PHL an ‘outperformer’ in frontier technology

By Arjay L. Balinbin, Senior Reporter

THE Philippines is considered among developing countries that performed better on frontier technologies than their per capita gross domestic product (GDP) would suggest, a 2021 report by the United Nations Conference on Trade and Development (UNCTAD) showed.

UNCTAD’s “Technology and Innovation Report 2021” released on Thursday identified developing countries that have performed better on frontier technologies than their per capita GDP.

Frontier technologies include artificial intelligence (AI), the internet of things (IoT), big data, blockchain, 5G, 3D printing, robotics, drones, gene editing, and nanotechnology.

“The extent of ‘overperformance’ is measured as the difference between the actual index rankings and the estimated index rankings based on per capita income… The greatest overperformer is India, by 65 ranking positions, followed by the Philippines by 57,” UNCTAD said.

The Philippines was followed by Ukraine, with an actual ranking of 47, Vietnam (45), and China (40).

The UNCTAD report scored countries on their readiness for frontier technologies based on five building blocks: information and communications technology (ICT) deployment, skills, research and development (R&D), industry activity and access to finance.

The Philippines also has a high ranking for industry.

“This reflects high levels of foreign direct investment in high-technology manufacturing, particularly electronics,” it added.

Multinational businesses are attracted by the Philippines’ “strong” supply chains and “solid” base of parts manufacturing, UNCTAD said.

“The Philippines also has pro-business policies along with a skilled, well-educated workforce and a network of economic zones,” it added.

However, the top overperforming developing countries, including the Philippines, have lower rankings for “ICT connectivity and skills.”

Developing countries need to work towards “universal internet access and ensure that all their citizens have opportunities to learn the skills to be more ready for frontier technologies,” it said.

In the Philippines, there are generally wide urban-rural disparities in terms of connectivity as shown in the recent analysis by Asian Development Bank and Thinking Machines Data Science, Inc., where nearly a million Filipinos in rural areas do not have access to digital connections, as most cell towers are located in wealthy cities.

According to the UNCTAD report, top overall performers on the adoption of frontier technologies are wealthy nations: United States, Switzerland, United Kingdom, Sweden, and Singapore, among others.

“The top overall performers have well-balanced performances across all building blocks of the index and are typically associated with high innovation and GDP,” it said.

Sought for comment, Terry L. Ridon, convenor of InfraWatch PH,  said he was not surprised.

“This is not surprising given that the Philippines ranks next to India in the global outsourcing industry, which uses various emerging technologies to improve operational efficiencies, such as artificial intelligence, blockchain and big data. Global cloud services led by Amazon Web Services have offices in major Philippine cities,” he said in a phone message.

Mr. Ridon said Filipinos have spearheaded the adoption and consumption of new technologies, such as 5G, drones, and IoT gadgets.

“Through a handful of domestic solar companies, we manufacture our own solar panels instead of full importation. Our top exports have always been in the semiconductor sector in the last decade,” he explained.

The Philippines’ performance should mean that these sectors remain “very competitive areas,” which the government should help further develop, Mr. Ridon said.

He noted the BPO sector contributes at least 7% of the country’s GDP, or $26 billion. “This should only mean a continuing upward trend in these high-growth sectors, which had continued to sustain growth despite the coronavirus pandemic and contributed to the job security of BPO employees.”

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