Beyond second skilling...

Thought I should share with everyone my view on NTUC PME's drive to promote second skilling amongst PMEs in Singapore.

Second-skilling is a straight forward concept. It encourages Singaporeans to develop hobbies which can be monetized. A manager in manufacturing plant can develop a hobby in photography and eventually gains a degree of protection against job loss when he starts taking professional photographs.

In the absence of actual data of folks monetizing their interests, I would like to share my personal experience.

My biggest success with second-skilling came with teaching myself how to invest. Investing is a great secondary skill to develop although the results can vary. What I felt worked for me was that I was willing to go all the way to become a competent investor. I was eager and happy to study all the qualifications out there using my leisure time because I wanted to become my own private banker and financial advisor. Of course, this success was also fueled by my willingness to pump capital into my portfolio.

However, not all of my hobbies end up earning a profit, I would consider my foray into writing a lukewarm success, or even a financial failure. Out of the three physical books I published, only one broke even. My e-book sales are very minimal, earning about $1.50 on a good month from Amazon. When I started writing,  I was mainly trying to crystallize my thoughts and investment ideas with the secondary objective of building up my personal brand, but my investment of time and money was small - only about $15,000 for all three books.

The jury is out on whether my third-skilling attempt of getting into Law School would pay-off over the long term. There are a lot of concerns on where the legal industry is heading over the next 10 years. But for reasons I will share later, I'm still optimistic that I can find a humble role in spite of the oversupply of lawyers in Singapore.

Ok, now the really theoretical part of this discussion.

I believe that a model on second skilling can be derived from Solow's Growth Model in economics.

Without getting into the gory details, imagine growth to be a function of three inputs Capital, Labor and Innovation.

In Solow's Growth model, under early phases of growth, you can keep injecting capital and labor into the effort and an economy will grow fairly quickly for a decade or so,  after which it will plateau unless you find ways to innovate and differentiate the economy from its peers.

If we apply this model to second skilling, here are some useful insights.

For second skilling to work, you need to put in time and money to get to this point when people will pay you to indulge in your hobby. If you are a photographer, you may need to practice your skills in shooting and composition. You may also need to constantly upgrade your gear and it can cost you loads of money. This  explains why some of my efforts bear fruit while other attempts fail. This also provides me with some optimistic feelings due to my substantial time and money commitments to crack legal cases in SMU.

The next insight is that hobbies are fun and a lot of people would drop their current day jobs if they can make money from what they perceive as fun : this limits how far you can go with your hobby. Monetizing a hobby can be Red Ocean territory.

The remedy for reaching a plateau to how much you can extract from your hobby is innovation. You need to apply your hobby in a novel or niche way. Example, folks who love painting Warhammer miniatures can differentiate from other by winning the Golden Daemon Award and even get into giving painting classes to secondary school kids. You can create a new product or seminar from your love of miniatures painting.

I'm not spared from the innovation requirement. Before I graduate, I will need to find a niche within the legal industry which would have to combine my technical skills, investment know-how and new found legal analysis skills to convince someone to take me in.

So in summary, do proceed to monetize your hobbies as recommended by NTUC, a secondary source of income is always a good thing :

a) You need to pour in money and time for your hobby to bear fruit, but there are physical limits to how far you can go with this. eg. Once you get the top of the line camera, paid for the Photoshop license, everything else is based on your skill.
b) If the hobby is especially common, you need to make your attempts unique and distinguish your product offering to the market.