The information-technology (IT) services industry, a subsector under the information technology and business- process outsourcing (IT-BPO) industry, is poised to notch at least a 20-percent growth this year on the back of continued growth of IT-BPO firms and an increase of local technology start-ups.
Jonathan de Luzuriaga, president of the Philippine Software Industry Association (PSIA), also said he sees the subsector to increase its employees, from the current count of almost 88,000 full-time workers to breaching the 100,000 mark by the end of the year.
“The growth for the IT services has been averaging 20 percent in the past years and this year, it’s already a given, and we’re actually trying to stretch that a little bit further this year,” Luzuriaga said in a chance interview, adding that the IT services subsector has been outpacing the entire IT-BPM growth.
While not disclosing a specific 20-percent growth rate target, Luzuriaga noted that prospects are bright considering that the bigger players in the technology services landscape continue to expand along with the budding start-up community.
In 2014 the Philippines’s technology services industry grew by 20 percent over the year before, raking in $2 billion in revenues, the second-highest growth among the IT-BPM subsectors. This growth was credited to the diversification of services by global in-house centers (GICs), and the growth of an IT service activity, information-technology outsourcing (ITO).
ITO is the subcontracting of IT management, such as software development and programming.
Despite the revenue haul of the subsector in the Philippines, the $2-billion revenue was only 2 percent of the global industry’s worth.
Growth was fueled by the demand from the US, Europe and the so-called Apac region, which includes New Zealand, Australia, Japan and South Korea.
Moreover, despite a global contraction of 30 percent to 33 percent in the technology services delivery, the Philippines and India have managed to buck the trend because of sustained attractiveness of the two locations for IT-BPM.
“The bigger players are becoming bigger and it’s not difficult to convince the IT sector, as well as other GICs, to be serviced from the Philippines. There is also that start-up community that may not be contributing a lot in terms of headcount, but in terms of revenue, are generating intellectual property revenue because they’re developing products now,” Luzuriaga added.
To capitalize more on this fledgling community, the industry is one with the Information Communication Technology Office, under the Department of Science and Technology (DOST-ICTO), on the Philippine Start-Up Challenge.
The competition caters to tech-savvy college students, and is aimed at spurring innovation by encouraging them to develop software that can later be developed as viable businesses.
The DOST-ICTO and the PSIA crafted a Philippine Digital Start-Up Roadmap that aims to raise the current base of start-ups now from 100 to 500 by 2020.