Industries must be IT-oriented or perish

Industries must be IT-oriented or perish | Daily Tribune

The use of technology is inevitable to ensure competitiveness which makes its necessary for businesses to embrace it for survival.

The Department of Trade and Industry (DTI) is at the forefront of the push for industries to understand, adopt, and have full use of technology to reap its promises especially for small and medium enterprises, which is the backbone of the economy.

One of DTI’s investment promotion agencies, the Philippine Economic Zone Authority (PEZA), underlined the technologically-driven landscape of global trade that local firms and ecozone locators have to contend with..

According to PEZA Director General Tereso Panga, technology has fundamentally reshaped global trade, particularly with the advent of Industry 4.0—enhancing companies’ production and manufacturing capabilities through automation and robotics.

Panga said automation in manufacturing and logistics has significantly reduced costs while increasing the efficiency of companies, enabling them to produce and ship goods faster and more reliably.

“Companies can now track shipments in real-time, manage inventory more effectively and predict demand with greater accuracy.

“Technology has likewise become a springboard for businesses, especially SMEs to access global consumers and compete with international markets,” he said.

On the information technology-business process management (IT-BPM) sector, Panga said the entry of digital industries in health, fintech, blockchain, and big data, among others presents huge opportunities.

Big data and analytical tools, according to the PEZA chief, will raise opportunity for growth of the outsourcing industry and the emerging industries provide a window of opportunity for the country o unleash its potential as a smart investment destination.

The IT and Business Process Association of the Philippines (ITBAP) projects a seven percent growth, which is a modest expansion after a 9 percent growth last year.

The emerging economic sector has brought billions of dollars into the country as it competes with the overseas Filipino workers’ remittances as a major contributor to growth.

“Earlier, we were looking at a 6.5 to 7.5 percent growth for both revenues and headcount. After the first semester, we are reviewing and measuring where we are. So, in the next 60 to 90 days we will have a much clearer picture of 2024 performance but from all indications, I think it’s safe to say we will grow around 7 percent for jobs creation and income,” IBPAP president Jack Madrid said.

Revenues for the ITBPM industry last year was $35.5 billion, higher than the $32.5 billion in 2022.

Panga said the momentum in the growth of new business projects among the economic zones remains strong.

“PEZA continues to strengthen collaborations with both the public and private sectors in planning and implementing digital solutions for sustainability and ease of doing business,” he explained.

Such collaboration plays a vital role in improving service and enhancing clients’ experiences thus enabling the transacting locators to thrive in a fast-paced business environment,” Panga stated.

Ease of doing business via technology

He said PEZA is significantly improving in the aspect of ease of doing business through facilitating the locator companies’ permits and import/export shipments such as a zone transfer system, cashless and paperless transaction system, and data integration system.

“Other digitalization projects are cargo surveillance, online lodgment of export and import permits, electronic visas and letter of authority (LoA) and building permits, among others,” Panga enumerated.

He added that PEZA also identified the integration of SMEs in the value chain as a priority aimed at fostering the growth of ecozones with the crucial role SMEs play in supporting the operations of locator companies. We have also partnered with NetGlobal Solutions Inc. for the creation of the PEZA Digital Market Place, the first business-to-business (B2B) e-commerce, unified platform for PEZA locators,” Panga explained.

He said the program, will empower PEZA’s registered business enterprises (RBEs), particularly the exporters, to increase their online presence and use digital platforms/

“The scheme will help in growing the market presence of Philippine goods and services globally,” he indicated.

As a premier investment promotion agency in the country, Panga said PEZA hopes to attract foreign direct investments in advanced manufacturing, EV industry, RE development, mineral processing, regenerative agriculture, and frontier technologies to boost our mix of industries and value-adding in the ecozones.

“We are positive that the Philippines, with 80 million plus internet users and digital-savvy young workers, is positioned to benefit from the growth of Fintech, Web 3, artificial intelligence (AI), blockchain, electronic commerce, and other nascent technologies as we push for increased adoption of Industry 4.0, Sustainable Development Goals and circular economy partnered by our strong collaborations with the public and private sectors in line with our thrust on eco-zoning the Philippines towards inclusive and sustainable development,” he maintained.

Impact of e-commerce

In terms of the impact of e-commerce and digital platforms on international trade, Panga noted that the future of trade with emerging technologies has become the buzzword for every nation that wants to get ahead of the race.

Panga said, to date, e-commerce and digital platforms have democratized access to international markets, particularly empowering SMEs to expand consumer base, while emerging technologies like blockchain and AI promise to further streamline and secure global trade processes by enhancing transparency, security and efficiency.

“With the government’s role as enablers of business and facilitators of value creation, we are joining hands with our industry partners to strengthen initiatives that will allow our country to latch on to these emerging technologies and Industry 4.0 related economic activities,” he said.

“PEZA’s leads in measures to prepare the Filipino workforce and local supply/global value chains,” he added.

“The effects of these initiatives are already coming to fruition. Our ease of doing business rank in the World Bank Doing Business report (2004-2020) leveled at 95th out of 190 economies, 29- notches up from our 124th ranking in 2019. In the 2023 Logistics Performance Index by the World Bank, the Philippines also ranked 43rd, or top third among 139 economies,” Panga proclaimed.

The 2023 UN Global Survey on Digital and Sustainable Trade Facilitation also listed the country as second to Singapore and ahead of its ASEAN peers.

Panga said PEZA, among other government agencies, shall continue to respond to the call of President Ferdinand Marcos Jr., to ramp up digitalization in government to ensure fast and efficient delivery of services to the public.

“Additionally, we are committed to carrying out DTI Secretary Alfredo E. Pascual’s directive to adopt digital transformation to boost the country’s competitiveness as an investment destination, particularly for high-tech and innovator accelerator companies. In doing so, we are bullish that the security, trust, and confidence fostered by these innovations will further boost the global trade activities of businesses in PEZA ecozones — making our country more attractive to investors,” he said.