Human is very creative. The revolution industry, the war, the showcase of innovation at the speed of imagination.
Gunpowder 3 MJ/KG Flash Point 427°C 9th Century China
TNT 4.6 MJ/KG (C6H2(NO2)3CH3 Trinitrotoluene) 1863 Julius Wilbrand Flash Point 427°C
Dynamite 1867 Alfred Nobel
Plastic Explosive 1875 Alfred Nobel
We live in simple world, but somehow it looks very complex.
We talk about technology, IT, gadget but its all about tools, things that help us.
Nuclear power, wind energy, shale gas is tools, its science.
We talk about business, politic is all about economy.
We talk about management, efficiency how to be better at managing people is all about culture.
On the top of everything, what is most important? I would argue is about culture. How we define culture? on the smallest things, let start about your life, about your career, about your family. Let start from the bottom.
Let start with what we are facing day to day: Culture
Let start with what people need: Economy, Economy is demand management
Let start with what is our idea: Technology
At the end most of jargon is man-made, a social construction.
People try to sell something for you, its always an economy motive
We can have technology to help or defend us
But at the end the greatest power is on the collective people is a culture.
To be able to success, A seller must have its buyer, and they are must be equal
A culture make it possible, to have the producer at the same rate of consumer
You are not making a profitable business without meet this equation
Even you are very good (in making something) it is nothing if no one a buy it (care about it)
Let start this exercise for Indonesia
What people need? a secure feeling.
What effort required? minimum, major changes will not work
What should we do? working on something that executable, that makes the equation work
Where is technology roles? is just a tools, it follows the story
This is story about Knight killing the Giant. People did not care which weapon that the Knight use. Does the Knight use sword or spear. Nobody care about technology. People care about what if their friend ask about latest Avenger Movie, People care about their need of imagination fulfilled. People care that they live in era that everybody watch movie. People care about their culture. With the culture economy works like a magic.
Culture is what works
Economy is what make it works (and risk is what make it fail)
Technology is another way to make it works
Politic is to make it works
Microeconomy is business, is where demand meet supply, is demand management, equilibrium
Macroeconomy is the world, is GDP, is inflation, is monetary system, is income/expenditure, is forex/trade
- The core ideas in microeconomics. Supply, demand and equilibrium https://www.khanacademy.org/economics-finance-domain/microeconomics/supply-demand-equilibrium
- It was very difficult to definitively identify a bubble until after the fact–that is, when its bursting confirmed its existence. Alan Greenspan, former Federal Reserve Chairman, Jackson Hole, August of 2002
My grandfather has a sweetshop, its very successful at that time. It has the strategic location in front of big traditional market. It is the only pribumi shop in main street at that time. But after my grandfather died, long time before I was born. The shop performance decline and closed. The reason? when I ask my mother, she said “I did not know”
My mother in law also has successful fish stall, but none of her children able to continue the business, which is technically low risk, high gain. When I ask why, she said “I did not know, I can not teach it”
So, if my closest connection in this life, which at that time very success, but unable to leverage the success story to their children is a question for me. In my opinion, even a small business is very complex. And there are so many hidden factor that people did not know, did not realize, or did not learn.
My grandfather for example, maybe because he quite often travel to Surabaya. Or maybe because he is a taylor, so he knows many important people at that time. And my mother in law, was maybe because she made her fortune by making a right decision in 1990s. We will never know and we can not analyze this. Even if we can do its only on surface.
How about Indonesia? it is a country. A country level and its far far far more complex and the best way to understand it, is from inside.
- http://www.indexmundi.com/world/gdp_composition_by_sector.html (World GDP composition Agri 6%, Industry 30%, Services 63%)
- http://www.atkearney.com/news-media/news-releases/news-release/-/asset_publisher/00OIL7Jc67KL/content/id/5273085 (Worldwide sports event market share in 2009 Football 43%, US Footbal 13%, Baseball 12%, F1 7%)
- https://www.sportengland.org/research/benefits-of-sport/economic-value-of-sport/ (sport contribution to UK is 1.9% in 2010)
- http://www.academia.edu/3527256/Thailand_s_Creative_Industries_Contribute_10_of_the_Nation_s_GDP (Thailand Creative Industries contribution to GDP 10%)
- http://economy.okezone.com/read/2014/10/21/320/1054971/ekonomi-kreatif-berkontribusi-7-ke-pdb-indonesia (Indonesia Creative Economy contribution to GDP 7%)
- http://www.hollywoodreporter.com/news/hollywood-creative-industries-add-504-662691 (Hollywood Movie contribution to US GDP 3%)
- http://devdata.worldbank.org/AAG/idn_aag.pdf Indonesia GDP by Sector
- http://www.meti.go.jp/english/report/downloadfiles/gIT0213e.pdf (development service industry in develop countries)
- http://www.thejakartapost.com/news/2010/04/12/services-sector-an-alternative-route-high-growth.html (So, even though the growth of the services sector can pull up the overall GDP growth, it should not, and could not be an alternative to growth in the manufacturing industries.)
http://www.economist.com/node/18712351 (can poor countries leapfrog manufacturing and grow rich on services)
Indonesia is a $ 800 bil country, each year (Foreign Direct Investment) FDI is around 2% of GDP, so its around $16 bil. But FDI is very very important, because the Domestic Invesment is almost one third of Foreign Invesment. Japan is the biggest investor for Indonesian economy. Of course, if you an investor you will have diverse portfolio of your investment. So some investment in high return business such as motorcycle manufactur which is 3-5 years, but you have also long term investment in 20-30 years such as LNG manufactur business.
See the problem ?
1. Indonesia is a Rich and Poor
Its 4th largest population (250 mil) a $800s thousand GDP (rank 16th), but a poor $3500 GDP (rank 115th)
2. Indonesia is Agrarian Society
Indonesia economy is mainly from Agriculture 17%, Industry 47% and Services 38%, we are developing country. A develop country have larger portion in services sector. Let say US, EU and Japan with Agri 1%, Industry 20% and Services 70%.
3. Indonesia is Natural Resources
10% of our GDP is from it. So we have like 40% from Coal, 30% Oil, 16% Mineral, 8% Gas and 6% Forest. A develop country does not have (or very small portion) a natural resources.
4. Indonesia is Commodity Product based Export
From export composition, Mining 35%, Manufacturing 25%, Tourism 15%, Agri 2%. That’s why Indonesia never export any agriculture product, because mainly production is consume domestically. So what is 35% mining? its from Coal 12%, Petroleum Gas 9%, Crude 6%, Other Petrol & Metal 7%
5. Indonesia is a State Owned Enterprise (SOE) Plays Important Roles
40% of GDP is from SOE (Indonesia Ministry SOE)
6. Indonesia is low investment
FDI Inflows 2.5% of GDP
Others indicators that quite the same with other country
Tax Contribution to GDP 15%
GDP Composition by end use, Household 56%, Government 9%, Investment 32%. GDP Composition by trade 23%
- http://data.worldbank.org/indicator/BX.KLT.DINV.WD.GD.ZS (Foreign direct investment, net inflows (% of GDP))
Never underestimate the power of denial, the predictability of stupidity
Never underestimate a thing, its all an indication, a symptoms
Control yourself, be objective.