Digital innovations, sustainability, and Philippine super cities


Monchito Ibrahim

The Global Innovation Sustainability Index 2023 was recently announced by Tholons. It is so refreshing to see that the Philippines ranked 15th among the Top 50 Global Digital Nations in the report. In fact, the country is bunched with Sweden and South Korea as among the new leaders that have built a strong digital foundation for growth.

The same report also included the super cities that comprise the Global Top 200 Global Cities. Among the countries highlighted in the report, the Philippines ranked 6th in terms of having the greatest number of cities on the list with nine.

The annual report, which used to be called the Top 100 Outsourcing Cities in the World, was started in the late 2000s and is the benchmark used by most BPO companies when they do location studies. When the report was started, there were only four criteria used to assess the readiness of cities worldwide to host BPO operations. Cities then were measured according to their business environment, infrastructure, talent availability, and cost.

From just three Philippine cities ranked among the Top 100 Outsourcing Cities in the World when the report was first published, the number grew to nine in 2016 with the Philippines ranked second to India as the best outsourcing destination globally and Metro Manila ranking among the top 10 cities. The country’s high ranking reflects its global leadership position in the BPO sector. This can be attributed mainly to the strong collaboration of the industry, the government, and the local government units in the implementation of the Next Wave Cities Program. The initiative was meant to get more cities in the country ready for BPO locators.

In 2017, to everyone’s surprise, Tholons moved the cheese by adding innovation as one of the criteria that resulted in the Philippines dropping in the ranking and being left with just two cities among the top 100. The 2017 version of the report highlighted a weakness among Philippine cities: The lack of a nurturing innovation ecosystem. The Next Wave Cities Program was recalibrated the following year to also give focus on the development of the cities into innovation hubs. The years following the adjustments did not immediately show promising results. The cities were not ready and understandably so because innovation ecosystems are not usually built overnight. The program was even rebranded to Digital Cities to reflect the changes in the expected program outcomes.

This year, Tholons added two new criteria, Diversity, Equity, and Inclusion or DEI and Sustainability reflecting the current focus on these two areas. Digital Innovation still remains a critical element in today’s business, especially in emerging technologies such as cloud, AI, big data, and analytics that will sustain even in the coming decades. There is also the re-imagining of the consumer experience, and digital competitiveness that will have to be considered by companies as a way forward when they consider possible new locations.

The future of the Philippine IT and the IT-enabled services industry looks very bright. The recently announced Philippine IT-BPM Roadmap 2028 highlights very optimistic projections. From the 2021 employment figure of 1.4 million direct employees, it is forecasted to add 1.1 million workers by 2028.

Revenues on the other hand are projected to hit $59 billion by the same year from the 2021 level of 29.5 in 2021. It is therefore imperative that the Philippines develop more globally ranked cities to attract more investments into the country and make innovation a key driver of its economy as it allows cities to improve their productivity, efficiency, and standard of living making them more globally competitive.
Bringing in the element of DEI ensures that equal opportunities for advancement and participation will always be in the mindset of our leaders in elevating the impact of diversity in the economy. The Philippines scored relatively high in this parameter. The sustainability factor, on the other hand, will show investors that city leaders are focused on growth without sacrificing the needs of future generations.

Business enterprises today are so conscious about their transparency and level of accountability as far as the impact of their operations on society is concerned as it matters a lot in building goodwill and attracting talent. The Philippines had its lowest score in this criterion.

Countries with nurturing innovation ecosystems, great places to do business, safe and high standards of living, sustainability, and maturity in the application of technology at scale will be able to lead the future.

To foster an environment that encourages innovation, cities can invest in R&D, and promote open innovation and entrepreneurship. By taking these steps, they will become more competitive and seen as ready to take on investing locators.

My congratulations to IBPAP, DICT and its ICT Industry Development Bureau, the National ICT Confederation of the Philippines, the city clusters of Metro Manila, Metro Cebu, Metro Clark (Angeles and Mabalacat), Bacolod, Davao, Baguio, Metro Cavite, Iloilo, and Sta. Rosa.

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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 of the UP System Information Technology Foundation.