Expert says RP’s IT agenda lacks focus, bats for ‘branding’

The Philippines should ‘brand’ itself if it wants to be a force to reckon with in the world information technology (IT) arena, an IT expert said.

Bernard Yu, vice-president of the Information Technology Association of the Phils (ITAP), said IT 21, the country’s IT agenda for the 21st century lacks focus. "It does not provide any details on how we are supposed to push our IT sector. We need to have something doable, Yu, who is managing director of Oracle Phils., told The STAR.

He asked government and the private IT sector to decide on what it wants the Philippine IT sector to be. "We can be the call center of Asia or the cartoon capital, but we have to brand ourselves," he said.

Yu said the private sector has already discussed this issue, but they have yet to decide on the matter.

The matter is also being discussed by government, in particular, the Department of Trade and Industry and the Department of Science and Technology.

Yu noted that when Singapore decided to ‘brand’ its IT sector, it decided on a ‘brand’ that is easily understandable and doable. "But to be the IT capital of Asia, as what government wants our IT sector to be, is unclear," he emphasized.

The Philippine Institute for Development Studies (PIDS), in a recent study, noted that apart from the Board of Investments incentives for semiconductor firms, there is no comprehensive and clear policy to promote IT as industry.

The country’s IT industry, according to PIDS, is still on a much lower level compared to the newly industrialized economies like Singapore, Taiwan, and South Korea, both in terms of sophistication of products and technological complexity of the production process involved.

One industry officials described the Philippine IT sector as a mere sweatshop, with production mainly consisting of labor-intensive assembly and testing operations which do not require any sophisticated manufacturing technology.

Yu said the country’s advantage in terms of low labor cost is not a real advantage since other countries, like China, are now offering even lower wages.

"But low cost is not a factor which many countries consider. What is important to them is the quality of work," he said.

In terms of market share, the local IT industry has yet to create a niche, raising concerns over its long-term growth prospects. The country’s market share has remained at one percent during 1990-1997, compared to China and Mexico’s share of two percent each. China and Mexico are becoming alternative locations for the labor-intensive segment of the IT production chain.

The Philippines is the only country where the IT industry is highly concentrated in just one major segment – semiconductors, making total exports highly vulnerable to the global IT situation.