the philippine entrepreneurship...
TRANSCRIPT
ASSESSING THE PHILIPPINE ENTREPRENEURSHIP ECOSYSTEM Andres. F. Garcia
Sr. Economist
Inclusive Innovation Conference
October 2nd, 2018
This Photo by Unknown Author is licensed under CC BY
MEET CIELOMONTEVERDE
2021
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HOW STRONG IS THE PHILIPPINE ENTREPRENEURSHIP ECOSYSTEM?
United States 1
Switzerland 2
Canada 3
United Kingdom 4
Australia 5
Denmark 6
Iceland 7
Singapore 27
China 43
Malaysia 58
Thailand 71
Philippines 84
Vietnam 87
Indonesia 94
MOST ENTREPRENEURIAL
COUNTRIES
PHILIPPINES AND
ITS NEIGHBORS
Rank Rank
Source: The Global Entrepreneurship Index, 2018.
Ranking includes 137 countries
Over half of the world has a stronger entrepreneurship ecosystem
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…HOW EFFECTIVE IS THE PHILIPPINE ENTREPRENEURSHIP ECOSYSTEM?
For every 1 million
working age population…
New firms born in 2016
300
2,300
Source: World Bank. 2018. World Development Indicators Business Density
1,000
The Philippine ecosystem suffers from a low firm birth rate
4
…HOW INCLUSIVE IS THE PHILIPPINE ENTREPRENEURSHIP ECOSYSTEM?
Source: World Bank. 2018. Productivity and Growth Report
0100200300400500600
Tho
usa
nd
s
Services: VA per Worker by Region, 2015(in Php, Constant 2000 Prices)
Some subnational ecosystems lead to higher productivity levels
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ASSESSING THE ECOSYSTEM USING THE WORLD BANK’S ENTREPRENEURSHIP DIAGNOSTIC TOOLKIT
Policy
FinanceCulture
Supports
Human Capital
Markets
Source: Babson Entrepreneurship Ecosystem Project.6
POLICY
-30
-20
-10
0
10
20
30
40
50
Burden of governmentregulations Hiring and firing practices Competition Impact of biz rules in FDI
Diffe
rence w
ith w
orld a
vera
ge s
core
s (
%)
Indonesia Malaysia Philippines Thailand Viet Nam
Source: WEF, 2017. World Competitiveness Report
It’s less bureaucratically fun in the Philippines
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SUPPORTS
Sources: Author’s elaboration based on information provided in the QBO/PWC “Off to a great start: 2017 Philippine Startup Survey”, VMWare Cloud Index, and data collection.
2005 2011 2012 2015 2016 2017
April:Philippine Emerging Startups Open
October:Startup Weekend
March:Kickstart Ventures begins investing
March:Ideaspacelaunches
January: Google Manila opens
September: Geeks on a Beach launches
January: Endeavor enters the PH market
June: SlingshotMNLdebuts
August: Philippine Startup Roadmap was unveiled
February: Palawan ITBI and Startup Hub launches
August: QBO Innovation Hub launches
2013
January: PLDT Voyager Innovations and Google Launchpad Accelerator Program launch
March: PwC Philippines launches Venture Hub
2018
May: Senate approves Innovative Startup Act
Support mechanisms have increased over time. Time to take stock and coordinate.
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FINANCE
Source: World Bank, 2015. Enterprise surveys.
Access to finance might not be a major constraint
but few firms use banks to finance investments
17
1211
2
11
3735
1215
29
Indonesia Malaysia Philippines Thailand Vietnam
Sha
re o
f fi
rms
(%
)
Firms identifying access to finance as a major constraint
Firms using banks to finance investments
In 2017, Philippine tech startups attracted
a small share of regional investment
Source: CB Insights, 2017 (Jan-Sept).
100 deals
$18 million
310 deals
$3 billion
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- Lots of firms offer training to their full time
employees
60% 19%
- Neighboring countries spend more than the
Philippines on software
50% 33%
HUMAN CAPITAL
Skills of today are above average but
they are not fully ready for the future
-30
-20
-10
0
10
20
30
Skills of current workforce Skills of future workforce
Diffe
rence to w
orld a
vera
ge s
core
s (
%)
Indonesia Malaysia Philippines Thailand Vietnam
Source: WEF, 2016. World Competitiveness Report
Filipino firms train a greater portion of their
employees, but don’t spend much on software
Source: Cornell, INSEAD, WIPI, 2018. Global Innovation Index10
Source: Global Entrepreneurship Monitor, 2015
-80
-60
-40
-20
0
20
40
60
80
Perceivedopportunities
Perceivedcapabilities Entrepreneurial spirit Innovation High Status
Diffe
rence w
ith w
orld a
vera
ge s
core
s (
%)
Indonesia Malaysia Philippines Thailand Vietnam
The perceived Filipino entrepreneurial traits are above world averages
CULTURE
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CULTURE
Connected Filipinos are world leaders on
internet usage and social media…
On average, every day
Filipinos spend:
- over 9h on the internet,
the 2nd most worldwide
- over 4h on mobile internet
- nearly 4h on social media,
the world’s leader, including
67m Facebook users
Thailand 62
Malaysia 59
Vietnam 47
Indonesia 40
Philippines 39
%
SHARE OF PEOPLE
BUYING ONLINE
Source: We are Social, 2018. Digital Report.
…but they make less online purchases
than their neighbors
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MARKETS
Source: Google Temasek, 2017
…the Philippine e-commerce retail market
will grow to nearly $10b in 2025
0
2
4
6
8
10
2015 2025
USD
billions
40%(CAGR)
Singapore 1,861
China 634
Thailand 199
Vietnam 160
Malaysia 74
Philippines 38
Indonesia 32
USD
DIGITAL PURCHASES
PER BUYER
Source: Accenture. 2017. Insights to Digital CommercePer capita digital purchase
Despite the low level of online purchases
made by Filipinos nowadays…
13
Malaysia 26
Singapore 24
Indonesia 28
China 32
Thailand 39
Vietnam 47
Philippines 51
BUSINESS CONNECTING
TO CONSUMERS THROUGH
THE INTERNET
Rank
Source: WEF. 2016. Global Information Technology ReportInternet use for business-to consumer transactions ranking (Out of 139)
Few businesses are ready for the digital
economy
MARKETS
Online participation is currently
constrained by high prices
53% of people using cellphones
do not access the internet.
Mobile internet is nearly 3x more
expensive than in Malaysia.
24% of households have broadband.
Broadband internet is over 6x more
expensive than in Malaysia.
Source: ITU, 2017. Measuring the Information Society Report.
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LET’S MAKE CIELO’S DREAM
A REALITY
2021
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