This article first appeared in Forum, The Edge Malaysia Weekly on November 4, 2019 - November 10, 2019

My all-time favourite movie is Dead Poets Society, which was released in 1989. The movie is a coming-of-age story that follows the experiences of a group of teenage boys in Welton Academy, an elite boarding school located in Vermont, in the northeast of the US. The boarding school is strictly conservative and led by a principal who is himself strictly conservative. Indeed, in the opening scene of the movie, we learn that the four pillars of Welton are tradition, honour, discipline and excellence.

I recall watching the movie when I was around 12 or 13 years old. I particularly remember my outrage at the strict traditions and conservatism of some of the characters in the boys’ lives. Perhaps it resonated with me because I was going through my teenage rebel angst phase. During those years, I got fired not once but twice in two years as assistant class monitor. In retrospect, it is embarrassing to get fired as assistant class monitor, which essentially is a job where you literally do nothing.

But anyway, last month, in this newspaper, I questioned whether Malaysia is actually ready for what it claims it wants — innovation-based growth. As a reminder, when we say that we want to move to a technology-based economy or an innovation-based economy, what we are really saying is that we want more growth in the form of what economist Joseph Schumpeter called “creative destruction”. Not long after I wrote that article, I listened to a podcast called “The Rewatchables”, which had a near two-hour discussion on Dead Poets Society.

Naturally, that saw me watching scenes from the movie again and I could not help but reflect that Welton would be a terrible place for innovation. Anytime a core pillar or a core value is “tradition”, it does not lend itself to an environment of innovation. This is not to say that tradition does not have its value; of course, it does. It works well in certain customs and I think it is important to give respect to practices and things that worked well in the past.

Innovation, on the other hand, requires a healthy and sometimes unhealthy scepticism about tradition. After all, as Schumpeter put it, the “gale of creative destruction” describes the “process of industrial mutation that incessantly revolutionises the economic structure from within, incessantly destroying the old one, incessantly creating a new one”.

And this leads me to Malaysia and back to the question of whether we really are a society ready for innovation-based growth. Using the World Values Survey, which measures attitudes towards social norms and values on a country-by-country basis, and based on a representative sample from those countries, I selected China, Germany, India, Japan, the Philippines, Singapore, South Korea, Taiwan, Thailand, the US and Malaysia. And I looked to see what the responses were to the question, “If tradition is important to a given person, how much like this person are you?”

Among those countries, Malaysians tended to answer in the affirmative more so than other countries, even the Philippines. The interpretation is that Malaysians value tradition more than the people in these other countries. Some 68% of Malaysian respondents said that person would be “like me” or “very much like me”. This corresponds to Geert Hofstede’s Power Distance Index, which measures the extent to which the less powerful members of organisations and institutions (like the family) accept and expect that power is distributed unequally. Malaysia has the highest Power Distance globally.

If we want to see the impact of this in real-world terms, consider the work of Harvard economist Filipe Campante and National University of Singapore economist Davin Chor, who studied the interplay between cultural attitudes and the economic environment, focusing on attitudes to obedience in the workplace. To be clear, obedience alone does not translate into tradition but it is relatively safe to assume that more traditional cultures also tend to value obedience more.

The authors found two key facts. Firstly, at the country level, an increase in workplace obedience over time is associated with more exporting in industries that feature a high routine task content. Another way to put it is that workplaces that prioritise obedience are associated with low value-added exports that are very routine in their production.

Secondly, at the individual level, the degree of “export-routineness” in the economic environment that the respondents were exposed to in their formative years — but not in their adult years — shapes the pro-obedience attitudes that they carry with them into the workforce. This means that the more individuals are exposed to routine production, typically of low value-added exports, in their youth, the more likely they are to be obedient in the future.

The authors call this an “obedience trap” — countries may specialise in routine activities, say, simple assembly to re-export, which then induce pro-obedience attitudes that, in turn, hinder the development of non-routine sectors that are typically more skill-intensive. Let us not forget that more routine tasks are also more easily automated, putting more jobs at risk.

Accordingly, the authors suggest that this lends support to the concern that pro-obedience cultural traits might make it difficult for countries to transition from the early stages of industrialisation, even though such traits may have been helpful in the beginning. In short, pro-obedience attitudes do not make for an innovation-based economy.

If all of this rings a bell, it should. When we ask if Malaysia is ready for creative destruction, one part of the question is whether we are ready to accept the consequences. The other, which describes this tradition-obedience point, is whether we are capable of generating creative destruction. Culture clearly matters and, unfortunately, culture is something that is super difficult to change overnight, especially a culture of tradition. Researchers have found that a reversion to tradition, amid a wave of change, is actually a common occurrence in history, such as the Ottoman reform initiatives, the Japanese Tokugawa reforms and the Tongzhi Restoration in Qing China.

But that is not to say that we cannot take small steps. The development of Malaysia is a long-term game, and Malaysia — if we do not screw it up — will outlast all of us and, hopefully, our far-distant descendants. This also means that we need to lay the foundations for those very descendants and that far-away Malaysia.

One small step could be for those in authority and in society to not get so worked up about a relatively small but impactful act of civil protest, and just allow instances of non-violent civil disobedience to take place where they happen instead of telling people to go through the proper channels. We need more individuals to be role models in telling the truth to power and in having a healthy scepticism about authority. More tradition and obedience will take us further away from being an innovation-based economy.

Nicholas Khaw is an economist with the Khazanah Research and Investment Strategy Division

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