Transformation Through Abundance
YTL Community News, October 18, 2011
Speech by Tan Sri Dr Francis Yeoh
Managing Director of YTL Corporation Berhad
At National Quemoy University, Kinmen,Taiwan.
17 October 2011
Transformation Through Abundance
INTRODUCTION
I am incredibly grateful to be here, amongst so many family and friends.
Please let me take this special moment to acknowledge the presence of both my beloved parents and all my relatives from Kinmen and afar.
Many years ago, my grandfather and his siblings, seven out of nine of them left Kinmen to seek a better future for their next generations. This afternoon, I am here because of their love, sacrifice, diligence and hard work. I want to thank my Lord for my grandparents and all those who went before me, for the wonderful blessings they left behind.
One of the most important legacies they gave us is the prime importance of education. Without which, my parents and I would not be able to be here this afternoon.
I always enjoy speaking to university students like you. You are open-minded receptive young minds with so much to live for, dreams to pursue and ambitions to fulfil.
I am also sure all of you hope to graduate with a good degree from this university. Trusting that your good grades will prepare you for good careers ahead.
However, many of you already know that the world today is in bad shape. There are upheavals and uncertainties at every level of politics, economics and society. I certainly don't blame you if you are concerned for your futures.
That is why this is the right time for me to impress upon you what I feel deeply about, which I hope will give you a sense of purpose and courage for today and tomorrow, including a peace of mind.
Let me share with you three things.
POINT ONE
MONOPOLY VS ABUNDANCE ECONOMIC MODELS
Globally and locally, it looks as if the global economic crises from 2008 have opened the Pandora's Box, bringing forth turbulence and uncertainties in unprecedented scale.
Inflexibility
I wish to suggest to you this afternoon that the root cause of these problems is 'inflexibility'.
• It is the long standing inflexibilities within political and economic systems and practices that have plunged the world to where we are today.
• Especially, the failure of governments, markets and businesses to adapt to changing times, as well as to implement strategies to move forward.
The inflexibilities have contributed to the global economic crisis in 2008.
• We have witnessed economies like Greece collapsing, whilst the rest of US and European economies sweat over their ability to avoid going down like Greece.
- Folks across Europe are not happy that their hard earned savings and pensions are being used to bail out countries like Greece. Last Saturday an Sunday, we witnessed orchestrated demonstrations across Europe and even in Taipei.
• In the meantime, across the Arab World, countries are collapsing politically. Rigid political regimes and dictatorships have been and are being toppled by peoples’ uprising. Libya and Yemen being the latest.
- Whilst elected governments are holding by a thread to stay in office, as voters hound on them to provide solutions to serious political and economic problems – caused, as I mentioned – by fundamental inflexibilities.
• Confidence in the global economy is all time low. We have seen the worst performances in capital markets across the world. Asia notwithstanding.
- People are now speculating just when Asia, especially China, will be called upon to bail out the whole world.
Monopoly Economic Model
This inflexibility is caused by what I call the monopoly economic model, which is prevalent in our world today.
1. Many businesses grow very fat by monopolising resources, technology and intellectual capital.
• They control the access to these things. Including commercial products and services from healthcare and communications, to our basic daily needs like rice, sugar, flour, fuel and energy.
2. When products and services are monopolised, businesses could charge high prices. For example, food prices are very expensive. The heavy costs invariably rest upon customers and users.
3. In many cases, we have low prices on many products and services. But only because they are subsidised by governments. But subsidies only play into the hands of the monopolies, because these businesses still make their huge profit margins, whilst we absorb the cost of subsidies indirectly as tax payers.
• What the collapsed Greek economy shows is the follies of any government heavily subsidising a few industries at the expense of the whole nation.
• This is irresponsible!
4. Monopolies also mean less choice. Customers don’t get to choose what they want, even if they pay for it.
For example:
- Satellite TV. If we want a football channel, we end up having to pay for a whole package of TV channels and programmes. Most of which we don’t watch. But if we want A, we must also pay for B, C & D. Subscribers are effectively subsidising for the other channels.
- Mobile Phone. Have some you tried subscribing for mobile internet services lately? Are you forced to pay for combined voice call and SMS packages as well?
- In some countries, you can't buy a smartphone like an iPhone without being forced to take up huge phone contracts.
- That's monopoly for you. That's not fair!
Let me make my point again. Monopolies cause massive inflexibilities!
5. Monopolies stifled competition.
- Competition grows businesses, develops industries and stimulates growth.
- When governments and market institutions interfere, they stifle all that. That is why governments are often accused of 'being bureaucratic'. This is just another word for inflexibility.
- That is also where and when corruption often begins.
• When competition is stifled, innovation and development will be held back.
- Entrepreneurs, inventors and innovators must be set free to get their ideas and products into the markets. The speed with which this is done could determine success and failure.
- Monopolies are disincentives to investment and development. It is that simple.
• Monopolies also create vicious cycles of inflexibility.
Conclusion
The monopoly model is immoral and irresponsible. Companies get away earning fat profits, whilst avoiding giving us access to important products and services cheaply and readily available.
But of course, it creates tremendous inflexibilities that stagnate governments and economies, and prevents businesses from bringing competition, innovation and development.
Abundance Economic Model
However, I am here this morning to champion the abundance model, which is a radically different paradigm and approach. It is responsible, practical and champions the common good.
1. By making resources, technology and intellectual capital, including access to these things abundantly available, we create an ecosystem that sparks business ventures, promotes competitive growth and nurtures business entrepreneurship.
(a) The internet has endless wealth of information and opportunities. And undoubtedly, it is the most powerful example of abundance in our world today.
• The world is saddened by the death of Steve Jobs, the founder of Apple. But at his death, Apple is valued more than Exxon Mobil – an energy company. And we know that energy companies were traditionally monopolies.
- What powers technology companies like Apple and Google is the internet. And because in America, there was and is no censorship of the internet, it spawned the silicon valleys and brought massive economic development. People could use internet to do business, to communicate to a larger audience, to come up with new products and services – essentially to better themselves.
- That is why America has their silicon valleys.
- That is why America is still the world's most powerful economy.
(b) Of course, there is intense competition in the internet / ICT world. You have to become competitive in the abundance model. There are no other alternatives.
• The internet is a realm of speed, efficiency and also 'smartness'. It requires much more thinking to convince the rest of the world that one’s products and services are worth the purchase.
• Let me also highlight Google Android.
- Some years ago, Google spent a lot of money to invest in the Android Operating System for mobile phones. Or Andy's droid. They made it an 'Open System', unlike Apple's iOS or Nokia's Symbian OS. Because Google does not make their profits from devices.
- Also, by opening up the android operating system to everyone, Google has given all of us the chance to innovate and come up with exciting Apps or applications for mobile phones. Apps are basically gateways to the wealth of knowledge and information within the World Wide Web.
- In fact, all of us here this afternoon could even design Android Apps to go on these mobile phones, sell them on the market, and pay for the expensive university fees.
- But what this also means is that the internet breeds flexibility – both in terms of marketing, as well as the delivery of one's products and services.
- That is why whilst Borders recently went bankrupt, Amazon is going strong. The internet has given Amazon the flexibility to function, coordinate and operate that physical bookshops cannot do.
• But don't think competition is not good for the companies that offer the resources, technology or intellectual capital.
- Google made the android system an open system. And last week, they announced a 26% increase in third quarter revenue, amidst the worst economic mess and downturn. They have benefitted in so many ways through the abundance model.
- This is also why in early February, Nokia's CEO admitted that the company was in trouble. Nokia's market share of the smartphone business had been overtaken by Google because Google Android System had "innovation at its core" with its open system. Nokia's ownSymbian Operating System could not compare with Google Android in terms of experience, which is backed up by an entire ecosystem, and they have also failed to put their innovative ideas in the market fast enough.
- They are not afraid to make resources, technology and intellectual capital abundantly. They also welcome competition, precisely because competition spawns innova
- Can we imagine if there isn't internet censorship in China?
• In the 1990s, together with a group of people, we persuaded the visionary ex-PM, not to censor the internet in Malaysia and he agreed. And this commitment has since been reaffirmed by the current PM.
- And because of this pledge, Malaysia now has the first and fastest nationwide 4G mobile internet network in the world.
- In Malaysia, we have brought the very best experts in 4G ecosystem to create not only this network and increase our national broadband penetration, but we intend to spearhead this 4G ecosystem – and hopefully across the region.
- Ladies and gentlemen, the abundance model works. Our 4G mobile internet attests to this.
POINT TWO
BE TRANSFORMED BY THE POWER OF THE INTERNET
Since we are on the subject of the internet, let me make my second point. The power of the internet has arrived. I want to encourage all of us to capitalize on the power of the Internet to advance ourselves.
Let me tell you all a story.
Palaeolithic Cave Drawings
In Lascaux, southwestern France, there are a number of 17,000 years old Palaeolithic cave drawings. One of them depicts a hunting scene. Like an instruction manual, this drawing should have demonstrated to the tribes how to kill animals during a hunt – where to target arrows and spears. Success or failure in killing these animals determined survival.
We know that copying drawings like these on other caves helped many tribes to progress and grow in strength. This was knowledge transfer that eventually led to tribes competing and dominating one another. That was how many civilisations started.
12,000 Chinese Characters
With 10,000 to 12,000 characters that evolved from copying shapes of objects and movements, the Chinese dominated much of the world for 4,000 years. It was the world's largest economy until the 1800.
Dynasties grew at the back of characters carved on tortoise shells, animal scapula or bones, and bamboo. Grand philosophies and great inventions were spawned. And the Chinese spread their knowledge and influence wherever they went – carrying these heavy loads in huge boxes.
26 Characters
From 14th Century onwards, the West expanded and subsequently conquered the world with 26 Roman alphabets. They brought about the Enlightenment, scientific and industrial revolution, and world imperialism – even invading China in the process.
Again, notably, western expansion coincided with the invention of modern printing by Johannes Gutenberg in the 1440s. He gave the world – books! Including the world's first printed Bible. Where books travelled, knowledge and information were disseminated. And scientific innovations and technological advancements follow suit. This helped societies to advance, develop and grow in confidence. They became strong.
The West's 26 characters overtook the Chinese and their thousands of characters!
It is so clear in history that whoever can simplify information, make it 'widespread' and get people to harness the information – wins!
Characters – 0 & 1
Today, the world has a neutral language regardless of race, nationality or creed. It is encapsulated in two numbers – zero and one. Binary numbers!
With 0 & 1, we could and have digitalised the entire Library of Congress, every picture from the Guggenheim Museum, all of Shakespeare's great works, Beethoven's compositions, and even the complete series of 24. We digitalised entire libraries, museums, orchestras and movie theatres.
And being the vehicle for this new language, the internet allows vast volumes of information to be transferred. That is why the internet is our 'e-tool' of learning, commerce, networking, gaming and even campaigning!
It has become our Khan Academy, our Alibabas and Baidus, our Facebooks and Twitters, YouTubes and Blogs!
Power of Mobile Internet!
But of course, with 0 & 1, everything once stored in huge computers the height of Empire State Building can now be squeezed into tiny ‘mobile’ devices like smartphones, iPads and mobile tablets. What Steve Jobs calls ‘Post-PCs’.
Steve Jobs likes Post-PCs precisely because he knows that the real power of information is mobility. He understands, as YTL does, it is essential to be able to access the internet whenever and wherever! To be powerful internet must be mobile!
And of course, to put a library in your smartphone whenever and wherever, you need serious mobile bandwidth. The smartphone is only as smart as its network.
Malaysia now has the world's first nationwide mobile internet network that could truly power chunks of information into smart mobile devices. YES 4G is the world's smartest mobile internet network with voice – by all accounts.
Legacy of History
My Friends, what does history teach us? Firstly, we learn that those who 'monopolise' powerful information will never like to share it!
The Qin Dynasty Emperor burnt Confucius books. The Church in the
POINT THREE
MASTERING THE THREE LANGUAGES
Finally, I have been asked to say something about our YTL DNA, and highlight some of the reasons why we have been successful as a company.
I wish to stress that the primary reason why we have done well, is entirely the grace of the Lord. We believe the Lord has generously blessed us, as we seek to be good stewards of His blessings and goodness.
Our Lord Jesus Christ is the God of abundance. That is why I champion the abundance model - sharing wealth and common goodness to everyone.
To this end, we are also fervent in mastering the three languages. All YTL staff and directors must have this DNA.
First and foremost, above all else, all of us must master the Language of God. The Language of God is understood in terms of integrity, Godly stewardship of assets, and diligence. This means we value honesty, we act transparently, we think long term and sustainably in our business strategies and ownership, and we work hard.
Secondly, we must master the Language of Man. In terms of all that we believe, we need to articulate who we are and what we are about. We certainly need to present our business ideas and thoughts coherently. After all, we serve over 12 million customers globally.
Finally, we must master the Language of Machine. We understand that as a company, we have to be smart, competitive and always be driven by technology. More so, as an engineering based company. Without having mastered this language, we would not have been able to build power plants, fast trains or the world's first nationwide 4G mobile Internet network.
The three languages inform, influence and imprint on YTL's DNA and is also our way of articulating practically who we are and what we a about.
CONCLUSION
Throughout this talk, I have tried to present to you the follies of an inflexible world caused by the monopoly economic model. In reality, monopolies thrive because of greed and the inherent desire not to share wealth and goodness with others. It is a system predicated upon all that is wrong about being "Me first and everyone else last!"
Instead, I champion the abundance model, which expounds on the power of sharing wealth and goodness with everyone, so that more wealth and goodness could be achieved and multiplied. For me, this model epitomizes God's goodness to all of us, and not just to YTL.
I also encouraged all of you to fully capitalize on the power of the internet. Technology has arrived and that we must all use it for the advancement of ourselves and other people.
But I also wanted all of us to be aware that the Internet is a powerful reality of the abundance model. That is why YTL has gone into 4G, which is giving Internet true mobility - it is Internet wherever and whenever.
That is also why, I am very keen to see here in the land of my fathers', that Taiwan also goes for 4G. This country already leads the way with technological development, with some of the best ICT companies of the world. Yet, as my friend in HTC bemoans, 4G has yet to take off in this country. You all must ask and encourage your government to head that way. So that throughout Taiwan, you could be a true mobile Internet giant, and be a leader in the next generation of Facebooks, Googles, HTCs and more.
But as your country is next door to Mainland China, it is also a distinct advantage that you quickly lead the way in 4G. As I showed you earlier, the world has been taken over by the binary language of 0 & 1. This is a message that China has embraced. This year, there has already been more internet-related business registered in China than non-Internet related businesses. We also know that there are so many more opportunities for Mainland China to move forward in the Internet world. Of course the internet is much feared by various political leaders. But the Internet is also a powerful tool for business and solving many social ills.
And if we have the right DNA, as I would advocate, there will be responsible usage of this powerful tool of abundance. You won't abuse it as some would. We mean to be a force for good and we persevere in bringing positive change through what we do. I believe God will reward us for this and I thank God, this is what He has done for YTL.
Please join me in this revolution for good. Your generation and my children's generation have the best opportunity to make my hopes come true.
Thank you and God bless all of you.
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