Local talents are spearheading the Philippine SME boom
Blame it on the long years of American colonization and still-pervading love for anything Western. The Philippines, which is more American than Spanish as it is expected to be or more Filipino that it should be, has become an attractive place for investors and entrepreneurs who aimed to be global.
It as simple as this: almost every educated worker here can speak the universal business language, which is English, with a passable American—or sometimes European—twang, which is very hard to get from other countries that offer relatively lower labor costs.
Still, more than the knack for language that has been entrenched in the local consciousness for ages, the country is also replete with talents that have been essential to its recent economic growth. Apart from Native American speaking-call center agents, the country is also home to graphic designers, animators, engineers, programmers, IT experts, human resource experts, even incubators—positions and entities essential to any business undertaking today.
“These technology start-ups will have no problem because we have a large pool of talented and skilled Filipinos in the field of information technology (IT), design, and programming and engineering, which they can tap anytime,” said Senator Bam Aquino, chairman of the Senate Committee on Trade, Commerce and Entrepreneurship.
Aquino also believed that by simply looking at the local talent pool one would realize that building its own Silicon Valley is not at all farfetched.
“Technology start-ups can contribute to solving the country’s unemployment problem as it can provide high-value jobs for thousands of Filipino IT experts, artists and developers. Being at par with the world’s best, our IT workers can be a valuable asset for startups as they try to create a niche in the international and local markets,” he added, as he announced that he filed Senate Bill No. 2217 that aims to provide two-year tax exemptions for local startups.
The country, for a change, is now benefitting from its own talents. Unlike before when a large fraction of the white collar labor force were going abroad, settling for blue-collar positions with better rates.
It was in 2014 when the Philippine startup scene first gained momentum. Manila-based incubator IdeaSpace revealed that it had 1,320 submitted entries from startups. There was also a boost in seed funding, as it recorded $17 billion in aggregate company donors’ revenues. Kickstart Ventures, another venture capital firm, said that it had invested close to $2 million in funds with a funding collection of $8.5 million, in 2014.
That year, small and medium-sized enterprises (SME) accounted for 99.6 percent of total registered enterprises in the country. The entire business sector in the country is indeed dominated by SMEs, as 816,759 of 820,255 were small enterprises, and only 3,496 were giant companies. The government says that the trend continues this year, emphasizing that the development of SME will be essential in sustaining the long-term economic growth in the country.
“Overall, despite the cut in our growth forecast, we expect the Philippines to continue to outperform the other ASEAN economies, with the country set to be the fastest growing economy among the major ASEAN economies for a third consecutive year in 2015,” said Barclays regional economist Rahul Bajoria to Agence France-Press via email, as reported by Rappler.
Moreover, the country has enticed many small and startup business outside the country to set up a local presence and experience the local talent firsthand. Born2Invest, a curation app focused on business and finance news, is one of them.
“It is a no-brainer, actually. I have been to many Asian countries before, set up satellite offices and work with their people, but nothing beats the Philippines when it comes to talent pool—from writers to tech experts to HR personnel, supervisors, name it. Of course, apart from their impeccable English, one thing you would not get from [the] others is their dedication to their job,” CEO Dom Einhorn said.
He admitted that he already thought of the Philippines when he decided to hire real human curators for Born2Invest. The current success of the company, he said, will not be impossible without the help of his Manila-based team comprising journalists and designers. “In no time we already one of the most downloaded business app on Google. Thanks to these very talented Filipinos,” he said.
But local entrepreneurs should not be complacent, warned Scott Stavretis, CEO of global business process outsourcing (BPO) leader Acquire, whose subsidiary SHORE Solutions, Inc. is a key sponsor of this year’s Asia CEO Awards. The growing startup sector must be supported with continuous development and innovation as the global business landscape is fast-changing.
If you’re not innovating, then you’re not growing in a lot of regards. From my perspective, today it’s really all about growth—and in business, if you’re not growing and you’re just staying still, then it means you’re going backwards,” Stavretis said.