Jack Madrid, one of the founders of iAyala company, said it is difficult to push VC concept in the Philippines because of the underdeveloped R&D industry for IT.
The iAyala company once attempted to start up a VC market in the Philippines in 2000. In fact, it introduced an Idea Farm model in Cebu in an attempt to gather good technologically related ideas for business, but it later folded up.
Venture capitalists are businessmen who will take advantage of a good concept or IT development product and offer to fund the idea, as well as market the product.
Madrid said India's VC concept is successful because of the presence of India Institute of Technology, which is its competitive edge in technology. India gives focus largely on the technology R&D to give birth to brilliant technology-based ideas.
"Universities with strong R&D is needed in order to push good developers and innovators in technology. In our country, we don't have this kind of concentration," Madrid said.
Because of the weak foundation for R&D, the iAyala was not successful in its attempt to develop a VC community in the Philippines that supposedly would have funded and helped good and marketable concepts from software developers, and other Filipino technology innovators.
He said there must be a school that specializes on technology.
"We only have very few technology-based ideas, more are still traditional [in nature] rather than technology driven," he said.
Madrid said the Philippines still has to develop more schools and universities that will concentrate on math, science, and engineering to develop good technology innovators.
Instead he said "we are teaching the wrong thing."
Capitalists right now do not have the strong confidence to put their money on an invention, because the inventions being introduced are not backed up with extensive R&D and feasibility studies.
He said money will follow after an idea is born and is backed up by good R&D.
Earlier, Filipino technologist and IT expert Dennis Ramon Posadas urged Cebu to immediately initiate in forming a "venture capital community" to fully realize Cebu's bid to become the Silicon Valley of the Philippines, and take advantage of the ample IT talents here.
"I see extraordinary talents here. Why are they not competing with the rest of the world? A venture capital concept must be organized to nurture and make your talents' invention profitable in the world," Posadas said.