Bigger market, competition

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Friday, March 14, 2014


THOUGH the free movement of goods around Southeast Asia began before the Asean Economic Community has taken effect, the free movement of professional talent between these countries is not as commonplace.

With many local information and communication technology (ICT) companies losing their best workers to companies based abroad, like in Singapore, the challenge for the local ICT sector come 2015 is to make sure there are more workers qualified to work in the sector when the demand is expected to spike even further.

Cebu Educational Development Foundation for Information Technology (Cedfit) managing director Wilfredo Sa-a Jr. admitted that the higher compensation being offered by companies abroad is a huge draw for the local talent, as they can earn three to four times more than what they earn from local companies.

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However, he said the Philippines is still better off than its neighbors in Southeast Asia because it is second only to India in terms of outsourcing around the world.

“That means we are the best in Asean (the Association of Southeast Asian Nations), no doubt about it,” he told reporters.

Where’s our edge?

At an Asean economic integration workshop for the ICT and business process management sector last Tuesday, Sa-a said there is an opportunity for this sector to flourish when integration happens, as companies from around the region might need contact centers and other BPO operations that can be serviced out of the Philippines.

“The kind of service required is customer-driven, the ability to communicate and handle customers well. These are strengths of the Filipino workforce. We have an edge there,” Sa-a noted.

He also believes that the academe can benefit if its institutions are able to produce top graduates in the sector at a fraction of the cost of some universities around Southeast Asia. While Cebu’s medical schools have succeeded in attracting foreign students, Sa-a admitted that the ICT sector has not gotten there yet.

Cebu’s universities, however, are learning. Their instructors are participating in free trainings provided by the EMC Academic Alliance Program, which first provided cloud infrastructure services training to 23 teachers in Cebu. They will be replicating the training in Sta. Rosa, Laguna and Bacolod this summer and will provide another series on big data science for Cebu.

Expensive broadband

A concern that was raised in the workshop was the cost of and access to broadband.
Frederick Amores, Visayas head of the National Computer Center, admitted that the
urban centers have no problem with bandwidth, as most areas have proper connectivity.

He noted, though, that there are many areas of the country that do not have access to the Internet.

He also noted that high-quality broadband is expensive. While 100 mbps in Japan could be had for P4,400 a month with converged media services like cable TV, 100 movies a month and a telephone line, he said that kind of speed will require at least P20,000 a month with no other perks.

“If the industry is bandwidth-intensive like ICT, how do you compete?” he pointed out.

Opportunity, too

However, he believes local ICT companies can also find opportunities by providing their services to less developed cities around Southeast Asia that are beginning to expand.

Amores also brought up the need for academe to meet international standards. He had similar views with Sa-a and said universities can have a great competitive advantage if they can provide the best training in ICT.

“If the academe is able to offer world-class education, they will come. They are willing to pay for education. The only problem is, do we have the facilities, faculty and credentials to attract that kind of market?” Amores said.

For Amores, the issues of integration for the ICT sector are conflicting. On one hand, there is a bigger market, but this can also mean more competition. Companies struggling with the loss of talent will have to consider raising their wages, adding to their labor costs. But the opening up of the labor market could also see more workers going to other places.

“We can’t stop them from moving out. The only solution is to have more graduates who can work in the sector.”

Published in the Sun.Star Cebu newspaper on March 15, 2014.

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