Greeting. Brief introduction of yourself. Brief introduction of IBM. It is my privilege to address all of you today, future IT leaders and practitioners. Let me congratulate you for choosing a very dynamic, promising and exciting field. Having been in this industry for close to 2 decades, I have seen, experienced, and helped deliver business and technological innovations that have vastly changed the way the world works today. You should know that you are at a very exciting period of hyper-growth and dramatic paradigm shifts in the field of information technology. This is what I’ll be sharing with you today. What are these changes? How will these changes affect business? What are the opportunities and challenges for our country? More importantly, what opportunities and challenges lie ahead for YOU? What should we as a country, an industry, an academic body, and as individuals do to make this shift work for our advantage?
According to Thomas Friedman, in his global best-seller, The World is Flat, the playing field is levelling among players in the global economy, primarily due to technological innovations that have changed the World the way does business.
In the globally integrated enterprise, work will flow to places where it can best be done. There are 3 major factors to consider: Economics. Businesses are looking at Costs and Profit potential. Openness. Systems that are open nurture collaboration. Expertise. In a world where the means of production and distribution are increasingly available to anyone, the only way to differentiate yourself is to have better skills, brighter ideas, more innovative solutions, more knowledge than the next person in the same industry, and to apply it more effectively.
The Philippines, as you can see, has an advantage over other markets in terms of median age of workers. By 2025, the 10-20 year difference in median age for the Philippines (vs. other countries) will potentially render us highly competitive in attracting high-value skill-based jobs.
7 Global Shifts
Seven Global Shifts: Trends and Opportunities in ICT and BPO SEIPI-ASITEP Convention SMX Convention Center June 6, 2012Alejandro P. Melchor IIIDeputy Executive Director for ICT Industry DevelopmentDepartment of Science & TechnologyInformation and Communications Technology Office
The 1st Global Shift:The Flat WorldGlobal Integration Integration & the New Era of Global The fall of communism and the riseof Information & CommunicationsTechnology (ICT) have created the flatworld and the New Era of GlobalIntegration. The playing field has been leveled,and nations can compete for work inthe global knowledge industry likenever before. 2
1972 2006 the world is round the world is flat “The Blue Marble” Photo taken from Apollo 17 Last human mission to the moon3
In a globally integrated flat world, both ICT and Business Process Outsourcing become massiveThe Good News: the Philippines is globally competitive at both!Source: IBM Almaden R&D Lab Briefing for DOST and CICT, 2010
The 2nd Global Shift:The Emergence of a Global Platform for Work The deepening of global trade, capital and information flows, enabled by a “flat world” is changing where and how business value is created. This is driven by the core principle of global integration: When everything is connected, work flows. Where it flows and how it gets integrated is shaped by three forces. “Like water flows to find its level... Work will flow to places where it can best be done.” Economics Expertise Open Business Environment 5
Three Drivers of Global Workflow:2. Economics: Cost and profit potential3. Expertise: Importance of having better skills, ideas and solutions Ever increasing premium on innovation4. Openness: “Open for business” environment, competitive policy 6
India & Philippines Closest to Ideal in Labor Quality vs Cost 7
India & Philippines have best talent competitiveness index for BPOSource: BPAP, Everest Global, Outsource2Philippines, 2010
Philippines and India have best Labor Demographics Profile: they will have a 10-20 year median ageadvantage over other countries by countries by the year 2025 advantage over other 2025 by the year 2025 Years Median Age 2025 50 Median Age 2000 40 10-20 year difference in Median AgeMedian Age median age 1975 30 20 10 JapanWest US ChinaIndia JapanWest US ChinaIndia Phil JapanWest US ChinaIndia Phil Europe Europe Europe Source: U.N. Department of Economic & Social Affairs, Population Division Source: U.N. Department of Economic & Social Affairs, Population Division 9
Philippines #2 in worldwide IT-BPO after India Source: Aon Hewitt analysis
However, India a victim of its own success• Tier I cities saturated• Wage inflation• Rampant poaching• Attrition• Fiscal scandals• Terrorist attacks• New taxes
The 3rd Global Shift: From MultinationalCorporation to Globally Integrated Enterprise • Most valuable assets are the knowledge it creates and the ideas of its employees—intellectual capital. • Since it operates without borders, a Globally Integrated Enterprise places work where it is done best.
Philippines now preferred destination forthe premier Globally Integrated Enterprises
The 4th Global Shift: Global Knowledge WorkersIn High Demand in Global Knowledge Economy Between 2010 and 2020, the US, Europe, Japan, China, and India will face a shortfall of 32 Million technically specialized professionals. In the US alone, there is a shortage of 1.5 Million knowledge workers today. In the Philippines, ICTO projects a shortage of 700,000 knowledge workers for IT-BPO alone by 2016.
Talent Development Programs will address anticipated shortfall of 700,000 knowledge workers for IT-BPO alone by 2016
We are solving for a talent supply shortfall of700,000 to meet the 1.43M IT-BPO jobs by 2016 Target TESDA Training for Work Scholarships 250,000 potential additional supply over 5 yrs BPAP-led higher education 200,000 interventions over 5 yrs Career Marketing Campaign 100,000 additional supply over 5 yrs DOST & ICTO Scholarships 50,000 High school IT-BPO associate program 50,000 Other interventions (ICTO’s HEI 50,00 programs, corporate training & CSRs)
The 5th Global Shift: Rise of Smart Cities as a driving force for national progress
Next Wave Cities Program will spread jobs and investments throughout the archipelago
Next Wave Cities Program Components Research & Road Mapping Talent Development Marketing Capability Building Business Environment Infrastructure & Real Estate Next Wave Resource Mobilization Cities TM & Incentives
The 6th Global Shift: ICT as an engine of growth
Philippine Digital Strategy plus ICTO’s Industry Development Programs will produce $50B in ICT Industry revenues by 2016
Domestic ICT Industry Development Program Goal: Accelerate development of entire ICT Industry , increasing investments, export revenues and job creation. 2012 Target: ICT Industry Mapping ProjectTelecoms Broadcast & Media Others (IT Services)Software & Apps Development ICT INDUSTRY MAPPING ICT- Enabled CreativesComputer Hardware Semiconductors & Electronics
The 7th Global Shift: ASEAN, China and India as the world’s premier growth engineBy 2030:• ASEAN, China, India Region (ACI) combined GDP couldquadruple and exceed that of the US and Europe combined• ACI share of world investment projected to be 40% ofglobal total• ACI Region will comprise almost half the middle class ofthe world• ASEAN’s middle class population expected to rise from24% in 2010 to 65% in 2030• Wages in ASEAN, China and India will rise 3-fold Source: ADB: ASEAN, the PRC and India: The Great Transformation?
ASEAN ICT Master Plan 2015 ASEAN as the premier global ICT Hub Pillars1. Economic 2. People 3. Innovation Transformation Empowerment and Engagement To nurture a Key OutcomesTo promote trade & creative , • ICT as an engine of entrepreneurship To enhance quality innovative and growth in the ASEAN in the ICT sector. of life through green ICT sector countries. And Build an ICT affordable and engine of sectoral equitable ICT • Recognition for ASEAN as change. a global ICT hub • Enhanced quality of life Foundation for people of ASEAN4. Infrastructure Development- To provide the next generation infrastructure enabling policies. • Contribution towards ASEAN integration5. Human Capital Development- To develop a skillful ICT workforce and knowledgeable community.6. Bridging the Digital Divide- To evaluate countries and people through ICT Capabilities