Innovation needs to extend to the provinces

WITH its young, tech-savvy population and the presence of steadily growing government initiatives meant to encourage local startup growth, it is not an exaggeration to say that the Filipino tech ecosystem is poised for a resurgence.

Though it still lags behind neighboring tech hubs like Singapore, Hong Kong and even Indonesia in terms of infrastructure, factors such as the lower cost of labor and the high levels OF ENGLISH PROfiCIENCY MAKE THE Philippines an attractive option for companies looking to maximize their growth potential.

In fact, on top of a number of homegrown startups plying their trade in the country, tech giants such as Google and Facebook have ALSO ESTABLISHED OFfiCES LOCALLY.

Yet many tech entities are concentrated in Metro Manila, leaving provinces out in the cold. Few people in the provinces get exposure to cutting- edge tech companies, limiting job growth and also their imagination on what solutions are possible to create when the time comes to try their hand at entrepreneurship.

Thus, there’s the question of how tech companies could be convinced to move out of the hustle and bustle of the capital and invest in the up-and-coming cities in the provinces. After all, growth is not real unless it is truly inclusive and this needs to reach the provinces, where the population is younger. Especially in light of the economic fallout from the coronavirus pandemic, the country needs to give its people all the economic boosts they could get.

So what would it take for companies to extend their reach into the provinces?

Incentives for companies to move

For far too long, Metro Manila has been perceived as having the country’s best infrastructure, the easiest access to the top talent and generally just being the best place to be for making connections. The challenge, therefore, lies in convincing businesses that similar opportunities and more could be had elsewhere across the archipelago.

The creation of special economic zones in the provinces is a start. In 2019, President Rodrigo Duterte signed Administrative Order 18 banning the creation of new economic zones in Metro Manila to encourage the development of special ecozones in the countryside.

These new economic zones could be the success stories needed to lure investment to the provinces. In Cagayan province, the Cagayan Economic Zone Authority (CEZA) is a freeport area offering not just picturesque resorts, but also modern township projects catering to companies THAT DO ONLINE GAMING, fiNANCIAL technology and cryptocurrency, garnering interest from South KoREAN AND CHINESE fiRMS. THE AREA promises full transparency and smooth transactions with the local government, eliminating the red tape the Philippines is unfortunately notorious for. Finally, CEZA also pledges generous tax incentives such as charging only 5 percent of gross income in lieu of all local and national taxes.

Though in its earliest days, CEZA could serve as a blueprint for what to do in the future. With the right incentives, companies could surely be convinced that moving out of Metro Manila is not only immediately more costeffective, but more strategically sound for the long run.

Show business examples to follow

Another way to convince companies that extending tech and innovation to provinces is to simply show that other businesses that are already doing it.

In Baguio, co- working space Calle Uno houses innovative companies such as information technology service management provider TaskUs and web development service Bitshares Labs. Davao City has its “Kadena Hub,” where transaction management company TraXion trains over 100- plus young developers in the fields of blockchain and artificial intelligence. In Bacolod, local startup Hybrain even earned the honor of being tapped to create the country’s first automated coronavirus center. Cebu houses the Filipino arm of PicnicHealth, a health startup that revolutionizes the way medical records are kept.

Yet even those who have gotten their start and experienced most of their growth in Metro Manila are now looking outward, as well. For example, on- demand service app MyKuya had been serving Metro Manila residents since 2017, giving them the option to hire a kuya or ate (as their talents are affectionately called) to do almost anything for them with just a few clicks. Under the Luzon-wide enhanced community quarantine, demand for the app spiked on two fronts: more people wanted to sign up for the app as a user while many who lost their jobs got the opportunity to come onboard as a kuya or ate.

With their recent growth, MyKuya has decided to extend operations to provinces all over THE PHILIPPINES, fiRST STARTING OUT in nearby places like Cavite, Quezon and Zambales. Not only does this generate more opportunities for workers in these areas, but users get access to convenience like never before.

Furthermore, the expansion helps along its newly launched franchise program that could give small businesses in the provinces an easy tech platform to augment and/ or monitor their employees. Under this program, any organization — whether a manpower agency or a small business — could also take their services online, easily connecting with demand in their area. Here, employers could track attendance, customer feedback and quickly access customer feedback on their employees. This cuts down on the time and effort a business may need to spend on finding demand and the proper talent, and even dovetails perfectly with MyKuya’s goal of generating a million new jobs by 2022.

When businesses see their peers moving to the provinces and actually succeeding, it’s easier to follow suit.

Too much potential to waste

The fact of the matter is that provincial cities in the Philippines are growing and growing. The cities of Davao, Bacolod, Cebu and Cagayan de Oro have managed to land in the top 10 most competitive cities in the Philippines. This means the local governments of these cities have shown they are EFfiCIENT, WILLING TO SUPPORT THE development of infrastructure and are open to business investment, with just some of the proof being in some of the companies mentioned above.

The opportunity is certainly there, ripe for the taking. More AND MORE STARTUPS HAVE fiGURED out the awesome economic potential in less- explored places. Keeping up this momentum is in the best interest of not only the business community, but the Philippines as a whole.