By: Francis Allan L. Angelo
BUSINESSES and regional economies like Western Visayas should be attuned to geopolitical and technological changes if they want to survive the Fourth Industrial Revolution (FIRe).
“No tech, you’re toast,” was the caution raised by Calixto “Toti” Chikiamco, a political economist and president of the Foundation for Economic Forum during the Security Bank Economic forum at Courtyard by Marriott-Iloilo on June 20, 2019.
Chikiamco said geopolitical events like the US-China trade wars will have significant effects on the Philippine economy while at the same time offer opportunities to regional growth areas like Western Visayas.
“The US-China trade war is the new cold war. It covers cyber espionage and trade,” he added.
Chikiamco said the trade war has forced many companies to relocate from China to other Southeast Asian nations such as Thailand, Malaysia, and Singapore.
“Some companies are moving out of China but the Philippines is only getting a handful of them. We should be getting more by adjusting some economic policies like our minimum wage which is very high,” he said.
Chikiamco also pointed out that “digital strategy is key to business survival,” especially in trade, amid the so-called Fourth Industrial Revolution (FIRe).
FIRe refers to technological and internet-based innovations that merge with humans’ physical lives such as voice-activated assistants, facial ID recognition and digital health-care sensors.
Given his investments in a tech company, Chikiamco told Ilonggo businessmen that they should start embracing technological innovations in moving goods and financial systems.
He cited tech companies that disrupted or upended traditional business models:
- AirBnb for hotels,
- Grab and the likes in taxis and transportation,
- financial technology for banks,
- e-commerce like Lazada for malls,
- robotics and 3D printing for manufacturing,
- drones and robots in delivery/logistics,
- automated vehicles and electric cars for automobiles, and
- massively open online courses for education.
Even smartphones have affected the sales of traditional camera brands because of better photography technology that fits in our hands.
Given the major disruptions in traditional businesses and industries, Chikiamco said human resources must also adjust as a slew of low- and high-end jobs are at risk, especially in the age of artificial intelligence (AI).
Some of these “AI-threatened” jobs are telemarketers, bookkeepers, couriers, proofreaders, radiologists, financial advisers, legal researchers, among others.
Aside from technology, Chikiamco said migrant labor will remain a trend because major Asian economic centers such as Japan, China, Thailand, and South Korea are rapidly ageing.
The Philippines, on the other hand, is a “demographic sweet spot” because its median age is 23, which is a boon to consumption and labor resources. Compared to other countries, Thailand’s median age is 37.8 while Japan is at 47.
Japan is experiencing rapid ageing; especially among its farmers whose median age is 67 (six out of 10 Japanese farmers are over 65).
This ageing scenario presents opportunities for the Philippines, especially in labor and agricultural goods exports.
But there is a caveat, Chikiamco said: 30 percent of Filipino children are stunted due to malnutrition, a problem that could affect the human resources pool in the coming generations.
In sum, Chikiamco said Iloilo and Western Visayas are in a position to take advantage of FIRe and geopolitical changes on the following basis:
- good infrastructure
- excellent educational institutions and highly skilled workforce
- tourism attractions
- history of industrialization.
Earlier, the Department of Science and Technology (DOST) urged the academe and researchers in the region to explore artificial intelligence and space technology in research and development.
DOST Secretary Fortunato Dela Peña assured that they will continue to support SUCs through research grants and involving them in R&D but he emphasized that the region should also look into new areas of science and technology (S&T).
“We have ongoing projects and research programs with the schools that I mentioned and tuloy ang support natin dyan, tuloy ang support natin sa pharmaceuticals and I think we should look at certain new areas like in the area of artificial intelligence, even involving them in space technology program that we have,” he said.