IT competitiveness in R&D: Philippines finish last

October 7, 2011: In a fresh survey of IT competitiveness in Research and Development, Philippines ranks zero along with Bangladesh. The survey was designed and carried out by Economist Intelligence Unit (EIU) on behalf of Business Software Alliance (BSA). Business Software Alliance is a trade association that promotes the goals of the software industry. It is the pioneer non-profit organization that ensures a safe and legal Information Technology world. The main objective if BSA is to catalyze innovation and growth of software in market place.

The survey results show that very little R&D takes place in Philippines when compared to Indonesia (0.1`), Sri Lanka (0.1), and Vietnam (0.2). The survey was conducted among 66 countries and Philippines dropped from 51 to 52 this year. Among the other countries Singapore ranked number three, jumping up by six places. United States and Finland ranked number one and number two respectively. Asian countries like Taiwan ranked 13, Japan 16; both South Korea and Hong Kong were tied at 19. South Korea fell by three places while Hong Kong went up two when compared to last year.

Even though R&D takes place in the Philippines, it is minimal when compared to its neighbors. This is as a result of very little spending by the government on fundamental Research and Development. Multinational companies such as Nokia and TrendMicro do not share their information on R&D because they receive no recognition in the Philippines. Philippines is considered as a center for low-value voice support services in the Business Process Outsourcing (BPO) industry. More over competitors in the BPO- IT such as India and China seems to perpetuate the myth that Philippines is a center of low value voice support services to win over high value IT-BPO services.

Even though the BSA survey results portraits Philippines as an IT backwater, the reality is different. The survey shows appreciation for the Philippines in the Business Environment category with 67.8 point approximately in par with Malaysia (69.6). Thailand with all its internal problems score of 78.8 which is significantly higher than the Philippines. Philippines which boasts of its telecom infrastructure, scores just 7.3, which is a dangerous misconception. The reason for this low score is due to low broadband internet penetration as it is expensive for the customers in the Philippines.

Philippines scores less-than-mediocre in human capital with 34.9 points and mediocre in legal environment with 50.5 points. The low score in R&D may be because of its damaged perception in IT competitiveness or because of their addiction towards using internet for more social means.

It’s high time to analyze what went wrong.

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