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EIU STUDY SAYS RP ranks 10th in IT competitiveness

Posted on: February 24, 2009

http://newsinfo.inquirer.net/breakingnews/infotech/view/20081016-166719/RP-ranks-10th-in-IT-competitiveness

By Anna Valmero
INQUIRER.net
First Posted 16:43:00 10/16/2008

Filed Under: Technology (general), Market research, Software

MANILA, Philippines — The Philippines ranked as the 10th most competitive IT industry environment in the Asia-Pacific, a recent study showed.

Based on the 2008 IT Industry Competitive Index, the Philippines moved up one rank from last year but still remains 47th worldwide, a study by the Economist Intelligene Unit commissioned by Business Software Alliance (BSA).

Now on its second year, the study shows how IT competitiveness can drive growth in economies, Jeffrey Hardee, vice president and regional director of BSA Asia-Pacific, said.

Understanding these key IT competitiveness indicators can help the government draft a roadmap for strengthening its global economic position, he added.

The study used six categories with 25 indicators to measure a country’s IT competitiveness.

The study found that the Philippines performed strongest in human capital, followed by providing a favorable business environment, support for IT industry environment and legal environment. However, it remains lagging in two: IT and telecommunications infrastructures as well as low spending in research and development (R&D).

“Of the six, the Philippines is strong in human capital. It has a large and rapidly growing young population who are well-educated in the tertiary level and has good English-speaking skills,” said Hardee.

A huge proportion of this young population is in the sciences, which is dubbed to provide good employment base for the country’s future IT sector.

The Philippines ranks fourth in Asia-Pacific today in terms of having a huge number of IT workers with respect to the overall working population.

The country however needs to beef up its efforts in encouraging R&D activity, a good IP framework and increasing PC ownership per capita for it to better its environment for global IT competitiveness.

In R&D, the Philippines dropped 10 places from last year now placing 62nd in the global list. According to the study, the Philippines has very few patents registered each year. The government allots only $1.2 for every 100 person in R&D. The figure is not at par with neighbor Asian countries—China with $20, India with $15.6, Thailand with $7 and Malaysia with $6.7 for R&D expenditure per 100 individuals.

This in turn reflects the low number of patents registered in the country, which Hardee said is a lost for the country. He stressed the need to focus on this area because local individuals and companies often have produced or already have their own IP but failed to register it.

“It is also important to realize the Philippines can produce IP. That’s where the higher value-added is going to come in,” said Hardee. Once IP is produced and registered, the person or company gains copyright protection and over time, get profit from it through license fees. If done, this will help the country move up the IT value chain and expand its offering from back-end services such as outsourcing.

Key to achieving this is legal environment for IP rights as well as increased awareness in the benefits of protecting IP portfolios, said Hardee. At present, there are pending bills in the Senate which if approved will implement the WIPO Treaty and help increase domestic IP registration, he said.

The deployment of a good IP framework will also work as platform for cyber security environment. According to Atty. Bienvinido Marquez, Philippine consultant for BSA, campaigns are conducted to make companies aware on proper software usage and RA 8293: The Philippine IP Code to help curb software piracy. At present, the rate of software piracy in the country is at 69 percent, down from over 90 percent in 1995.

“The IT industry is still at an infancy stage, there is so much going on and the Internet can open up a lot of opportunities for collaboration among industries and countries,” said Hardee.

He said that if the Philippine government and the IT industry can address their recommendations in the study, the Philippines will have the ingredients to succeed in the global IT arena like its neighbor Taiwan. Taiwan was the biggest mover this year, ranking second in the global IT Competitiveness list, up from sixth place last year.

In 2007, the IT sector represented $1.1 trillion in economic activity and in terms of employment, supported 1.1 million in the IT businesses. The industry amounts to $230 billion in Asia-Pacific.

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