Economics of incompetency

An economy can suffer and growth affected in two ways when analysed from a non-economist’s point of view. One aspect is gross inefficiencies of all what one does. Inefficiencies in that context were addressed in my earlier column comparing with nations that took a different direction addressing precisely that factor.

The second significant contributor would be the incompetencies of the human resource pool that constitutes the workforce from decision making downwards. Incompetency implies the non-availability of the required skills and knowledge to contribute to the development process.

Perhaps some of the administration based inefficiencies or dysfunctional behaviours that contributed to economic processes to time-consuming regressive process steps that I identified may be defined as administrative incompetence too. With development increasingly getting tied to knowledge and innovation deployment, the skill set necessary is becoming challenging by the day.

Talent war

The talent war is on and the residuals may only pose issues for the economy in which they sit. This is becoming a real challenge as the worldwide transformations taking place make economies cry out in need of talent for development and growth as the development mantra is development via innovation. Removal of talent, repressing talent or inherent failures to develop talent can push economic systems into economic backwater.

Authors of ‘Future Wealth’ wrote: “When land was the productive resource, nations battled over it. The same is happening now for talented people.” Our talent may disappear in multiple ways through airports and boats and some may simply switch off the gene and may just intend on minding one’s own business when faced with inefficient lethargic systems.

When we go through the day discussing points of order and end up only getting a few things done, there is hardly the opportunity for creativity and innovation.

An Institute of Policy Studies (IPS) analysis using available institutional data provides us with a crude estimate of how things are shaping up in employing with skills in the national context. The average annual number of highly skilled jobs generated or which will require filling is identified to be around 100,000, taking away the ICT-related categories.

What we have as the average annual graduate output is around 12,600 from the tertiary education sector and if many of them have their sights fixed elsewhere, the numbers available internally would be much less than that number too. It is worthy stating their summary of our international standings too.

The Global Innovation Index had positioned Sri Lanka at 94th among 141 countries. In this composite index, Sri Lanka had been ranked 128th in the sub category of Tertiary Education. With data on graduates in science and engineering absent – there is a strong need for accurate and dynamic data mining and availability – and had been positioned 86th in the Research and Development sub category.

The Global Talent Index had ranked Sri Lanka at 59th out of 60 countries. This last data point is not quite useful for any publicity by way of promotions. As nations are ranked and with indicators becoming quite standardised and out in the open, we just cannot hide our position internationally, with the only way out being purely through improvement.

US attacks

In the USA, the Boston marathon bombing captured much attention. It demonstrated how two young men can acquire skills necessary for destruction and execute as well. It is said that all three devices they improvised worked with perfection.

They used ICT for the disadvantage of many and brought a city literally to a halt. At about the same time in the tiny town of West, Texas, USA, a fertiliser factory a fire and an explosion led to 15 deaths and 160 injured. The first to respond in that incident walked straight into danger as the explosion followed the fire and the explosion possibility had not been envisaged. Or was the latter resulted as a mistake of using water where the normal rule states that it should not be used, thus creating the scenario due to lack of knowledge?

The nearby houses which were damaged and destroyed poses the question were they allowed to be built in the wrong position? What one usually teaches about safe separating distances based on quantities of material handled in a chemical facility appeared to have been ignored.

These two situations in analysis demonstrate the complexities one faces in growth and development and the importance of the knowledge dimension. In the first situation, the development of individuals with skewed thinking but with talent and the availability of information and material leading to self-destruction along with others.

The latter is another reminder on the importance of commodity production facilities to further our existence and wellbeing but when operated minus skills and knowledge at all levels, the very facilities can bring our downfall. A reminder to us as we plan fertiliser plants ourselves today minus facility citing fundamentals. The role for proper human resource development and deployment is obvious.

Lesson for us

The requirement of skills and personnel for all levels can be demonstrated with the following and is also a lesson for us. An enigmatic governor from the State of California had placed his US State to focus on the convergence of three technologies – nano, bio and info and to plan skills development accordingly.

The returns will come from having people with skills too in relevant areas and the skills pyramid that California has come forward in one instance shows the requirement of 200,000+ individuals. People with new skill sets are needed because old tricks will not work anymore in the new economy. This calls for real planning from the kindergarten itself. Where are the similar pyramids from our planning?

It is humbling when one views the Peter Principle and quite sobering if one faces reality with what it says. Every position is occupied by an employee who is incompetent to carry out the duty – oops! Remember this arises from the principle which states that the tendency for a person to rise to his or her level of incompetence. Thus the position one finally occupies will not be able to deliver as he or she has risen above the level of competency.

Peter may have expressed this quite bluntly but across the board if one promotes personnel to a level above their competency, the net result for the economy as a whole is obvious. How are we to avoid this situation? What competencies do we have in turn to understand and dictate the situation, as we obviously have to fill positions? We too may be in the same difficult situation. Only chaos can set in and Peter from somewhere may be nodding his head as still sees his theory valid in a more digitally connected world.

Just consider the scenario IPS has shown – we have to fill about 90,000 with personnel with less than desired skills! Some even have misgivings about the 12,000 too about their immediate suitability.

With the Peter Principle on one side and growing societal complexities, the demand on skills and competencies to steer an economy towards growth appears to be challenging as ever. Like the two youngsters in Boston our own behavioural patterns need some scrutiny and understanding as well as factoring in for decision making.

Mobile revolution

About 40 years ago history was made when Martin Cooper of Motorola called a colleague in Bell labs from New York using the first prototype cell phone. Forty years since Sri Lanka has mobiles much more than people and the ratio between machine and man has tilted for man carrying more machines or SIMs in this case. There are times perhaps the machine is smarter than the individual with whom it resides.

Martin’s call heralded a new revolution and equipped people with advanced technologies and immense possibilities. Today a Sri Lankan kid on the street with a smart phone has more access to information than what a US President – arguably a person who will have more in depth and on time information – had in the early 1990s.

The availability had caused a Google world record for Sri Lanka beating even crowded metros of India in search intensity for an exciting subject! Time and energy spent in such searches too is like the young Bostonian twosome equipped with skills of a counter nature. The economic impacts will never be positive.

Today the way we behave appears to be counter to what Abraham Lincoln said: Do not worry when you are not recognised, but strive to be worthy of recognition. The pursuance of the former had led to more beauty parlours and lack of understanding of the latter means we do have less than worthy deeds taking place across the board, thus having little or no contribution to economic growth. GDP may add the contribution of the summation of goods and services from a beauty parlour in its economic evaluation, yet we know that these will not take us far!

Man in society is always in motion and is intended on doing things. Idleness is not the hallmark of mankind. The competencies within will be shown by the net results through action. One can watch and decide and time will certainly deliver results from whatever the engagement.

“Nothing is more terrible than to see ignorance in action,” Johanne Wolfgang van Goethe expressed the feeling very well. Failures of the economy when options are available, innovation is called for yet failed to be applied, may remind one of Goethe and his comment!



(The writer is Professor of Chemical and Process Engineering at the University of Moratuwa, Sri Lanka. With an initial BSc Chemical engineering Honours degree from Moratuwa, he proceeded to the University of Cambridge for his PhD. He is also the Director of UOM-Cargills Food Process Development Incubator at University of Moratuwa. He can be reached via email on [email protected].)