Information and communications technology (ICT) has greatly influenced people’s lives and has dictated the ways of pursuing work. Regardless of distance, people could be reached anytime and anywhere. ICT has redefined the term “work”. It used to be that “work” is a place where people are. Nowadays, “work” is something that people do. People can now do work and achieve productivity even at home with the use of a computer, a phone line, and an Internet connection. A service provider need not meet a customer eye-to-eye nor close a deal with an actual shake of hands. Moreover, the emergence of e-government makes it possible for citizens to get information from and transact business with government agencies. Ways of doing business have definitely transformed through the years.
In the 2007 Global IT Report released by the World Economic Forum together with the Information for Development Program of the World Bank and INSEAD, virtual connection and transaction are very much alive especially in highly developed countries such as Denmark. In 2007, Denmark reached the apex of its upward trend since 2003, displacing the United States, as the world’s ICT leader.
Denmark tops all countries in almost all the survey categories: No.1 in regulatory and political environment, No.2 in government readiness, No.3 in individual usage, No.5 in government usage, and No.6 in individual readiness. In the top 10 most ICT competitive countries, Denmark is joined by Sweden, Singapore, Finland, Switzerland, Netherlands, United States of America, Iceland, United Kingdom, and Norway.
But where is the Philippines in this global competitiveness ranking? Evidently, the country still needs a lot of catching up to do with regards to adapting and diffusing the promises of technology. Among 122 countries surveyed and considered in the 2007 Report, the Philippines ranked No.69 which belongs to the 43.4% percentile. This means that in terms of Networked Readiness Index (NRI), the measurement of countries’ competitiveness in ICT, the Philippines is only a middle performer.
To arrive at the NRI, the Global IT Report considered three major parameters namely Environment, Readiness, and Usage. Each of these components could be further classified into Government, Business, or Individual sub-components where 67 variables are used to measure a country’s performance. Some of the variables considered include basic infrastructure, quality of education, and government efficiency and effectiveness.
ENVIRONMENT COMPONENT INDEX
The Environment Component Index measures how conducive an economy is for technology promotion and innovation. It considers 28 variables on Market, Political and Regulatory, and Infrastructure Environments. Of these three major pillars, the Environment pillar is the country’s best where the Philippines ranks No.61 among 122 countries.
In 2006, the Philippines ranked No.73 in Environment Component Index out of 115 economies, but this year, the country jumped to No.61 among 122 countries due to the double-digit rank improvements from all the 3 sub-components. Compared to 2006, Market Environment is up by 22 notches to No.47, Political and Regulatory Environment has improved by 8 notches to No.59, while the Infrastructure Environment leapt by 9 notches to No.85.
The Philippines boasts of its high-tech exports variable that ranks No.5 on this category worldwide. Although the data used in the Report is still from 2004, the outstanding performance should not be strange at all because electronic chips comprise about 60% of the country’s exports through the years. Beating the Philippines in high-tech exports are Singapore, Taiwan, Malaysia, and Malta.
Looking closely at other specific variables, the Philippines posted the strongest growth in a year in technological readiness and electricity production. The country’s technological readiness, which captures the openness of the Filipino market to imbibe technology in their daily lives, shot up 13 notches to reach No.63 from No.76. However, Indonesia ranked better in technological readiness by grabbing the No.49 position.
On the other hand, the Philippines’ electricity production ranking ascended to No.84 from No.98 in 2006. Although power generation got better, low power cost was not assured. The Philippines which has one of the most costly electricity rates in Asia must double its effort to privatize the entire power industry and nationalize power rates in its effort to bring down prices.
Among the variables in the Environment Component Index, the worst ranking is obtained in burden of government regulation at No.106, followed by effectiveness of law-making bodies at No.100. Other factors with double-digit downturns are financial market sophistication, number of procedures required to start a business, and laws relating to ICT.
READINESS COMPONENT INDEX
The Readiness Component Index, which accounts for the capacity and preparedness of a country towards technology, is unfortunately the weakest component of the Philippines. The worst dip was registered on government prioritization of ICT that plunged 51 notches to No.95 in 2007. The variable, importance of ICT to government vision of the future slid 40 ranks to settle at No.88. These two indicators say much of the government’s weakness to include ICT as a driving force for the future.
However, before adapting new technologies, it is a requisite that a country must have a strong foundation such as basic education. Looking closely at the specific indicators, the Philippines’ quality of education has been slipping compared with the rest of the world. For one, the quality of math and science education fails miserably at No.107 with only a 2.81 score where the average stands at 4.07 score (from scale of 1 to 7). Meanwhile on the quality of educational system, the country’s 3.58 score falls short of the 3.69 average score. The quality of public schools only posted a 2.58 score, not even close to the 3.61 average score. Using this ranking as a basis, Zimbabwe, an African country, has better public schools than the Philippines. It now ranks No.86 in this category compared to the Philippines’ No.91.
The quality of management schools, which fared a respectable rank at No.46, actually fell 17 notches from No.29 in 2006. On a positive light, private company spending on research and development stepped up ten notches higher to No.56 compared to No.66 in 2006.
Curiously, the residential monthly telephone subscription indicator is noticeably low at No.105. However, this indicator is insignificant in the case of the Philippines because the popularity of mobile and wireless phones has displaced the need for a wired residential telephone service.
USAGE COMPONENT INDEX
The Usage Component rates a country’s actual adaptation and utilization of ICT by the citizenry, private sector, and the governing body. Of the three Usage Sub-Component Indexes, only the Individual Usage climbed up by 3 ranks. The other two sub-components namely Business Usage and Government Usage fell to No.56 and No.76, respectively.
A significant drop to No.91 (from No.77 in 2006) of Internet users could be attributed to the lack of personal computers in households. In the Philippines, most users are the youth who access the Internet in school or in Internet cafes. On the other hand, an area of improvement was reported in Internet bandwidth which hopped 13 notches to No.65 from No.78 in 2006. Nonetheless, data for both indicators need some updating.
Meanwhile, unresolved intellectual property rights issues and the prevalence of software piracy in the country caused the notable slide of prevalence of foreign technology licensing to No.56 from No.19 in 2006.
Other major regressions are in government success in ICT promotion which dropped to No.68 from No.44 in 2006, and ICT pervasiveness now at No.96 from No.77. Variables such as firm-level technology absorption, capacity for innovation, and availability of online services improved by 16, by 14, and by 13 ranks, respectively. These high-ranking variables show that much of the ICT success in the Philippines is market-driven or at least, initiated by telecom businesses.
CONCLUSION
In the Philippines, the liberalized telecommunications industry has paved the way in making technology available and affordable to the public. The government, on one hand, deserves the credit for recognizing that telecommunications is better off when it is in the hands of the private sector—let businesses invest and take care of the infrastructure and let the market dictate the price.
Competitive pricing has led to the successful penetration of mobile phone technology and thus reached even the farthest villages of the Philippine archipelago. However, SMS and call services comprise just one facet of telecommunications. Other mobile phones services such as sending e-mail, downloading data, and watching TV programs via phone are still expensive for an average Filipino.
Like the Philippines, majority of South East Asian countries has not made much movement in the Global IT rankings over their 2006 position. However, what is alarming for the Philippines is not only the poor execution of its ICT strategy, but more importantly the lag and inadequacy in basic needs such as quality of public schools, electricity production, and effectiveness of law-making bodies among others.
