Thursday, May 27, 2010

Protectionist Professionals

It is a natural human tendency to dislike your competitors and work hard to outdo them. After all, that is the very essence of a market economy. In an industry where there is healthy competition, there will always be new comers who give the established ones a run for their money. There will be cases where the big players become not-so-big or completely bankrupt.

20 years ago, IBM, DEC, Gateway were the big names. Today no one talks of DEC and Gateway, and IBM is not the giant it used to be.

10 years ago, Google, Mozilla, Facebook were barely heard. But today, they are household names.

With all that fierce competition, the consumers are the winners. They get better and better products (or services) and at cheaper prices.

Similarly, the building design industry in this country is a very competitive industry. There are companies big and small, and there are freelance practitioners. The prices have consistently come down, and quality have improved (depending on who you ask). But this won't be the case for long if some people get their way. The issue at hand is the case of licensing of practitioners.

There is no problem with licensing per se. Afterall, proponents argue that licensing always has been that it protects the public from incompetents, charlatans, and quacks. The problem is that the licensing tends to become categorized and stratified so that new people get to participate in the lower class first. More importantly, it restricts entry and reduces competition within the field.

Now if someone can tell me how reducing competition will reduce prices, give consumers more choice, make service providers more innovative, then I would like to hear that argument.

It appears that here in Maldives (just like every where else), the existing established players are feeling the heat from the new coming competitors. No one is disagreeing that the new comers will have less experience etc. But the question is, should the existing players be given control over the future of the industry in the name of protecting the public? Should they be allowed to put up barriers to entry and reduce competition? Should they be allowed to insulate themselves from competitors? After all, if what they say is true (that they are more experienced etc), why are they so hesitant on competing on a level playing field? Why can't they deliver better services to their customers than the new ones?

Is it not a conflict-of-interest that people who get to sit on the licensing boards are the ones who will feel the competitive pressure from the new entrants? I wonder what such a body's code of conduct says about conflict of interest!

We don't really need a regimented licensing regime. What we need is a certification system, much like the independent certifications such as A+, MCSE, CCNA etc. That way, we remove the conflict of interest, and also while giving the public proper information about someone's qualifications. That way we remove the politics from the professions.

4 comments:

Anonymous said...

agreed

Public said...

good read...many (not all) established practitioners argue that they can't deliver a good product because the prices are low....this argument itself says a lot about their lack of ethics and professionalism..

Will lack of competition and eventual "satisfactory" prices yield a better product? Ask the EIA evaluators!!

What surprises me the most is, the Government, who should be protecting the biggest stakeholder in this, that is the Public, is bending to the pressure to these self proclaimed Protectors of Professionalism

meekaaku said...

Public,

It is not a surprise that governments support regulations that are favourable to special interest groups. It is a clearly understood problem. Economists call it 'regulatory capture'.

If you look at the regulations around the world (not just this field, any field), you will find that 90% are made to favour the special interest groups.

Which raises interesting question about the role of governments, and to what extents have governments succeeded in doing this role.

boadhaabas said...

capture theory at its best!