The Perfect Storm and Opportunities for the

Philippines in ICT and BPO

ICT Conference & Preparatory Workshop for Region 8 August 7, 2012 Hotel Alejandro, Tacloban, Leyte Alejandro P. Melchor III Deputy Executive Director for ICT Industry Development Information & Communications Technology Office Department of Science & Technology

Philippine IT-BPO Industry:

The country’s premier sunrise industry

Source: Business Processing Association of the Philippines (BPAP)

101

163

236

300

372

442

525

643

0

100

200

300

400

500

600

700

2004 2005 2006 2007 2008 2009 2010 2011

$1.3

$2.2

$3.3

$4.9

$6.1

$7.1

$8.9

$11.0

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

2004 2005 2006 2007 2008 2009 2010 2011

Total Employees (000s)‏ Annual Revenue (US$B)‏

Philippines now #2 after India in worldwide IT-BPO, and gaining

SSource: Aon Hewitt, 2011

Philippines now the preferred IT-BPO destination. Market leaders on hypergrowth mode.

ASEAN, China and India (ACI Region) now viewed as the world’s premier growth region

By 2030: • ASEAN, China, India Region (ACI) combined GDP could quadruple and exceed that of the US and Europe combined • ASEAN, China, India Region’s share of world investment projected to be 40% of global total

Source: ADB: ASEAN, the PRC and India: The Great Transformation? Where will the investment into ASEAN go?

http://www.adb.org/features/fast-facts-asean-prc-and-india-great-transformation?ref=annual-meeting/2012/features

Universal consensus on ICT as economic growth engine

Europeans view ICT as EU’s growth engine…

http://test-naukawpolsce.pap.pl/en/news/news,373313,ict---eus-growth-engine.html

Koreans view ICT as key engine for development… ASEAN views ICT as its growth

engine…

Africa views ICT as growth engine…

GET READY FOR THE NEXT WAVE OF JOB CREATION AND INVESTMENT!

ASEAN’s Economic Integration and ICT Master Plan 2015 will funnel investments to ICT

• ICT as an engine of growth in the ASEAN countries. • Recognition for ASEAN as a global ICT hub • Enhanced quality of life for people of ASEAN • Contribution towards ASEAN integration

Key Outcomes

http://www.aseansec.org/documents/ASEAN%20ICT%20Masterplan%202015.pdf

Universal consensus on the Philippines as a star performer and tiger economy

Standard & Poor’s upgraded PH credit rating in July, citing the improved debt rating and record high foreign currency reserves. BREAKOUT NATIONS: The new “BRICs” in Asia are Thailand, Indonesia, Philippines (TIP). GOLDMAN SACHS: PH one of the “Next 11”—the next BRICs, who may rival the G7 in economic power.

Investment firm Kohlberg Kravis Roberts & Co views Vietnam, Indonesia, Philippines (VIP) as best ASEAN countries to invest in. BLOOMBERG on Jan. 20, 2012 reported that PH is a leading Asian tiger economy, in the same league as China. The Grant Thornton International Business Review survey revealed that Filipino business executives are the 2nd most optimistic in the world at 90%, after Peru with 96%.

WE‏ARE‏IN‏THE‏EYE‏OF‏A‏PERFECT‏STORM… A once-in-several-decades window of opportunity to

dramatically accelerate economic growth, job

creation and investment.

…to ensure the Philippines emerges a big winner.

…to dramatically increase market share in IT-BPO.

…to harness ICT as an engine of growth and

investment magnet.

…to accelerate countryside development.

There has never been a better opportunity to

develop the entire Philippines!

GOALS iPPP PROGRAMS

i-TalentDev.PH

Stepping-Up the Value Chain

Next Wave Cities/ Smarter Countryside

ICT Marketing & Research

i-Creative.PH

PROJECTS

1- Research & Road Mapping

3- Organizational Development & Capability

Building

4- Advocacy and Marketing

5- IT-preneurship & Technology Business

Incubators

6- Policy Framework , Business Environment &

Investment Incentives

Domestic ICT Industry

2- Training & Education

ICT: a $50B Industry by 2016:

• IT-BPO: $25-27B • All other ICT: $23-25B

Global leadership in multiple high growth

segments

Countryside development through ICT & BPO

Increase size & employability of talent pool

Develop knowledge workers with

21st Century Skills

ECOSYSTEMS PROJECTS

STRATEGIES

INDUSTRY CAPABILITY

The Department of Science & Technology (DOST) - Information and Communications Technology Office (ICTO) and other attached agencies

Sustain global leadership

in voice/contact center

Global leadership (preferred

dest. & top 1-3 geography) in:

• Healthcare Outsourcing

• HR Outsourcing

• Finance, Accounting &

Insurance Outsourcing

• Creative Process Outsourcing

Double market share in:

• IT Outsourcing (ITO)

• Engineering Services

Outsourcing (ESO)

• Multilingual BPO

MARKETING

TALENT & WORKFORCE MOBILIZATION

RESEARCH & INFORMATION

International Contact Center Conference and Exhibition 2012

HIM Congress 2012 CEO Meetings Enablement Seminar Series Industry Workshops (Product

Development, Quality)

Trade missions (CommunicAsia, AHIMA) International events and hosting (Shared

Services Exchange, Asia Pacific Contact Centre Association Leaders Meeting 2012)

Collaterals development Roadshow in the Next Wave Cities

Update Industry Road Map 2016 Prelim study on Corporate Services sectors

Workshops for CC IT, HR, Fin, Ops Faculty development (ELITES) T3 for Medical Coding and Billing

Next Wave Cities Program will ensure this growth spreads to the entire Philippines

Next Wave Cities Program Components

1- Research & Road Mapping

2- Talent Development

3- Organizational Development & Capability Building

4- Marketing

5- IT-preneurship & Technology Business Incubators

6- Business Environment & Smarter Philippines

7- Infrastructure & Smarter Cities

Next

Cities TM Wave

Next Wave Cities IT-BPO Scorecard

• College and high school graduates

• Professionals

• Schools and degree programs

• Airports

• Roads

• Utilities (telecom, power, water)‏

• Real estate

• Rental

• Regulatory fees and taxes

• Median pay

• Utility costs

• PEZA-approved facilities

• ICT Council

• Real estate developers

Talent

Infrastructure

Cost

Business Environment

Next Wave Cities Road Map: Talent Deep Dive & Location Assessment

Tax • Vat Reimbursement • Income Tax Rebate • Corporate Business Tax Rebate Occupancy • Rent • Fully furnished office and datacenter facility • Completing and maintaining international standard facilities • Repair and upkeep of facilities Network Cost • IT Bandwith • Network/Telephone/Printer Set-up

Utilities • No cost or subsidy for utility services Education • Overseas training subsidy • New hire training subsidy • Continuous education subsidy Recruitment • Domestic campus recruiting subsidy • Head hunter fee reimbursement •Recovery fund for certain percentage of interns Retention • Lump sum per employee

INCENTIVES ARE A GAME-CHANGER Aggressive incentives—led by LGUs—can attract locators to NWCs

iTalentDev.PH Resources posted on Facebook

Posted on Facebook July 3 Essential 21st Century Skills Posted Aug. 5

Coming soon!

Innov8 Business Process Management Online Simulation Game prepares students to manage IT-BPO enterprises

ACTION: Convince your local college to download the free academic edition of Innov8 and use it in several class sessions to train students to manage an IT-BPO firm. http://www-01.ibm.com/software/solutions/soa/innov8/index.html ACTION: Watch the YouTube video on how USC Marshall School of Business uses Innov8 to teach students IT-BPO operations. http://www.youtube.com/watch?v=WymKQvznzF8

I. The First Essential 21st Century Skill:

CRITICAL THINKING AND PROBLEM SOLVING

“Critical thinking is

a desire to seek,

patience to doubt,

fondness to

meditate, slowness to assert,

readiness to consider,

carefulness to dispose and

set in order; and hatred for

every kind of imposture.”

- Sir Francis Bacon

Castle Strecno, in the Carpathian Mountains, North Slovakia

Harvard uses a computer gaming simulation to teach scientific inquiry and 21st century skills

Harvard’s River City Project http://muve.gse.harvard.edu/rivercityproject/

How about a science grant to local game developers to create a Philippine setting 19th century historical simulation to teach scientific inquiry in Philippine Science High Schools?

Action: log onto website of

the Partnership for 21st Century Skills http://www.p21.org/

Smarter Cities are booming in Asia… and are investment magnets

India plans to spend $130 billion building Smarter Cities

As many as 18 Chinese cities have announced Smarter Cities plans

Download the Smart City Infographic: http://farmwars.info/wp-content/uploads/2011/12/anatomy-of-a-smart-city-final.pdf

ACTION: Download the 1-page infographic on the Anatomy of a Smarter City

The “Smart City” as a brand is an investment magnet ACTION: Consider developing your city as a Smarter City

http://www.smartplanet.com/blog/smart-takes/-8216smart-city-tech-investment-to-total-108-billion-by-2020/19541

In response to Singapore’s iN2015 Masterplan, tech giant IBM announced a $38M investment in an Asia Pacific cloud computing data center

ACTION: Study Internet Resources on Smarter Cities

CISCO: SMART + CONNECTED COMMUNITIES http://www.cisco.com/web/strategy/smart_connected_communities.html

ACCENTURE: INTELLIGENT CITY http://www.accenture.com/us-en/pages/insight-building-managing-intelligent-city.aspx

IBM: SMARTER CITIES http://www-03.ibm.com/innovation/us/thesmartercity/index_flash.html

Smarter Philippines--a DOST-wide project--by transforming systems of governance, education, health, etc. nationwide, will create a vibrant domestic knowledge economy, accelerate technopreneurship, and boost domestic knowledge industries.

1- iGovPhil -- i-Business Permit Lic. System -- Gov’t e-Services Portal -- e-LGU -- Community e-Centers -- National Information Infra -- CIO Forum & gCIO Training

2- i-TalentDev.PH -- Knowledge Workers with 21st Century Skills -- Industry-driven curriculum -- Computer Gaming -- Learning Technologies -- Global Collaboration

3- Smarter Industry -- Global Leadership in IT-BPO -- $50 B ICT Industry -- i-CreativePhil -- Smarter Agribusiness -- Makinariya at Teknolohiya para sa Ekonomiya

4- Smarter Transportation and Green Technology -- Eco-Jeep (DOST NCRP) -- UP Monorail (DOST MIRD)

5- Smarter Healthcare (PCHRD) & Nutrition (FNRI) -- Phil Health Research Registry -- Public health surveillance & health intelligence systems -- Sulong Pinoy anti-malnutrition -- Nutritious brown rice

6- Smarter Disaster Mitigation -- Project Noah (DOST-PAGASA) -- Earthquake & Tsunami Early Warning (DOST- PHIVOLCS) -- 3D LIDAR Mapping (DOST & UP Geodetic Engineering)

7- Smarter Cities -- Digital Ecosystem -- Smarter Local Government Svcs -- Smarter Buildings -- Smarter Environment -- Smarter Energy & Utilities -- Smarter Public Safety

“Smarter Philippines” is the brainchild of Science & Technology Secretary Mario G. Montejo

Sec. Montejo is an inventor, a trained engineer, and a successful businessman who knows how to commercialize scientific inventions. A member of the Top 100 Graduates of the University of the Philippines College of Engineering, his vision is to create a vibrant domestic knowledge economy in which Filipino technology companies and Filipino technopreneurs deliver indigenous technologies to solve the problems that beset ordinary Filipinos.

iGov, the central program under “Smarter Government,” is the brainchild of the DOST Information & Communications Technology Office’s Executive Director Louis Casambre. His focus is all-out support for President Aquino’s promise of a transparent, equitable and effective government service, through ICT.

Department of Science and Technology- Information and Communications Technology Office

Thank You

Please e-mail feedback & suggestions to improve Our programs to budmelchor@yahoo.com

Knowledge creation, sharing of free resources and continual learning--Resources posted on Facebook

• Essential 21st Century Skills • The i-CreativePhil Program • The Perfect Storm and the Next Wave Cities Program •Seeding the Digital Ecosystem to Fuel the Philippine Renaissance •Computer Gaming for Leadership Development • The DOST ICT Office’s Initiatives for the ICT & BPO Industry • The Next Wave Cities Program: Get Ready for the Next Wave of Growth and Investment • Seven Global Shifts: Trends and Opportunities in ICT & BPO