Transforming the Philippines into Asia’s Fifth Tiger

The Manila Times
April 16, 2016

Harold J. Raveché, Ph.D.


The Philippine archipelago has the potential to leap-frog economically with new governmental leadership and private sector commitment.

Often overlooked, the country has the potential to take its place among other strong Asian economies. But not without well-overdue reforms and a long-term strategy to grow the economy.

Manila is my base for business in South East Asia. I have spoken globally on entrepreneurship and innovation at private and public universities. I have also met with numerous business leaders as well as elected officials, while visiting cities from Davao and Cebu to Batangas and Loag.

My paternal grandfather immigrated to the US from the City of Cavite. The Philippine Island of Bataan is the crash site of my late Naval aviator father, who served during World War II.

When I visit the Philippines today, I feel the energy. From taxi drivers and shop owners, to professors, students and executives, there is a deep yearning for transformational change.
The cities, towns, provinces of the Philippines are transforming into Asia’s Fifth Tiger.

There is work to be done. World Bank 2016 data estimate that the Philippines’ $7,846 GDP per capita will be one-sixth of Taiwan’s, which is the lowest among the Four Tigers (Taiwan, along with Hong Kong, Singapore and South Korea).
Still, the economic infrastructure is real.

By building on existing economic hot-spots, and implementing educational and R&D strategies to drive entrepreneurship and innovation, there will be better salaries and more jobs. Numerous societal benefits will be forthcoming, ranging from inexpensive dwellings that withstand yearly coastal hurricanes, to methods to improve water resources, to lower-cost and more abundant electrical power. New technologies for export will be developed by tech-savvy Filipinos.

A coherent, focused strategy must follow the impending national elections.

Here are some ingredients that would make for that effective strategic approach.

Accelerate basic-skills training. Manila’s many thousands of street-dwellers can hold steady wage manufacturing positions. As poverty is alleviated, today’s rampant robberies, as well as the related illegal drug usage, will be reduced. The country will appear more desirable to tourists, who can help fuel the economy.

Return the US Navy to Subic Bay. Doing this will present many opportunities that will benefit both nations – while also spurring Foreign Direct Investment. The $5 billion Philippine shipping industry can get a further boost through ship repair and manufacture of significant components for Navy vessels through partnerships with the large US defense industries.

Build a highly trained cyber workforce. Skilling up in defense, offense and analytics can also help the Philippines become a trusted partner of the US and its allies. In February 2015, the Los Angeles Times estimated that the Philippines BPO (Business Processing Outsourcing) sector will generate $25 billion in 2016 revenue and employ more than one million Filipinos. Strength in cyber security will give this burgeoning BPO industry, driving further growth while allowing a distributed workforce for much-needed employment in remote regions.

Borrow better ideas about innovation from Taiwan and Singapore. Taiwan, long ago, invested in Science Parks and Applied Science Centers, linked by high-speed rail, to drive the growth of industry and jobs. Singapore’s foresight in establishing in 2009 the new “Singapore University of Technology and Design,” to drive innovation by not having traditional academic departments, is also an example for the Philippines.

The Philippines’ wealthier families, like those in the US who helped launch Stanford and MIT, also need to play a role.

Only the wealthy can effectively establish a new private university (initially graduate-level, for more immediate impact), devoted to innovation in science and engineering, with an MBA in Entrepreneurship and Innovation.

This new university should serve as the Philippines Incubator for High-tech Startups, leveraging university research from across the nation. Patent and copyright protection, as well as experienced mentors for startups, are needed. Early-stage, high-risk investment capital must include tax benefit incentives.

The Department of Science and Technology and the Commission on Higher Education need to be reformed with new leadership, mandates and budgets to drive technological innovation. Strong leadership is also needed at each university, as faculty have little experience in innovation.

If such initiatives are forthcoming from the next government and the private sector, the Philippines will earn its stripes, and become Asia’s Fifth Tiger.

The only question: How soon?


Harold J. Raveché, Ph.D., is President of Innovation Strategies International and the former President of Stevens Institute of Technology.