Solving the wicked problems of bridging digital, economic gaps

The results of a Stratbase ADR Institute commissioned Social Weather Stations survey draw a strong link between the economy and technology and present a case for more significant government and private sector collaboration to address current digital and economic gaps.

The nationwide survey, conducted between October 20 to 23, 2021, found that almost nine in ten Filipinos (89%) agreed that “the benefits of digital technology such as strong cell phone signals, fast e-banking, and social media can greatly help create jobs and businesses."  Agreement with the statement was even higher in the National Capital Region at 94%.

The survey also found that 92% of respondents nationwide agree that “the government should build, upgrade and extensively expand the country’s digital infrastructure to improve speed, reliability, and access to the internet nationwide.” 

Some 82% of respondents also said that the economy’s growth would be accelerated if the government collaborates with the private sector. 

Asked to identify issues that the private sector can address to boost the economy, 65% of respondents cited creating jobs, 57% expanding livelihood, 46% helping uplift the lives of Filipinos out of poverty, 30% improving healthcare systems, 22% improving the quality of education, and 11% improving the quality and access of digital services. 

These findings were presented during the first session of Pilipinas Conference 2021: Sustaining Economic Recovery Post-Pandemic Towards 2022 and beyond, organized by Stratbase -ADR Institute late last month.

Indeed, this strong link between technology and economic recovery had to be one of the key takeaways from the conference. After all, Secretary Ramon Lopez of the Department of Trade and Industry, who is also chairperson of the Board of Investments, spoke about e-commerce and how it was is one of the few industries that experienced significant growth last year despite the economic slowdown.

“The department has been supportive of the international initiatives on digital economy and trade,” he said.

“The Philippines has been working to facilitate greater adoption of the digital economy through policy regulations, frameworks, we even issued our e-commerce roadmap, we have done a lot of digitalization of MSMEs, introducing e-commerce, and linking them with known e-commerce platforms, concrete initiatives that empower the stakeholders, capacity-building, and even the digitalization of key government services,” Lopez added.

Diwa Guinigundo, former deputy governor of the Monetary and Economics Sector, Bangko Sentral ng Pilipinas, also spoke about the several advantages of the digital economy during the pandemic. Further stating that “The private sector can lead in the innovation of digital products and services that would allow us to increase the breadth and reach of markets in these digital times of pandemic.”

Further highlighting the vital role of the private sector, Jaime Augusto Zobel de Ayala, chairman of Ayala Corp., said that with the backdrop of a pandemic that worsened the fissures of inequality that were already present in our society, that “unprecedented collaboration is demanded of us -- the private sector, government, and civil society, both locally and globally -- all of us have to work together.”

Adding that “the private sector has established itself as a reliable partner of the government in addressing the people’s most urgent pain points,” which include poverty, hunger, health emergency, and unemployment. 

“Squarely addressing the challenges in these areas is the only way to create sustainable impact in its broadest and most inclusive sense,” he said.
Stratbase ADRi President Professor Dindo Manhit called the private sector’s proactive approach “stakeholder capitalism at work.” Stakeholder capitalism is a system where private companies re-orient themselves to serve the interest of all their stakeholders, not just shareholders. 

“Through the investments, expertise, and innovativeness of the private sector, coupled with heightened cooperation with other stakeholders, we believe that the most urgent socio-economic challenges can be addressed, jobs can be created, livelihood ecosystems can be nurtured, poverty can be alleviated, and the lives of millions of Filipinos can be uplifted,” he said. 

While stakeholder capitalism plays an important role in addressing the country’s problems, the country’s growing digital and economic gaps may be too complex to overcome by a pro-active private sector acting alone.

For instance, Charlotte Justine Diokno-Sicat, research fellow, Philippine Institute for Development Studies and vice president, Philippine Economic Society (PES), said the reality of the digital divide is that it exacerbates scarring for the poor and vulnerable in society that are excluded from education, healthcare, work, and credit access – all of which are necessary for human capital development.

“With the shift to a more digital economy, there is a need to upskill and retool workers and enhance technical capacities to be aligned with current public sector initiatives such as the Medium-Term Information and Communications Technology Harmonization Initiative (MITHI), which are government’s efforts to improve government online platforms for delivered better services,” she said. 

Amb. Benedicto Yujuico, president of the Philippine Chamber of Commerce and Industry (PCCI), said our young, educated, and technologically savvy workforce mindset must be oriented towards innovation strategy. 

It is clear from the survey results and from the Pilipinas Conference discussions that the private sector plays a vital role in both driving economic growth and increasing access to digital technology. However, the country’s wicked problems require more than a pro-active private sector to overcome.

The network governance approach sticks out as a way forward in tackling the complex problems of bridging the digital divide and reviving the economy. This approach, of which the concept of public-private partnership is an example, finds solutions and opportunities to address social issues in the nexus of private sector, government, and civil society collaboration.

Indeed, these uncertain times and the complex challenges of addressing the Philippines’ growing digital and economic gaps demand our “unprecedented collaboration” and serve as reminders that “all of us have to work together.”

Paco Pangalangan is the executive director of think tank Stratbase ADR Institute.