US firm to raise funds to build ‘Silicon Valley’ in RP

The Philippines may soon have its own Silicon Valley. That is, once local IT people get the funding they need to make their businesses grow.

And this is what US-based VenturePath Inc. is doing.

VenturePath believes the Philippines has all the qualities that turned a sprawling farming area in Southern California into Silicon Valley, the world’s IT capital.

Abby Molano, VenturePath president, said the only thing that the country lacks is an environment that would spawn and nurture IT enterprises.

"The Philippines may differentiate itself from other countries if it combines the strengths of its land and its people," she said. "Filipinos are known for their good ideas. And good companies with good ideas and strong will to succeed will make it in the global marketplace."

Molano has just come from South Korea where she developed IT startups by raising $50 million for them. She wants to do the same here and lay the foundation for an IT hub similar to Hong Kong’s Cyberport, India’s Bangalore or Malaysia’s Multimedia Corridor.

However, Molano said many have tried to make their own versions of Silicon Valley and failed. She believes she has found the right formula for the Philippines.

"For a developing country such as the Philippines, we believe the best strategy is to avoid replicating Silicon Valley. Instead we should understand and learn from its experience and adapt lessons to the unique needs and circumstances that exist here," she said.

Molano pointed out that the key is to make small technology enclaves where IT startups can grow. Such a strategy, she said, worked for Israel and Taiwan. "We believe the same thing will work here. The Philippines has a number of the essential elements required to create a Silicon Valley-like ecosystem," she said.

RP’s strengths

VenturePath has been monitoring the Philippines for the past several years and found it to have three qualities suitable for establishing its own Silicon Valley.

The company said the Philippine government seems to be serious in treating IT as one of its priorities. It cited the passage of the Electronic Commerce Law last year and the opening of major industries, particularly the banking and telecom sectors, to foreign investors as good signs of growth.

"These moves toward liberalization have created a more attractive climate for businesses," VenturePath said.

The company added that President Arroyo is showing all signs of furthering the progress made by her predecessors in the IT industry. It considers this as another plus for the country in terms of attracting capital for IT ventures.

And on top of all these, VenturePath believes the Philippines’ having a large English-speaking and educated population will play a big part in the rise of a local Silicon Valley.

"The Philippines actually possesses an oversupply of intellectual capital," the company said.

The foundation

To build a local Silicon Valley, Venture Path wants to establish first in the country a partnership between the government and the private sector to lay down the "foundation" for IT enclaves.

Part of this foundation is the move to showcase Philippine companies that have excelled in the IT industry. This early, VenturePath is proposing to select 10 local companies to be cited as "examples of excellence" which will be provided with additional funding through the capital it is starting to raise.

Also, VenturePath proposes to highlight people behind these excellent companies and turn them into "role models" for future IT businessmen.

And lastly, the company wants to finance projects that would allow IT workers with exceptional talents to earn high salaries without leaving Philippine shores.

"The overall impact of this will ultimately create high-paying technology-oriented jobs, providing workers with substantial extra income that will flow into the economy," VenturePath said.