Donald Trump

Trump’s alpha male Darwinian feat in the US election is the power of disruption in full play

Andrew Sheng says the way of the tech age is ‘disrupt or be disrupted’, and achieving the unthinkable rests on sheer willpower, as exemplified by the rise from nowhere of Donald Trump and Shenzhen

PUBLISHED : Friday, 11 November, 2016, 1:01pm
UPDATED : Friday, 11 November, 2016, 6:45pm

I was going to write about disruptive technology, but the whole week has been taken up with the disruption of Donald Trump, as he upset the American establishment by winning the US presidential election.

Trump’s victory repeated the Brexit phenomenon: that the elites don’t get it. Trump basically tapped into the anger in the dominant American white voter that life has not been good the past 30 years – attributing this to globalisation, immigration, disruptive technology and, mostly, the failure of the elites to listen.

There was something quite Darwinian about the US election. Here was an alpha male challenging the establishment, both on the Republican and Democratic sides. Against all odds, he defeated the Bush dynasty and the Republican party leadership to win the nomination. Then he crushed the alpha female (Hillary Clinton), partly because somehow no one could quite trust what she really stood for.

We are likely to see some major changes affecting Wall Street. Remember how, in 1934, newly elected president Franklin Roosevelt sent Joseph Kennedy Senior to go after Wall Street?

Obama and Trump’s first White House meeting

How did Trump get here? Firstly, as a businessman, he understood that the old model was broken because he read the signals right – the average American voter was angry and wanted their issues fixed. Secondly, he knew that the mainstream establishment media was against him but they didn’t get what his pollsters were reading. The web traffic was showing that his outrageous statements were touching raw nerves. Politics is, ultimately, about the gut rather than the rational mind. Thirdly, the pollsters were reading the old tea leaves, not appreciating how voters were refusing to show their hand till the last minute.

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An American friend had this insight – most of his friends refused to tell anyone that they supported Trump. They did not want to appear politically incorrect in supporting a ranting candidate who was not singing along to the traditional songs. But they wanted change – and Obama had not delivered.

So, what next for Trump and for Asia? Based on his campaign language, Trump is likely to be quite tough on allies and competitors alike; essentially, everyone will have to look after their own interests.

The election also showed that what concerns voters most is the need for good jobs. This is where globalisation and technology disruption have upset the status quo. Jobs either go abroad where wages are cheaper, or technology is such that most manufacturing can be done onshore, but robotics is replacing grunt labour.

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Hence the only tech-age solution is proper education and training on the job. In the tech age, governments cannot assume the market will provide jobs without state help. Employers need to be aware that you can’t shed labour without investing in people. Universities and schools have been disrupted by the internet, because the best teaching is now accessible online and mostly free. Who needs uninterested local professors who are still teaching outdated texts they learnt 30 years ago?

Increasingly, societies are networks across which goods, services, information and value are traded, exchanged and created. Those who have access to these networks grow wealthier, outstripping those who are not.

Hong Kong is a perfect example of how cities become successful by being a free port, with low transaction costs, rule of law and access to free information. A superior marine port, with airport and road, and now rail, connection to the mainland made Hong Kong not just the entrepôt for global Chinese trade, but also a globally connected city.

But making money through trade, finance and real estate is no longer viable when every business is disrupted by technology. Alibaba, Amazon, Google and Facebook are just a bunch of smart people who integrate multiple markets using their digital platforms. Their cost-expense ratios are a fraction of the traditional business of Wal-Mart, property developers, banks and newspapers. They have global reach, especially among the young and mobile.

All this means that as America becomes strong under Trump, every country or city needs to compete even more fiercely in the digital age.

Shenzhen tech firm Kuang-Chi launches turtle into near space

I was in Shenzhen last month looking at how they are coping with the digital age. Shenzhen is now green and dynamic, with showcase drone technology, Huawei telecommunications and genomic technology that are at the cutting edge of innovation. No one I talked to cared about the angst in Hong Kong, where young and old are still squabbling over identities. Shenzhen is moving to compete with Silicon Valley, Bangalore, Shanghai and Hangzhou. And this is a city that, 30 years ago, had no university of its own and no serious manufacturing to speak of – an immigrant city finding its own place in global technology.

Disruption comes from sheer willpower. Either you disrupt or you become disrupted. Trump and Shenzhen are showing the way.

Andrew Sheng writes on global issues from an Asian perspective