BUSINESSES in the Philippines are encouraged to ramp up their innovative efforts in order to confront global emerging challenges, most especially changes brought about by the Fourth Industrial Revolution.
At the recent conference of the Financial Executives Institute of the Philippines, Finex President Ma. Victoria C. Españo asserted that businesses need to create or implement new solutions to weather the challenges brought about by digitalization.
“The world today is characterized by uncertainty and volatility; clearly it needs new solutions to battle the emerging challenges confronting our businesses and society. If we want different and better results the ability to innovate is a must,” Españo said.
Based on the 2018 Global Innovation Index (GII) released earlier in the year, the Philippines ranked 73rd out of 126 economies included in the study, maintaining the same spot it registered in 2017.
Through innovation input and output subindices, the GII is able to gauge an economy’s innovation performance, with the report published by the World Intellectual Property Organization, Cornell University and INSEAD.
Compared to its peers in the Association of Southeast Asian Nations (Asean), the Philippines was lagging behind as Singapore further moved up, to rank fifth from seventh in 2017.
Malaysia ranked 35th from its previous spot of 37th, Thailand inched up to the 44th spot coming from 51st last year; Vietnam settled at 45th from 47th; Brunei Darussalam climbed to 67th from 71st; Indonesia reached 85th from 87th; and Cambodia ending at 98th from 101st.
East West Banking Corp. Corporate Banking Head Mariza Enrile-Arcilla said that corporations should always keep in mind that innovating will enable their businesses to be “future-proof.”
“It’s not just embarking on innovation for innovation’s sake, but doing so with a big realization that if we don’t innovate we may not be able to future-proof ourselves, and may no longer be in existence in the near or medium term,” Arcilla said.
The GII report enables policy- and decision-makers to create strategies that will help boost innovations in their respective economies.
Españo emphasized that innovating will not only enable a company to sustain its business, but will also help it find more opportunities in the long term.
“This is a call to businesses to make innovation a priority to achieve sustainability. It is only through innovation that companies can penetrate new markets faster, connect to grow opportunities, and reach a position where they are able to not only survive but, more important, to thrive in the new world,” she added.
Teaching innovation
IN line with education, Asian Institute of Management (AIM) President and Dean Jikyeong Kang pointed out that improvements in skill sets will be important in line with upscaling the level of education in any country, especially during these times when technology is fast shaping the landscape. Critical thinking, as well as problem-solving skills, and collaboration were pointed out to be beneficial, especially for millennials.
“I think what we need, especially for the millennials, is we need to provide a platform…. One thing that I learned throughout my journey is the importance of diversity. It enables you to have an open mind, it uses the problem solving and analytical skills,” Kang said.
In earlier reports, it was pointed out that the Philippines’s lackluster performance in producing innovators, researchers and knowledge producers resulted in its growth lagging that of its Asean neighbors.
“Innovators, researchers [81 researchers per million population versus 205 in Indonesia and 115 in Vietnam] and knowledge producers [28 out of 777 journals, or 3.6 percent, are listed under Thomson Reuters, Scopus or both] indicate that the country has lagged behind many of its Asean neighbors in producing researchers, innovators and solutions providers needed to effectively function in a knowledge economy,” according to the Philippine National Development Plan.
The National Economic and Development Authority (Neda) pointed out that the country’s shortage in local researchers and innovators should not be overlooked.
De La Salle University Philippines President Br. Armin Luistro, FSC, added that companies should allocate an ample amount of their budgets for research and development (R&D), since that will enable businesses to understand their markets better and adapt to the changing times. The investments in R&D would prove to be an investment for the future.
“Maybe we should not be like Singapore, maybe we should discover how to innovate right here in the country. A lot of the innovators there also come from the Philippines and therefore we are not lacking in that skill. I think what we [lack] is the space, the support, the structure that will allow creativity, innovation, invention to flourish,” Luistro said.
Artificial intelligence and jobs
ASKED whether the Finex member companies are already shifting to the digital trends happening in the global arena, Españo explained that some companies are already starting the shift but are still in the earlier stages of development.
“I think there are some companies who are starting to do that [trying AI]. A good example is innovation hubs…there are businesses that are already using AI as a model. I know there are some companies in the early stages because there are different levels of maturities. There are others I know that have started but are not yet confident to talk about it because it’s still in the early stages of adoption,” Españo told the BusinessMirror.
In September, it was reported that Singapore-based AnyMind Group set up shop in the Philippines, offering artificial intelligence (AI) solutions for divisions, such as advertising, marketing and human resource (HR) industries.
The move was said to be in line with the company’s goal of fostering relationships with future clients, as digital advertising is seen to grow by 18 percent in Southeast Asia in the coming years.
In earlier reports, the IDC Asia/Pacific Enterprise Cognitive/AI survey, explained that the AI adoption rate for the Asean region reached 14 percent, coming from 8 percent the previous year.
IDC, an information technology (IT) research firm, surveyed a total of 502 executives and IT business heads across Asia Pacific (excluding Japan), which includes 146 respondents from Southeast Asia.
In terms of AI replacing human interventions in the workplace, Españo pointed out that it will affect the country’s employment but quickly added that a business can invest in the upscaling of the training of its employees for them to find work elsewhere if necessary.
“Well, it can be because the AI is actually supposed to replace manual repetitive process. There is such a risk, but I think the solution for that is for the company to be aware that some employees may be displaced and they should help those employees to learn new skills so they can be assigned to other work,” she added.
In February this year, Microsoft Asia President Ralph Haupter said that the new revolution being faced by companies in 2018 is AI.
“I believe 2018 is the year that this will start to become mainstream, to begin to impact many aspects of our lives in a truly ubiquitous and meaningful way,” Haupter said.
He explained that the contributors to the said revolution will include Big Data, cloud computing and factoring in AI capabilities.
He pointed out that AI is seen to be used by most companies either in R&D, design, logistics, manufacturing, servicing or customer engagement. He added that IDC believes that by 2019 at least 40 percent of digital transformation initiatives globally will be supported by AI.
Españo added that the government’s move to enact laws on data privacy or cybersecurity, among others, is a step in the right direction in terms of enabling both government agencies and private companies be better prepared in terms of adopting to digital advancements.
“There’s so [many] new laws, the data privacy law, creating the reality of these things for our [Finex] members will hopefully trigger action on their side…. We are not pushing but we are really encouraging [them in adapting to innovations] by widening the level of awareness,” she said.
Last month the Department of Information and Communications Technology (DICT) reported that it is hammering a partnership with around four other foreign countries on the enhancement of Philippine cybersecurity measures.
DICT Assistant Secretary Allan S. Cabanlong told reporters that the Philippine government, through the DICT, is eyeing to sign a number of memoranda of understanding (MOU) with other countries who can help strengthen cybersecurity in the country.
Cabanlong explained that he will be flying to the US this weekend to discuss international standards and best practices in line with cybersecurity, and the plan is for DICT to sign an MOU with Singapore, Australia and Malaysia as well.
Earlier in October, Finex encouraged companies in the Philippines to be more “future-ready” by adapting to innovations and changes presented by the Fourth Industrial Revolution.
The Singapore way
SINGAPORE’S Ambassador to the Philippines H.E. Kok Li Peng, in her keynote address, shared the experiences of Singapore in adapting to innovations and being future-ready, citing as an example its investments in R&D.
“To strengthen capabilities, the government made a significant investment to expand our R&D efforts, setting aside S$19 billion from 2016 to 2020 under our research, innovation and enterprise 2020. The RIE 2020 can be tapped in line with developing viable products,” Peng said.
The RIE 2020, she said, was crafted to help micro, small and medium enterprises, among others, in terms of starting up their businesses or growing their companies.
Image credits: Skypixel | Dreamstime.com, Bazuzzza | Dreamstime.com