TECH4GOOD
Digitalization is fast becoming a keystone of economic growth in the modern world. And the Philippines today is among the leading countries in the region that is riding the crest of this transformation and taking advantage of the opportunities brought by the shift to a digital economy. It is driving digital adoption and creating a lot of opportunities unseen before. But how do we ensure that the growth is inclusive? How do we sustain its acceleration?
The latest e-Conomy SEA Report says that, next to Vietnam, the Philippines has achieved the fastest digital economy growth rate in Southeast Asia. It is expected to reach $35 billion by 2025 and possibly hit between $100 billion to $150 billion by 2030. The same report says the growth is driven by e-commerce, food delivery, and video-on-demand. All three digital activities have shown a very high adoption rate among urban digital users. I would like to add to the three the telecommunications sector, the booming ICT-enabled services sector, and the successful penetration of digital payment platforms in the country.
In a report released late last year, the Philippine Statistics Authority says that the Philippine digital economy in 2021 amounted to ₱1.87 trillion, contributing 9.6 percent to the country’s economy. This represents an increase of 7.8 percent from the ₱1.73 trillion recorded in 2020.
Another study conducted by ACCESS Partnership highlights that, if fully leveraged by 2030, the country’s digitalization could create up to $101.3 billion in economic value equivalent to about 27 percent of the country’s GDP in 2020. To fully capture this, the study prescribes three areas of action: enhancing digital skills training, accelerating digital adoption and innovation, and promoting digital trade.
A paper released by the Congressional Policy and Budget Research Department, however, brings to light the reality that the digital economy landscape is not inclusive because of infrastructure insufficiency that is very pronounced in rural areas, low levels of digital literacy, and the relatively high cost of connectivity. But there is no denying that a digitalized national economy can help increase efficiency, innovation, and productivity, as well as create new jobs and opportunities for businesses.
A new digital economy advocacy group, the Alliance of Tech Innovators for the Nation or ATIN, will be publicly launched tomorrow. ATIN, of which this author is the lead convenor, is a loose multi-stakeholder coalition of Philippine tech industry players and digital innovation advocates that seeks to harness the power of technology to promote the growth of an inclusive digital economy in the country. It intends to establish itself as a trusted resource for the country’s legislative and regulatory bodies and help create an enabling environment to allow the full utilization of digital innovations to improve the lives of every Filipino.
As experienced in other countries, policymakers and regulators are finding it challenging to navigate the intricacies of new digital business models that are now fast-changing the lifestyles of citizens and disrupting traditional institutions. Examples would be the shift from just providing services to creating customer experiences, the rise of industry ecosystems, and digital platforms. The digital economy requires focused attention, tailored strategies, and policymaking efforts. This is the space where ATIN intends to work and contribute its expertise on.
Accelerating the growth of a digital economy will depend on how key enablers would play out. Among them, digital infrastructure is the most critical as it is the platform by which a digital economy operates. By investing in it, businesses and citizens can have access to the digital tools and resources they need to succeed. This can lead to increased efficiency, productivity, and innovation, as well as the creation of new jobs and opportunities.
Digital literacy is essential, as well. It will help bridge the digital divide, and ensure that everyone has equal access to digital technologies. Innovation and entrepreneurship in the digital space can be encouraged by supporting the creation of digital startups that will lead to new products and services that can help drive economic growth.
The use of data analytics is essential for businesses and governments to make informed business and policy decisions leading to more effective policies and regulations. Developing a supportive regulatory environment including well-crafted laws that promote innovation and the protection of intellectual assets, and privacy would encourage the use of digital technologies. And for innovations to happen in the digital space, the country should have an ecosystem that fosters a productive collaboration between businesses and academia.
Finally, the government can encourage cross-border digital trade by reducing barriers to entry, simplifying customs processes, and promoting global standards for digital technologies. This can lead to a broader market space for our businesses, especially the MSMEs.
In this digital age, we all need to ensure that the country is globally competitive and that every Filipino benefits from the digitalization of the national economy.
(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. Email: [email protected])