ICT imperatives

International market research firm IDC in a report released yesterday recommended a number of key areas which the next administration should focus in order to assist the information and communications technology (ICT) sector to continue its upward trajectory.

First, is the establishment of the Department of Information and Communications Technology (DICT) which is crucial to ensure that the ICT sector, which is among the most profitable divisions of the local economy and one of the top drivers of employment growth and is projected to contribute $50 billion in revenues this year, will be secure in the upcoming years, IDC said.

IDC Philippines associate market analyst Sean Paul Agapito said that the DICT will be the primary government entity to plan, promote, and help develop the country’s ICT sector and address issues concerning Internet connectivity, communications services, data privacy, cybersecurity, and cybercrime — functions that are currently divided among several disparate agencies.

Second is the development of large-scale ICT initiatives. IDC emphasized that compared to other ASEAN countries, the Philippines is still waiting for large-scale initiatives that could greatly impact the ICT market.

IDC analyst Alon Anthony Rejano noted the need to support the local ICT vendor to gain a strong foothold in the local, regional, and global scenes so that their top-notch IT skills can be recognized.

He said government should also support ICT adoption in non-IT industries such as resources and agriculture and that a vision of digital agriculture in the long term is needed. Imagine a farmers sitting at their homes waiting for a message on their smartphones saying their crops can now be harvested.

But he stressed that this process should be done gradually and that collaboration between the public sector and service providers will be the most important stage right now.

Third is the need to address the country’s connectivity problem on a major scale which can be achieved by government imposing new regulations to accelerate the internet connection development in the country and penalizing telecommunications companies that are unable to deliver internet speeds as promised.

Rejano added that support for the global telco in the Philippine market is also needed to spur competition which will ultimately give consumers better services at lower cost. But in the same vein, the government should endeavor to shorten the starting business process in the country and cut red tape surrounding the establishment of telco infrastructures such as cell sites and fiber builds, he pointed out.

Fourth is the need to take cybersecurity more seriously. IDC said the online leakage by hackers of the confidential information of Filipino voter’s highlights how the Philippines is lacking in terms of cybersecurity.

Fifth recommendation by IDC is placing a bigger focus on the business process outsourcing (BPO) industry in the country which is expected to surpass the gross domestic product (GDP) contribution of OFWs.

With the gradual change from traditional voice services to higher-valued services such as knowledge process outsourcing, the government must address the shortage of skilled labor and professionalize the industry, such as by collaborating with education agencies such as the Department of Education and the Commission on Higher Education to align the curriculum with the demands and requirements of the IT sector, IDC stressed.

Sixth is the provision of greater support to Smart City initiatives, most of which are still stuck at pilot testing stage due to local government budget constraint.

Seventh is developing small and medium enterprises in the ICT market through effective government funding, legal certainty, low-tax system, and a readily available workforce.

Last is the need to improve peace and order in the country, especially with foreign investors eyeing Mindanao as their next investment area.

IDC Philippines country head Jubert Alberto said IDC expects the total ICT spending growth in the country this year to be 8-10% and that barring any major wildcard events such as natural disasters, a worldwide recession and political revolution, the country’s ICT sector is headed toward a positive ICT outlook at the end of 2016 and beyond.

Alberto noted that although there may be short-term uncertainties, the country’s momentum toward ICT adoption is well on its upward track, brought on by the rise of millennials, disruptive technologies, the impact of the BPO industry, demands from SMEs, and the impact of next-wave cities.

For comments, e-mail at [email protected]