By Edd K. Usman
The poor performance of the Philippines in the latest rankings of top BPO cities by London-based consulting firm Tholons should serve as a wake-up call for the country.
This is according to local stakeholders who noted the two-step demotion of Metro Manila from No. 2 to No. 4 among top outsourcing cities and the exclusion of four other Philippine cities as a jolt to the country?s multi-billion BPO industry.
While it may not have been drastic, the stakeholders said the slide showed the Philippines was not fully prepared for Tholons’ three new parameters in its annual survey: innovation, startup ecosystem, and digital transformation.
Aside from Metro Manila, Cebu also went down from 8th to 12th, Davao from 69th to 85th, Bacolod from 85th to 97th, and Sta. Rosa from 82nd to 100th.
“I think it is a wake-up call for us because there are new components in the scorecard,? said Jonathan De Luzuriaga, CEO of Spring Valley and president of the Philippine Software Industry Association (PSIA).
De Luzuriaga made the comment on July 4 in Makati City during the launch of the 5th “Geeks on a Beach (GOAB)” international conference and startup competition on August 24-25 to be held in Puerto Princesa City, Palawan.
He, however, said Metro Manila is still in a better position than other cities that were also measured in the Tholons study. “I am not particularly scared with that because we are still there. There were so many cities that have been measured by that index but still Metro Manila is there,” De Luzuriaga pointed out.
For his part, Department of Information and Communications Technology (DICT) undersecretary Monchito Ibrahim said the results of the survey should push the country towards digital transformation and make innovation a prime agenda among the major cities.
Like De Luzuriaga, Ibrahim said Metro Manila’s drop does not necessarily mean that “we are not moving as fast as we can.” “It is just that Tholons added digital transformation and innovation parameters in their assessment of the cities. Unfortunately, we don?t have much startups here in Metro Manila,” noted Ibrahim.
He also batted for the refocusing of efforts toward developing the country’s startup ecosystem in Metro Manila and various across the Philippines. “That is what don’t have,” he said.
De Luzuriaga conceded the outsourcing industry may have become complacent. “We’ve been producing very good numbers for the pass decade. In 2016, we had $22.9 billion in revenues,? he recalled.
There lies the problem, he pointed out, as the industry tended to relax because it was performing well. “Now the world is changing. We’ve always been talking about moving up the value chain, but we’ve never been there,” said De Luzuriaga. “So, hopefully this new index will enable us to really focus.”
The PSIA chief also did not find the government was remiss in its support for the industry. “Government support is in fact a little bit ahead. First, it is good that we created our own Department of ICT. Second, the Sling Shot initiative of the DTI (Department of Trade and Industry) was good for the startup ecosystem,” De Luzuriaga said.
He acknowledged that local startup events like the annual ?Geeks on a Beach? confab are instrumental in making the startup community more vibrant.
“Before, we were groping in the dark in terms of how to push this forward. Now it seems we are getting a better idea in terms of the way to grow technology and innovation in the nation,” he added.
“One thing is for certain, we are now waking up to the reality that we need to be innovative and we need to put the inclusion aspect into this in order for this initiative to move forward,” De Luzuriaga said.
Tina Amper, founder of Techtalks.ph, which organizes Geeks on a Beach, said the country should not be hesitant to move the value chain and not to worry about losing call centers.
“Call centers will still be there. Big businesses will look at the whole digital ecosystem. This means the physical and digital infrastructure, the legislative framework, the manpower, and others,” Amper pointed out.
Unlike Silicon Valley, Amper said making it big in the local startup community is not easy, given a gauntlet of hurdles. “There is 95-percent failure rate. There is a high-risk, high-gain situation. For those who win, there is 1,000 times growth,” she said.
Amper cited Instagram as example, recalling the popular photograph-sharing startup whose founders sold it to Facebook for $1 billion. “So, you say, me too! I will earn a billion dollar. It does not work that way because we are not in Silicon Valley. We don’t have a vibrant ecosystem,” she stressed.
Here in the Philippines, there’s no money for startups, said Amper. “What is holding us back is that not many people are doing it. Even if you are bright, you still don’t get funded.”
Another factor that is holding back the startup community is that local developers are ?not brave? enough. “If you?re technically talented, it is not a guarantee of success because you still need business skills. Where do you get that? If you have it in you, lucky you. But not everybody does,” she said.