SHORTER life spans of companies should drive businessmen to adopt innovation in their businesses if they want to sustain their market presence, a technology official said.
Speaking before local businessmen during the Cebu Digital Innovation Summit at the Summit Hotel in Cebu City Friday, Blast Asia Inc. president Arup Maity said the average life span of S&P 500 companies is now 70 years old, versus century-old organizations in the past.
“The life span of companies is shortening. Today, even if you are the largest company, it doesn’t mean your company is safe,” said Maity, who is also director of the Philippine Software Industry Association.
Yahoo, for instance, is one unfortunate story of a giant company that got left behind in the process.
While capital was the key in the past, since the beginning of the industrial revolution, Maity underscored, the game has gradually changed to “innovation” in today’s digital disruption age.
Quoting analyst firm IDC, Maity said that in the Philippines, 25 percent of the top 1,000 local companies will see majority of their business “depend on their ability to create digitally enhanced products, services and experiences by 2020.”
The official posed the same challenge to the business process outsourcing (BPO) industry, which now faces threats from robotic process automation (RPA) or the use of software with artificial intelligence (AI) and machine learning capabilities that handle high-volume, repeatable tasks previously limited only to humans.
Once this becomes more widespread, the BPO industry, which employs about 1.1 million Filipinos and generated revenue totaling $23 billion in 2016, will be at risk.
Sound regulatory environment
Meanwhile, the Department of Information and Communications Technology (DICT) has pledged to support the digital innovation culture in the country by developing a sound regulatory environment for private players.
“We need to formulate policies, rethink regulations and establish frameworks to unify digital services and processes that pave the way for developing ICT innovation hubs today and in the future. A key move would be to craft enabling policies for ICT development, complementing the role of government regulation, so that we become aware and able to make connections in ways that resonate and have relevance,” said DICT Secretary Rodolfo Salalima in his speech.
Specifically, the digital economy is backed up by some of the government’s programs including the National Broadband Plan, eGovernment Master Plan and National Cybersecurity Plan.