Four tech trends to propel the Philippines into its next wave of growth – BusinessWorld Online


Over the next 10 years we will experience unprecedented technological progress. A potent mix of massively enhanced computing power, automation, and smart technologies is set to reinvent a wide range of industries as part of the so-called Fourth Industrial Revolution or Industry 4. 0. While this has the potential to cause significant disruption by reshaping whole companies and markets, it also promises significant GDP growth.

In the Philippines, the government’s National ICT Ecosystem Framework lays out the country’s roadmap in order to developing the digital economy, which will be anchored on five interdependent pillars: talent and skills, accessibility, platforms, infrastructure, and standards plus regulations. Realizing this roadmap would be a significant boost to the economic climate — a recent study commissioned by Google finds that digital transformation can unlock $101. 3 billion in the Philippines by 2030.

Our perspective is that four rapidly emerging technology growth engines are likely to be especially significant along the path to achieving these goals: the future of connectivity (5G and the Internet of Things or IoT), applied artificial intelligence (AI), distributed infrastructure (cloud computing), and automation.

The pandemic has accelerated digital uptake across the globe, with the Philippines showcasing a similar trend: the number of Filipino internet users tripled to 73 million in 2020 from 23 million in 2010, according to the particular World Bank’s Philippines Digital Economy Report 2020. However, while COVID-19 has hastened digital adoption, the country still lags behind its regional peers: internet services are comparatively more expensive with slower broadband speeds plus unequal access due in order to a lack of competition and limited infrastructure. Importantly, the accessibility, affordability, and quality associated with broadband is usually likely to determine the speed of uptake plus development associated with the other technologies given that it serves as the particular key driver of the other technological trends.

In light of these limitations, the particular government is definitely looking in order to boost connection with a National Broadband Plan that seeks to foster faster deployment of electronic infrastructure, especially in remote areas, and a free wi-fi program to provide free internet access in public areas.

Today, the industry is looking to incorporate sensors and other devices across networks as part of the Internet of Things (IoT). It is accelerating the 5G rollout, enabling networks to bring new applications to customers. Globe Telecom has set up 5G coverage throughout 1, 906 sites nationally, allocating P76 billion ($1. 5 billion) in capital expenditure for fiber and 5G network expansion. Infrastructure advances have enabled Union Bank to become Globe’s first 5G-powered bank, while Apper. ph’s partnership with Globe is arranged to test console-less gaming using cloud technologies and 5G. Similarly, PLDT’s Smart brand rolled away its Smart 5G nationwide in July 2020, launching the first 5G-powered e-sports hub, as well as a 5G-powered sports broadcast for the Philippines Basketball Association.

Artificial intelligence (AI) is regarded simply by many governments as a nation-defining capability. Our research suggests that, by 2024, a lot more than 50% of user interactions will be augmented simply by AI-driven speech, written word, or computer-vision algorithms. Rapid adoption associated with AI and its applications has gone hand-in-hand with the accelerated digital uptake spurred by the particular pandemic because organizations possess sought to identify levers to spark their next wave of growth.

The value of AI has not gone unseen. In the Philippines, the particular Department associated with Trade offers created the roadmap to realize the possible of AI and establish the country as an AI hub within the region. As part of this particular, the government provides established the private sector-led National Center for AI research (NCAIR) to spearhead the country’s research plus development efforts on AI and in nurturing and developing AI talent within the nation.

On the industry side, we are already seeing moves from sectors that will certainly be significantly affected by the ownership of AI such as high tech plus telecom, financial services, manufacturing, transportation and logistics, healthcare, and education.

Examples include Medgate Philippines’ incorporation of AI into its telemedicine platform to create AIDA, a chat-bot system that helps patients in order to self-triage plus assess risk factors to determine whether they should seek a teleconsultation, visit the clinic, or even go to an emergency room. In banking, Union Bank plans to use AI in order to tailor product and service recommendations to customers simply by analyzing their profile and previous transactions.

Disruptions resulting from the effective implementation associated with AI will see labor displacements from repetitive tasks, faster development cycles for new applications, plus more detailed customer insights for businesses; at the particular same time, there will be a good increasing need for highly specialized services and talent.

To help firms adjust, develop brand new technologies, plus use computational tools (especially AI), the NCAIR has been created in order to support micro, small, and medium enterprises (MSMEs).

A dispersed IT infrastructure helps companies stretch their own computing power to the edge of their particular networks, expanding reach to data-hungry devices across a large number of  dispersed locations along with less latency, while supporting faster decision making with on-demand advanced analytics.

Although far through mature here in the particular Philippines compared to other countries, the switch to cloud plus edge processing looks set to accelerate, given recent government initiatives, a young talent pool, and facilities developments. Enterprise-cloud spending can be anticipated in order to reach $2. 6 billion by 2024, up from $1. 8 in 2020, according to the study through GlobalData.

More recently, major business players like Alibaba Cloud have expanded their footprint in the Philippines: with regard to instance, using the establishment in 2020 of the Philippines Ecosystem Alliance to promote cloud re-homing and analytics amongst local businesses. Alibaba Cloud is also set to open a data center here by the end of 2021, with plans to develop Philippine talent simply by training 50, 000 nearby IT professionals and provide 5, 000 businesses online by 2023.

Process automation and virtualization, which combines the particular Industrial Web of Points (IIoT), robotics, digital twins, and additive manufacturing, is certainly set in order to revolutionize employment. The Asian Development Financial institution anticipates that a quarter of jobs within outsourcing plus electronics is going to be shed due to automation; however , this may be offset by new roles within those industries.

Responding to the anticipated disruption from automation, the Philippines Skills Framework Initiative prioritizes abilities development in the most vulnerable industries: construction, creatives, food, health and wellness, IT-BPM, strategies and supply chain, manufacturing, and tourism.

We can expect these four tech styles to bring far-reaching changes regarding Philippine businesses, industries, and markets — and across the wider society. These fast-moving technology trends can bring growth plus competitive advantage for organizations prepared in order to embrace these types of changes. Consumers also stand to benefit, with novel and more affordable services and applications — in healthcare, entertainment, plus finance intended for instance — and within the creation of new areas of work. At the particular same period, it will remain vital to get all stakeholders to assess and mitigate business, operational, compliance, legal, and societal risks within the context of these profound technologies shifts.

Jon Canto is interim managing partner for that Philippines at McKinsey & Company.