing platform and 2010 Knight News Challenge winner.

From its inception, the site received a tremendous amount of attention. The New School, USC Annenberg, the Online News Association and, ultimately, the Knight Foundation all saw something interesting in what we were doing. We won awards; we were invited to present at conferences; we were written about in the trades and featured in over 150 blogs. Yet despite all the accolades, not once did the word "invention" creep in. "Innovation," it turns out, was the word on everyone's lips.

Like so many up-and-coming entrepreneurs, I was under the impression that invention and innovation were one and the same. They aren't. And, as I have discovered, the distinction is an important one.

Recently, I was asked by Jason Nazar, founder of Docstoc and a big supporter of the L.A. entrepreneurial community, if I would help define the difference between the two. A short, 3-minute video response can be found at the bottom of this post, but I thought I'd share some key takeaways with you here:

INVENTION VS. INNOVATION: THE DIFFERENCE

In its purest sense, "invention" can be defined as the creation of a product or introduction of a process for the first time. "Innovation," on the other hand, occurs if someone improves on or makes a significant contribution to an existing product, process or service.

Consider the microprocessor. Someone invented the microprocessor. But by itself, the microprocessor was nothing more than another piece on the circuit board. It's what was done with that piece -- the hundreds of thousands of products, processes and services that evolved from the invention of the microprocessor -- that required innovation.

STEVE JOBS: THE POSTER BOY OF INNOVATION

If ever there were a poster child for innovation it would be former Apple CEO Steve Jobs. And when people talk about innovation, Jobs' iPod is cited as an example of innovation at its best.

But let's take a step back for a minute. The iPod wasn't the first portable music device (Sony popularized the "music anywhere, anytime" concept 22 years earlier with the Walkman); the iPod wasn't the first device that put hundreds of songs in your pocket (dozens of manufacturers had MP3 devices on the market when the iPod was released in 2001); and Apple was actually late to the party when it came to providing an online music-sharing platform. (Napster, Grokster and Kazaa all preceded iTunes.)

So, given those sobering facts, is the iPod's distinction as a defining example of innovation warranted? Absolutely.

What made the iPod and the music ecosystem it engendered innovative wasn't that it was the first portable music device. It wasn't that it was the first MP3 player. And it wasn't that it was the first company to make thousands of songs immediately available to millions of users. What made Apple innovative was that it combined all of these elements -- design, ergonomics and ease of use -- in a single device, and then tied it directly into a platform that effortlessly kept that device updated with music.

Apple invented nothing. Its innovation was creating an easy-to-use ecosystem that unified music discovery, delivery and device. And, in the process, they revolutionized the music industry.

IBM: INNOVATION'S UGLY STEPCHILD

 Admittedly, when it comes to corporate culture, Apple and IBM are worlds apart. But Apple and IBM aren't really as different as innovation's poster boy would have had us believe.

Truth is if it hadn't been for one of IBM's greatest innovations -- the personal computer -- there would have been no Apple. Jobs owes a lot to the introduction of the PC. And IBM was the company behind it.

Ironically, the IBM PC didn't contain any new inventions per se (see iPod example above). Under pressure to complete the project in less than 18 months, the team actually was under explicit instructions not to invent anything new. The goal of the first PC, code-named "Project Chess," was to take off-the-shelf components and bring them together in a way that was user friendly, inexpensive, and powerful.

And while the world's first PC was an innovative product in the aggregate, the device they created -- a portable device that put powerful computing in the hands of the people -- was no less impactful than Henry Ford's Model T, which reinvented the automobile industry by putting affordable transportation in the hands of the masses.

INNOVATION ALONE IS NOT ENOUGH

Given the choice to invent or innovate, most entrepreneurs would take the latter. Let's face it, innovation is just sexier. Perhaps there are a few engineers at M.I.T. who can name the members of "Project Chess." Virtually everyone on the planet knows who Steve Jobs is.

But innovation alone isn't enough. Too often, companies focus on a technology instead of the customer's problem. But in order to truly turn a great idea into a world-changing innovation, other factors must be taken into account.

According to Venkatakrishnan Balasubramanian, a research analyst with Infosys Labs, the key to ensuring that innovation is successful is aligning your idea with the strategic objectives and business models of your organization.

In a recent article that appeared in Innovation Management, he offered five considerations:

1. Competitive advantage: Your innovation should provide a unique competitive position for the enterprise in the marketplace;
2. Business alignment: The differentiating factors of your innovation should be conceptualized around the key strategic focus of the enterprise and its goals;
3. Customers: Knowing the customers who will benefit from your innovation is paramount;
4. Execution: Identifying resources, processes, risks, partners and suppliers and the ecosystem in the market for succeeding in the innovation is equally important;
5. Business value: Assessing the value (monetary, market size, etc.) of the innovation and how the idea will bring that value into the organization is a critical underlying factor in selecting which idea to pursue.

Said another way, smart innovators frame their ideas to stress the ways in which a new concept is compatible with the existing market landscape, and their company's place in that marketplace.

This adherence to the "status quo" may sound completely antithetical to the concept of innovation. But an idea that requires too much change in an organization, or too much disruption to the marketplace, may never see the light of day.

A FINAL THOUGHT

While they tend to be lumped together, "invention" and "innovation" are not the same thing. There are distinctions between them, and those distinctions are important.

So how do you know if you are inventing or innovating? Consider this analogy:

If invention is a pebble tossed in the pond, innovation is the rippling effect that pebble causes. Someone has to toss the pebble. That's the inventor. Someone has to recognize the ripple will eventually become a wave. That's the entrepreneur.

Entrepreneurs don't stop at the water's edge. They watch the ripples and spot the next big wave before it happens. And it's the act of anticipating and riding that "next big wave" that drives the innovative nature in every entrepreneur.

By Tom Grasty This article is the seventh of 10 video segments in which digital entrepreneur Tom Grasty talks about his experience building an Internet startup, and is part of a larger initiative sponsored by docstoc.videos, which features advice from small business owners who offer their views on how to launch a new business or grow your existing one altogether.

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Japan’s hopes to contain China laughable

Japanese Prime Minister Shinzo Abe kicks off his first trip after taking office to Vietnam, Thailand and Indonesia today. Global media all connect his trip with the intense state of the Sino-Japanese relationship. They consider that the purpose of this action is to contain China. Even some people in Japan shouted that they want to "encircle China."

Reuters - Japan's Prime Minister Shinzo Abe (L) and his Vietnamese counterpart Nguyen Tan Dung review the guard of honour during a welcoming ceremony at the Presidential Palace in Hanoi January 16, 2013

Encircling China? Those people may not know what they are talking about. Some people in Japan seem like paranoids who expect that China can be encircled. Some Japanese politicians are also not sober enough, such as Abe, who raised the proposal of "the arc of freedom and prosperity" in his previous term.

According to the Sankei Shimbun, Abe raised another strategy, suggesting that Australia, India, Japan, and the US Hawaii form a diamond to safeguard the maritime commons stretching from the Indian Ocean region to East China Sea. Areas such as China's Diaoyu Islands and South China Sea islands are all encircled by it. Sankei Shimbun said that the strategy is raised to contain China which is increasingly active in the ocean.

China is too large for this. It will be a joke in international strategy circles if Japan seeks to encircle China. It cannot achieve this goal even if it cooperates with the US.

Abe's visit to Southeast Asia will not bring China a sense of crisis. We can understand that Japan wants to strengthen its interests in Southeast Asia when the prospects of Sino-Japanese relations look bleak. We have no interest in competing for influence in Southeast Asia.

Japan in Asia is a good thing for China. There is no hope for Japan to defeat China strategically even there's a war between the two. However, Japan brings us stimulation and vigilance. It warns what kind of external resistance China may face in its future rise.

China should both take Japan seriously and be indifferent at the strategic level. Despite the prominence of the dispute, Japan is only a small part of the strategic hidden dangers for China.

If Abe's trip to Southeast Asia is aimed at "containing China," he can only reduce Japan's role on the political stage of Asia. The trip will only be a show without substantive content. Maybe Abe's cabinet is not so stupid. They want to expand Japan's economic space "after the Sino-Japanese friendship."

As to anti-Japanese feeling in Chinese public opinion, we should prevent it from being a trap for ourselves. We cannot be overly angry with Japan, concentrate all attention to Japan and forget others.

It should be Japan that worries most about Sino-Japanese relations, instead of China. China is rising and we are the driving force of changes in Asian geopolitics. Just let Japan mess about in China's surrounding areas. Japan's negotiations with claimants in South China Sea disputes will have no effect. It will be no better than a kind of self-comforting.

Frequent changes of Japanese cabinet have resulted in many political actions for show. Toward Japan, China should not only be cautious, but not to overreact.- Global Times

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American man looking for wife gets marriage offers instead

PETALING JAYA: After his wife went missing from the airport, American Henry Chuen went to the media hoping to find her. He did not. Instead, he is finding many women interested in taking his wife's place.

The 63-year-old man said many women had e-mailed him with “proposals”, telling him to forget about his wife, and be with them instead.

“More than five women have called me and told me to forget about my wife Lisa.

“They wanted me to take them away to the US and some even promised me that they would make me happy,” he told The Star yesterday.

But Chuen is not about to be tempted. He is more determined than ever to find his wife.

“I am touched that many women had reached out to me but my main goal is to find my wife.

“We made a vow of marriage...to me, that is one of the most sacred things in the world,” he said.

Chuen had previously sought the public's help to locate his wife Lisa Cheong Lai Har, 45, who had gone missing from KLIA just as they were to return to the United States in November last year.

Chuen met Cheong, an administrative assistant in a private college, through an online matchmaking website in early 2008.

They finally met in Kuala Lumpur after six months of online correspondence. On May 31, 2009, they married in Las Vegas and settled in San Francisco.

The couple last returned to Malaysia in September to visit Cheong's dying father in Ipoh.

Chuen is offering a reward for any information on Lisa. He can be contacted at 017-395 9491.

By SHAUN HO
shaun@thestar.com.my

West is failing to capitalise on rising China

We are rapidly moving away from an 'old world' dominated by Europe, the United States and Japan to a 'new world' led by China

 

SINGAPORE: Western nations have failed to capitalise on China's economic rise as they struggle with their own problems, leaving others to benefit from the Asian giant's insatiable demand, HSBC said.
 
"The world economy is increasingly led by China. Those nations raising their China exposure have outperformed. Western nations, faced with internal discord, have failed to grab the opportunity," the bank said.

"We are rapidly moving away from an 'old world' dominated by Europe, the US and Japan to a 'new world' led by China," it said in a report entitled "The Great Rotation".

Among the beneficiaries of the global shift are countries located close to China and far-flung exporters that supply the Asian giant's demand for commodities, the report noted.

South Korea's exports to China currently account for 12 percent of its gross domestic product (GDP), up from 3.5 percent in 2000, HSBC said.

Malaysia and Singapore are also key industrial exporters to China while commodities producers like Australia, Chile, Kazakhstan and Saudi Arabia "have also shared in the spoils," the bank added.

"And in demonstrating China's ever-increasing connections with Africa, Angola is now China's 14th most important source of imports ahead of India, France, Canada, Italy and Britain," it said.

Western countries, in contrast, have failed to exploit Chinese demand, it said.

US exports to China account for a mere 0.7 percent of US GDP, with Canada, France and Italy "more or less" at the same level, HSBC said.

Britain's exports to China are even less significant at 0.4 percent of British GDP, it said.

While Germany has expanded its trade ties with China, this was overshadowed by a bigger increase in its dependence on the rest of Europe, HSBC noted.

This is "one reason why, despite its competitive advantages, Germany found itself succumbing in the second half of 2012 to a crisis which had already engulfed other parts of the eurozone," the bank said.

HSBC forecasts China's economy to grow 8.6 percent this year, up from an estimated 7.8 percent expansion in 2012.

The US and Japanese economies are expected to grow 1.7 percent and 0.2 percent respectively next year while the eurozone is likely to contract 0.2 percent, the bank said.- AFP