The 2001 World Competitiveness Report: The Philippines is losing the war for bytes and brains

A new global war is looming–a war for the best brains.

"In a knowledge-based world economy, the most competitive nations (and companies) have to be attractive to the best people. The winning nations have not only to create a favorable environment for the best investments but also for the best brains," said Stephane Garelli, director of the World Competitiveness Project 2001 and a professor of the Switzerland-based International Institute for Management Development (IIMD).

During the 1990s, good infrastructure, peace and order, sound government policies that adhere to a more free market stance, among others, were the criteria that make a country attractive to investors. These factors are, however, no longer enough with the fast development of information technology and telecommunications.

The key today is to get the brightest minds to not only handle existing jobs but also to develop further research and innovation in technology.

"The battlefield for world competitiveness is moving to bytes and brains. Nations and businesses need to rapidly shift their policies to handle this new reality. In a Darwinian world, the winners are indeed the fastest and the fittest to adapt. The others simply disappear," said Garelli.

Garelli points to the continued attractiveness of the United States, which again topped the "2001 World Competitiveness Report", an annual survey that ranks 49 countries on economic performance, government efficiency, business efficiency and infrastructure.

Hiring the best brains

Between 1994 and 1999, the US hired 124,000 Indians, 68,000 Chinese, 57,000 Filipinos, 49,000 Canadians and 42,000 British holders of higher education degrees. Of the five million people employed in the US by the IT sector, one million are foreigners. In Silicon Valley, 30% of the software engineers are of Indian origin.

Last year, the US hosted some 75,000 Chinese and Indian students as well as 20,000 from Germany, Britain and France. Special visas were given to those willing to stay and work in the US.

Realizing this trend, other countries have started programs geared towards attracting the best minds. Australia, for example, has recently implemented a $2-billion package to attract and retain high-level technology people. Taiwan, to cite another example, has lured back 50,000 scientists to sustain its emerging high-tech industry.

Switzerland has opened special scientific consulates in Boston and San Francisco to assist and better manage its brightest citizens working in the US. Last year, Switzerland had a "brain balance deficit" with the rest of the world of about 400 top scientists, with each scientist costing the country $750,000 in education.

Philippine ranking

Where does the Philippines stand in all these?

In the 2001 survey, the Philippines ranked first in skilled labor and fourth in qualified information technology workers.

While these may sound good, the numbers also mean the Philippines has many skilled laborers, technicians, engineers and nurses who cannot find jobs at home, said Roberto Galang, program manager of the Asian Institute of Management’s Washington Sycip Policy Center. The policy center provides the IIMD with the Philippine data for the annual competitiveness report.

The 2001 survey identified the "brain drain" as one of weakest links in the world competitiveness of the Philippines. Another weak link is the high pupil to teacher ratio in the country’s primary and secondary schools.

The Philippines ranked 36th in terms of spending for education. As a percentage of gross domestic product, the 2001 survey ranked Israel and Canada as the top spenders for education.

The Philippines also ranked a poor 25th in the role played by the education system in meeting the needs of a competitive economy.

In terms of overall competitiveness, the 2001 survey ranked the Philippines 40th among 49 countries, down from its 37th rank in last year’s survey.

Major world players

The overall world competitiveness rankings of 49 countries are based on four criteria: economic performance, government efficiency, business efficiency and infrastructure.

On the criterion of economic performance, the United States came in first. Singapore placed second, followed by Finland, Luxembourg and the Netherlands. China/Hong Kong made a big jump to sixth place in the 2001 survey from 12th place in 2000. The Philippines was at 40th place. At the bottom was Indonesia.

On the criterion of government efficiency, Singapore maintained its top position, followed by Finland. Ireland placed third, followed by China/HK and Australia. The Philippines slipped to 37th place from 34th last year.

On the criterion of business efficiency, the US kept its top ranking, followed by Finland, the Netherlands, Iceland and Sweden. The Philippines ranked 42nd, down from its 39th place last year.

On the criterion of infrastructure, the US again topped the list, followed by Finland, Sweden, Iceland and Singapore. The Philippines stood at 42nd , same as last year.