Phl urged to invest more in people, innovation

MANILA, Philippines - Companies in Southeast Asia, including those in the Philippines, need to invest more in innovation and in their people to drive the business forward as well as make their respective countries’ economic growth sustainable, an economist said.

“In order to move forward and in order to make the successful growth you are having today sustainable, that switch towards investing in innovation, investing in people and investing in better operational performance is going to be the key,” Bart van Ark, executive vice president and chief economist of research think tank The Conference Board said yesterday during the joint membership meeting of the Management Association of the Philippines and Makati Business Club yesterday.

“If that switch is not going to be made, then a gradual slowdown will set in,” he warned.

Investing in innovation and in the people part of the companies is necessary as the region is on its way to establishing a single market or the Association of Southeast Asian Nations (ASEAN) Economic Community (AEC), Van Ark said.

The AEC, which will be in place by 2015, is expected to lead to free movement of goods, services, investment, skilled labor, as well as flow of capital in the region.

Van Ark said that the latest Chief Executive Officer (CEO) Challenge Survey conducted by the research think tank showed that ASEAN CEOs are concerned with the greater competition from free trade as well as the increased competition for skilled talent with the establishment of the AEC.

With the share of the manufacturing sector in ASEAN economies relatively high, he said, investing in innovation would be critical for companies.

He said companies in the Philippines in particular, would have to think about innovation especially since the share of its manufacturing sector to the economy is lower than most of its peers in the region.

The manufacturing sector, he noted, is the most innovative sector of the economy.

He also said that as increased competition for talent is seen with the AEC, companies need to grow talent internally by providing training.

He added that increasing efforts to retain critical talent would be needed.

The Conference Board is a global independent business membership and research association founded in 1916 with a mission to provide leading organizations with the practical knowledge they need to improve their performance and better serve society.