US commerce chief sees PH start-ups as equalizer to family-led conglomerates

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By Tom Noda In a candid, if not scathing, critique of the local economy ruled by a few family-controlled corporations, US Secretary of Commerce Penny Pritzker said start-ups could serve as an economic tool that can help distribute wealth among Filipinos. [caption id="attachment_18548" align="aligncenter" width="501"]US Secretary of Commerce Penny Pritzker (left) with Kickstart Ventures president Minette Navarette US Secretary of Commerce Penny Pritzker (left) with Kickstart Ventures president Minette Navarette[/caption] This is according to select founders of local start-ups whom Pritzker met during a roundtable discussion on Wednesday, June 4, at the headquarters of tech incubator Kickstart Ventures in Makati City. The US official did not meet with the local press, however. Paul Rivera, CEO of local cloud-based start-up Kalibrr, told reporters that Pritzker was interested in utilizing entrepreneurship to trickle wealth down to everyone else and to solve the problems that prevent the country from building a large base of businesses. “The strategy for the Department of Commerce is to support innovation and entrepreneurship around the world, to provide an environment that supports people taking risks,” Pritzker said. “The support for entrepreneurship is very important because a significant part of the economic world comes from new business.” Rivera told Pritzker that 80 percent of the country’s wealth is controlled by 40 of the richest families in the Philippines, a fact that Pritzker did not find amusing. Interestingly, Kickstart, which hosted the meeting, is a subsidiary of Globe Telecom, the telco owned by the old-rich Ayala clan. Rivera said Pritzker did not like the idea of dealing with the same 40 wealthy families every single time, quoting her as saying: “They’re just getting more powerful and wealthier.” He said Pritzker wanted to find ways on how US businesses can identify with other families and entrepreneurs in the Philippines so that wealth could reach the bottom of the pyramid. Rivera also noted there is a tremendous amount of demand from US businesses and investors to come to the Philippines but they also need to know and find other partners. In response to Pritzker’s query on the difficulties of coming up with large scale businesses in the Philippines, Rivera mentioned the lack of business competition, new infrastructures, and having a slow and expensive Internet connection. “Internet sucks in the Philippines because there’s no competition. It’s a duopoly between two organizations,” he said. “It’s not just low quality service but is also very expensive, per megabyte.” Rivera added the present infrastructure level is limiting the potential of many enterprises in the Philippines to succeed. “Many businesses and start-ups are all trying to build online technology-based businesses. If we’re depending on these types of infrastructures its going to be a very limiting factor for our ability to grow our businesses,” he said. Rivera’s online-based company, Kalibrr, is one of the 17 start-ups being supported by Kickstart, which provides them with funds, mentorship, incubation space, and opportunities to meet potential investors both local and abroad. Another start-up founder, Oliver Segovia of the local e-commerce site AVA, shared that the US official also asked about the availability and quality of local talents, and also financing matters such funding for their businesses. Both start-up founders stressed the need for the government to ensure that there is a level playing field for both new and old players to discourage dominant companies from preventing competition to thrive. Minette Navarrete, president of Kickstart, who moderated the meeting, said the presence of Pritzker served as a positive step in recognizing that the local start-up community has something to contribute to the economy. “I think the fact that she listened means that she is giving the Philippine start-up community the opportunity to share their perspective, seek support, and maybe learn from what works in other countries,? Navarette said. ?What she also signals is that entrepreneurs have a space in overall national development and in overall commercial terms between the US and the Philippines. If the start-up community all keep going the way we?re going, we think we can do something to make a difference and help in nation building by creating jobs and viable businesses,” she added. Pritzker arrived in Manila on Tuesday, June 3, and paid a courtesy call on Pres. Benigno S. Aquino III at the President?s Hall of Malacanang on Wednesday, along with high-level business delegation. Pritzker began the first leg of her Southeast Asian trip in Vietnam on Monday. From Manila, she is scheduled to proceed to Myanmar to meet with government officials, businessmen, and civil society leaders. Pritzker’s visit in the region was aimed at strengthening business ties between the US and the Association of Southeast Asian Nations or Asean. Other officials who joined Aquino on Tuesday’s meeting with Pritzker were Foreign Affairs secretary Albert del Rosario, Finance secretary Cesar Purisima, Energy secretary Jericho Petilla, and Philippine ambassador to the US Jose Cuisia Jr. On the US side, Pritzker was joined by US ambassador to the Philippines Philip Goldberg and assistant secretary of commerce for global markets Arun Kumar.]]>

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