Wednesday, February 20, 2013

Services Heavy Economy Is Hard for Productivity Gains Compared to Manufacturing

The scholars in S'pore ruling Pro Alien Party are no geniuses when it comes to running the economy. Much of the manufacturing base has hollowed out of this tiny island due to high land costs. Tenure of new industrial land has been cut from 60 years down to 30 years.

Building not 1 but 2 casinos is a desperate attempt. Apart from the evils of gambling & its 2 other evils (illegal $$ lending & prostitution) which accompanies it, the services industry is much harder to have productivity gains.

Again the insult on nurses by the ruling elites:
"Certain low-skilled jobs like personal services, retail, and nursing are hard to offshore. They will still be needed even as the economy upgrades."

Productivity gains are limited in services & in some cases end in destruction

2 hour concert
Singer sings at 2x speed (2x productivity) - experience destroyed

30min massage
U got a body massage at 2x speed & 2x intensity - experience destroyed

Nurse feeding a bedridden patient
Feed at double speed - patient vomit out.

Supplier industries for services are lesser compared to manufacturing

2 hour concert
No factory making & sending parts for concerts.

30min massage
Apart from massage oil, there's no supplier of parts.

Nurse feeding a bedridden patient
Attention, care & concern as key ingredients - these ain't need a factory.

R&D for manufacturing
2 hour concert
R&D budget to hire scientists to discover how to sing better for a singer don't exist.

30min massage
Ditto as above. Services are limited compared to manufacturing which has more spillover effect with supporting suppliers & R&D.

Nurse feeding a bedridden patient
R&D (high paying jobs) in pharmaceutical companies pave the way for manufacturing(after testing). Hospital sells services. I don't see R&D budgets & departments in hospitals.

For the 2 casinos in S'pore, some limitations of personal services:
  • How much faster/slower in dice rolling or in dealing cards?
  • Vast bulk of day-to-day supplies are food & drinks (U call that high end?)
  • no R&D spinoff
Unless the Pro Alien Party is voted out in 2016, don't expect much productivity gains in S'pore because of:
  • addiction to cheap foreign labor
  • fallen into services economy trap
Powerhouse Germany did not fall into services economy trap. Apart from german cars, there is another often forgotten german product which we as kids use:

Pencils made in Germany:
- Staedtler
- Faber-Castell

German stationary manufacturing industry has carved a niche in the world. Pencils manufacturing are mechanized for high productivty in Germany. Although China is now considered the factory of the world, manufacturing is still a vital part of the economies of South Korea, Taiwan- their govts did not fall into the services trap which S'pore's Pro Alien Party fell into.

1 comment:

  1. Hi Xianlong,

    > Nurse feeding a bedridden patient. Feed at double speed - patient vomit out.

    Hahaha, you're spot-on and hilariously funny in this blog post. It is amazing how the million-$ ministers pretend to ignore all the failures in their past policies, when it is clear to plebeians like us. Keep it up!

    Cheers, WD.