STARTUP

Why Should the Philippines Care About Start-ups?

Some food for thought from Geeks on a Beach 2017

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BY Cristina Morales - 30 Aug 2017

startup philippines

PHOTO CREDIT: Getty Images

Geeks hold the future — this much was apparent at last week’s Geeks on a Beach (GOAB), a tech conference hosted by TechTalks.ph and the Philippine Department of Information and Communications Technology. GOAB gathered together 400 participants from the government and the private sector, including prominent tech entrepreneurs from around Southeast Asia and Silicon Valley.

Though interest in tech entrepreneurship is increasing in the Philippines, the country’s start-up ecosystem is still relatively small. In his presentation “State of the Nation's Startups: How Competitive can PH Startups Get?,” Jojo Flores, co-founder of the Plug and Play Technology Center, points out that the country only has around 560 start-ups while similar countries in and around the region have tens of thousands.

In a press conference at the event, Flores and his co-panelists say that the Philippines’ start-up shortage cannot be attributed to one thing, rather a combination of the state of the country’s economy, a general lack of awareness of the space, and deep-seated cultural practices.

“We’re not used to venture capitalists,” says Yobie Benjamin, founder and CEO of Token.io and ClickSWITCH.com. He explains that most Filipinos are still quite risk-averse, and would rather have a job with a stable salary than start their own company.

A precarious position

The Philippine economy is service-based. A large chunk of the country’s income comes from the BPO industry and exported labor. “Services are vulnerable,” says Flores. “When the US sneezed and they said they would take out outsourcing jobs and bring it back to their country, we all got a cold here. And that doesn’t just take away 1.2 million jobs [but also affects] other ancillary businesses [like] real estate, furniture, services, etc.”

The emergence of artificial intelligence and the technology behind Siri, Alexa, and similar voice-controlled systems could spell the end of call center jobs and those like it, adds Benjamin. Similarly, the rise of automated driving could cost the jobs of professional drivers. “There’s going to be a lot of displacement in the economy, particularly in the Philippines, if you don’t move up the food chain,” he says.

“That’s why it’s important to create IT-based and knowledge-based companies, and you get that from start-ups,” says Flores. “We’re supporting this ecosystem for the next generation.”

What now?

Though the Philippines has ways to go before it catches up with its peers, the ecosystem is developing steadily, thanks to tech entrepreneurship-focused organizations. Diane Eustaquio of Ideaspace Foundation Inc. believes that developing the entrepreneurial mindset is essential to prepare the nation for what’s to come.

“As more jobs will be lost to bots, we need entrepreneurs — people who can adjust to disruptions — and the more we have that, the better for the Philippines,” she says.

Eustaquio says that because other countries have started supporting more entrepreneurs, the Philippines has thankfully started to take notice and follow the trend. The Commission on Higher Education, for example, recently passed a ruling that all engineering schools should incorporate entrepreneurship courses into their curriculum. Other government bodies are also starting to support the ecosystem, evidenced by their presence at the conference.

“We have to go to the fundamentals,” says Dindo Marzan, managing director of Voyager Innovations, Inc. “It’s about changing the mindset of the next generation from a scarce mentality focusing on lack of capital, government support, awareness. If you actually address those, the mindset would be one of abundance, and would trickle down with this new generation leading the nation.”