Tuesday, August 01, 2006 | MANILA, PHILIPPINES
Philippine Silicon Valley
President Arroyo's State of the Nation Address last Monday talked about the need for a cyber corridor that stretches from Baguio to Davao. Her decision to increase spending for science and technology education will definitely help make it a reality. Although I assume that most of the industries in this cyber corridor will be the job-generating contact center-type BPOs, I will limit my comments to the technology SME component of the cyber corridor.
We really have to be careful about the term ICT. It can mean different things to different people these days. That is why I prefer to use the term technology SMEs or S&T SMEs to describe what my column argues for. For some people, ICT refers to both technology-based businesses and those that use technology as an enabler. A key paradigm shift we need to make, is to be able to distinguish between ICT businesses and ICT-enabled businesses.
True ICT businesses are those involved with the design, production and distribution/marketing of ICT hardware, software and services. For example, companies that design or build chips, design, code and test software, design and test electronic systems, etc. are true ICT companies. These are the Intel, Microsoft, Cisco, etc. of the world.
ICT-enabled businesses are those that use ICT to enable their core business functions. For example, talking to a customer on the phone is ICT-enabled because it uses Voice over Internet Protocol (VoIP) technology to enable those calls. Even higher value-added BPO activities are ICT-enabled. Even if an ICT company abroad like Dell operates here, if the business unit that they have set up uses ICT instead of builds it, then it is still an ICT-enabled business.
Let me be clear. I am not knocking any sector to favor another. I am simply making definitions so that we do not lump these two together under the term ICT.
Politicians, policy makers, business executives sometimes make this mistake. Understanding this difference is key to the success of the cyber corridor.
For example, teaching English will not necessarily help make the ICT businesses better just as teaching more science and technology courses will not help make the ICT-enabled businesses better (unless these are outsourced engineering/consulting services).
I suspect that the inspiration for the cyber corridor came from the Malaysia Multimedia Super Corridor (MSC). MSC is a 12 km by 50 km zone in Kuala Lumpur that is the cornerstone of Mahathir's Vision 2020 for Malaysia.
Take note of the geographic size of the corridor vis-a-vis our own proposed cyber corridor.
If we are referring to a cyber corridor composed mostly of BPO/ICT-enabled businesses spread across Baguio, Manila, Cebu, Dumaguete, Iloilo, Davao, etc., then we are well on our way. BPO/ICT-enabled businesses are fantastic job generators, and these types of businesses should definitely proliferate.
But if somewhere in that cyber corridor concept is that of advocating the growth of higher value-added product and service businesses, then we must handle this initiative separately and not lump it in with other initiatives. Businesses like chip design, chip manufacturing, software development, etc. have their own dynamics in terms of their cultural, educational, financial, and other ecosystem considerations. We have to stop doing these trade shows where food franchise SMEs sit side by side with technology SMEs (unless these companies are selling to this sector), and similar "lump them all together" type activities.
One thing we could do, as an extension of the One Town, One Product initiative of the DTI, is to extend this to technology SME's. I have some rough ideas for where we can hatch specialist areas for particular technologies. Of course, I am not limiting these cities to these technologies alone, but here is where I feel they are strong:
Baguio: chip equipment industry (because of Texas Instruments Baguio)
San Fernando: software and other technologies for the logistics industry
Diliman/Loyola Heights: chip design; embedded software; other sophisticated software; content
Makati/Fort: software for BPO companies; content
Los Baños: biotechnology; medical electronics; software for biotech industry
Alabang/Santa Rosa: test equipment for the chip industry; auto parts; contract electronics manufacturing; software for the electronics and semiconductor industry; content
Cebu: IPv6 Internet; embedded software; content
Dumaguete and Iloilo: software for call centers
Davao: content; software for large plantation-based agribusinesses.
What will eventually make these plans real is if the national/local governments beef up the capability and capacity of their schools in these areas to be able to study, research and eventually build these products and services in their areas.
No comments:
Post a Comment