Upskilling and upscaling

The Philippine economy is showing signs of improvement, and it’s an encouraging trend. For one, the final quarter of 2023 marked the best performance for our economy since the pandemic hit. Almost all the MSMEs that we’ve encountered at our events lately are reporting brisk business, and judging by the hundreds who come to our free mentoring events at the malls, many more are aspiring to put up their small businesses.

For another, good numbers are coming out of the recent Labor Force Survey. The latest numbers show that the unemployment rate in the country went down to 1.83 million in November 2023 from 2.18 million in November 2022. On this matter, artificial intelligence and upskilling are being mentioned in the same breath as primary issues in the workforce. In my role as the lead of the Jobs cluster of the Private Sector Advisory Council (PSAC), it’s hard not to place these two words near the top of the agenda, particularly how they are seen as a threat to industries like the business process outsourcing (BPO) sector, a major source of revenue and employment for the country.

Upskilling and apprenticeship programs can equip our workforce with the necessary skills to thrive in this changing landscape. There is already proposed legislation that aims to provide Filipinos aged 15 and above with the opportunity to participate in apprenticeships and gain real-world work experience. My opinion is that we must prepare the upcoming generation to meet the demands of the evolving job market, both here and abroad, and upskilling, combined with apprenticeship, can help in this.

In the PSAC Jobs cluster, my fellow private sector colleagues and I are aware of the urgency to upskill our workforce. The world is already witnessing the impact of artificial intelligence, and its increasing pervasiveness in our daily lives will only continue to grow. I see it as the responsibility of employers to ensure that employees have the necessary skills to adapt to this changing environment, either by reskilling them in new areas of opportunity or upskilling them in their current roles. Likewise, employees must also take the initiative to see where they can improve their skills and become more competitive in this new environment, especially in the context of how artificial intelligence will affect their present and future jobs.

Meanwhile, apprenticeship programs have proven to be effective in developing a well-suited workforce. In fact, in other countries within our region, apprenticeship has already become an accepted practice for new hires. Spending time in apprenticeship provides valuable real-world experience to workers and at the same time, it allows employers to assess their compatibility with the job requirements. No doubt this will add value to the workforce, and can complement the use of artificial intelligence to make processes faster and more efficient.

In the world of MSMEs, you could say that upscaling is the counterpart of upskilling. In our work at Go Negosyo, we consider mentorship as a crucial pillar of successful entrepreneurship, alongside access to capital and markets. By giving MSMEs increased access to money, markets and mentoring, they are given the necessary tools to scale up their operations.

And our MSMEs have shown so much resilience and adaptability. Throughout the pandemic, we witnessed how they quickly adapted to technology, utilizing digital wallets to be able to transact more freely and using social media promotions to reach a broader market. We even saw the rise of “nanopreneurs” in both delivery riders and influencers, who are both employers and employees in their businesses.

Upskilling among MSMEs means assisting them in scaling up from being microentrepreneurs to small entrepreneurs and, eventually, to becoming medium-scale entrepreneurs. This growth is possible through proper mentoring, access to capital and market opportunities.

Sari-sari stores can become minimarts, carinderias can scale up to become restaurants or even go online and provide food delivery services. Sari-sari stores and carinderias are examples of enterprises we call survival businesses: they can be set up by unemployed people as a source of income. While that in itself demonstrates good initiative, it is still possible to grow these micro-enterprises into something that doesn’t just allow people to survive, but also thrive. There are opportunities; we just have to make these more readily accessible.

Both public and private sectors have a role in this regard. Financial institutions can facilitate the upscaling of MSMEs by providing the micro-financing necessary for expansion. Government agencies like the Department of Trade and Industry have for years mounted initiatives to help MSMEs upscale and give them the proper grounding in basic business concepts. And with Go Negosyo’s recent partnership with the Department of Education, we are taking it one step further by encouraging the next generation of Filipinos to explore entrepreneurship.

Strengthening the skills of employees and supporting the growth of MSMEs are vital for the continued and sustained growth of our economy. Digital platforms can facilitate access to markets, but public-private partnerships can make these efforts more than the sum of their parts.

The private sector is optimistic about the prospects of 2024, especially if current issues do not escalate and commodity prices remain stable. Managing inflation, both in the Philippines and globally, will undoubtedly benefit our economy. It is now important to capitalize on this momentum.

Upskilling and upscaling are critical components of a thriving economy. By investing in apprenticeship programs, upskilling the workforce and providing mentorship and access to capital for MSMEs, we can foster an environment conducive to growth and innovation. With the right support and opportunities, we can empower both the workforce and the entrepreneurs to reach their full potential and contribute to a robust and sustainable economy.