TECH4GOOD
Monchito Ibrahim
In the last three decades, we have seen game-changing technology breakthroughs happening one after the other. The internet has ushered us into the Third Industrial Revolution (IR) and continues to be the basic platform for almost everything that we do today as we enter the Fourth IR. It did not start as a dramatic innovation, however. It was the development of web browsers like Netscape and Mosaic that made it very exciting. It was then that the internet started to disrupt traditional life and business models.
We still remember the vision of Microsoft’s Bill Gates to put a computer in every home, disrupting the usual concept of mainframe computing. At that time, most people thought of computers as huge behemoths that would usually occupy a massive amount of space in an office building. But Gates’ vision too was eventually disrupted by Steve Job’s iPhone which basically puts a powerful computer in everyone’s pocket.
Initially, most of these technological innovations were coming from North America where they have been able to develop the right innovation ecosystem ahead of other regions. In the last 15 years, however, we have seen how Southeast Asia is fast catching up with the world’s leading innovation hubs by producing its own decacorns and unicorns. The region today has established itself as a hotbed of disruptive digital innovations. Starting with only three unicorns in 2014 namely Garena (now SEA) and Razer of Singapore and VNG of Vietnam, it now has at least 23 unicorns among them three decacorns. Of these, 10 are from Singapore, nine are from Indonesia, and two are from Vietnam. Revolution Precrafted is the only unicorn from the Philippines that made it to the Seasia list. Although not on the list, I understand GCash is now a certified unicorn as well. The businesses listed range from e-commerce platforms, logistics services, fintech, and a couple of analytics services companies.
In the innovation space today, the number of tech unicorns is usually seen as an indicator of the state of a country’s innovation ecosystem. In the Global Innovation Index 2022 ranking, the Philippines ranked fifth, next to Vietnam, among the ASEAN member states. There is much room for improvement and we see the recent signing of two laws as a positive development toward making the country a significant player in the innovation universe.
RA 11337 or the Philippine Innovative Startup Act aims to strengthen, promote, and develop an innovative and entrepreneurial ecosystem and culture in the country. DOST, DTI, and DICT are the three agencies tasked to lead the implementation of this new law. The law provides for funding facilities that should help address one of the major challenges of digital startups. On the other hand, RA 11293, or the Philippine Innovation Act aims to scale up programs to promote innovation and the internationalization of MSMEs in order to leverage the opportunities brought by the borderless market.
Digital startups are often at the forefront of innovation and are key drivers of tech progress and competitiveness. By leveraging technology, they create products and services that disrupt traditional business models and drive economic growth. For example, companies like Grab and Lalamove have transformed the transportation sector by creating new business models that make it easier for people to access their services. Lazada uses technology, not just to improve the efficiency of its supply chain and logistics, but also to provide MSMEs with an easy way to set up their businesses and for consumers to buy. These companies have also created new opportunities for entrepreneurs and small businesses, which can lead to economic growth and job creation.
We need to encourage more people to look at founding a digital startup as a worthwhile endeavor. Aside from providing access to funding, there are other key steps that the government can take to encourage innovation. Among them are creating a business-friendly environment that is conducive to innovation and investing in education and training to ensure that individuals have the skills and knowledge they need to start and grow digital businesses.
Another important step organizations can take is to encourage collaboration and networking. By fostering partnerships between companies, research institutions, and government agencies, the ecosystem can create an open environment where ideas and technologies can be shared and developed. This can be done by creating industry clusters, establishing research partnerships, and encouraging the formation of networks and consortia.
Digital startups are a key driver of innovation and economic growth which, in turn, results in better country competitiveness. While digital startups create new products and services that disrupt traditional life and business models, innovation allows our country to improve its productivity, efficiency, and standard of living. To foster an ecosystem that encourages innovation, we need to have increased investments in R&D, education and training, create a business-friendly environment, encourage collaboration and networking, and promote open innovation. By taking these steps, the Philippines can create a thriving innovation ecosystem that will help bring prosperity to its citizens.
(The author is the lead convenor of the Alliance for Technology Innovators for the Nation (ATIN), vice president of the Analytics Association of the Philippines, and vice president, UP System Information Technology Foundation)