Transcript Business and Economic Outlook

The Philippines in the
New Asian Economic
Dynamic
Perspectives from Robert Eberhart, Fellow
Stanford’s Program on Regions of Innovation and Entrepreneurship
The Philippines in context
• The Philippines is experiencing profound changes in its
national environment
• China is developing and asserting national ambitions, but
development will not be straight -line or calm
• Japan and the US are experiencing a search for a new
“normality” in economic and political realms
• Global access to information an knowledge here-to-fore
accessible to only a few is affecting the Philippines
•
•
News will outrun formal news services
Political interest groups will form and move faster than
governments
• How can the Philippines prosper in this context?
Business and Economic
Outlook
• Continuing Effects from the Financial Crisis
• The Evolution of Economies
• Advanced economies
•
•
•
•
Declining birth rate
increasing concentration of wealth
Retention of the top of the value chain
Loss of mid-level skilled employment
• Developing economies
• Increasing share of the global economy
• Political challenges as wealth increases aspirations
• Resource constraints
• Proliferation and Development of the Global Supply Chain
2008/04
2007/03
2006/02
2005/01
2003/12
2002/11
2001/10
2000/09
1999/08
1998/07
1997/06
1996/05
1995/04
1994/03
1993/02
1992/01
1990/12
1989/11
1988/10
1987/09
1986/08
1985/07
1984/06
1983/05
1982/04
1981/03
1980/02
1979/01
Supply Chain
Japan Trade with US
1.8E+09
1.6E+09
1.4E+09
1.2E+09
1E+09
800000000
Exports
Imports
600000000
400000000
200000000
0
2008/04
2007/03
2006/02
2005/01
2003/12
2002/11
2001/10
2000/09
1999/08
1998/07
1997/06
1996/05
1995/04
1994/03
1993/02
1992/01
1990/12
1989/11
1988/10
1987/09
1986/08
1985/07
1984/06
1983/05
1982/04
1981/03
1980/02
1979/01
Supply Chain
Japan Trade with China
1.6E+09
1.4E+09
1.2E+09
1E+09
800000000
Exp-105
Imp-105
600000000
400000000
200000000
0
Strategies For
National Growth
• Improving Factor Inputs
•
•
•
Trade and Comparative Advantage
•
•
•
Action
• Increase amount and/or quality of labor and capital
Result:
• Improved productivity
Action:
• Reduce import substitution rules and increase exports, sell currency, acquire part
of global supply chain
Result
• Increase of world market share of products and increase in GDP
Innovation and Entrepreneurship
•
•
Action
• Create favorable Habitat for Innovation and Entrepreneurship
Result
• Increase in new business formation both within companies and in formation of
new companies
The “Habitat” for Regional
Entrepreneurial Development
• Technology entrepreneurship:
• Occurs in a framework of ways of doing things, the
“Habitat”
• The Habitat is the rules and institutions within which
the ecosystem of entrepreneurship develops
• The Habitat consists of:
1. The global marketplace for goods and services
2. Networks of local, family and national relationships
3. The Business Infrastructure of laws and habits
4. The Hard Infrastructure
5. Finance: Venture Capital and Angels
6. Universities and Research Institutes
The Tech Entrepreneurial
Habitat
A Habitat for
Entrepreneurship
• Visitors to Silicon ask how it works. Most of them
focus only on one part of the picture and miss many
key points. Among key misunderstandings:
• Science Parks. If they do not set the right conditions and
recruit visionary companies into the park, they become
only real estate developments.
• University technology transfer programs. Often subvert
the purpose of a university transforming it into a research
lab for large firms
• Start Venture Capital Firms. If they do not have the
right regulatory regime, the venture capital companies
just become banks or AppleCorp
Entrepreneurial
Habitats
Entrepreneurship Dimension
Favorable and rational rule of law
Knowledge intensity
High quality, mobile workforce
Results oriented meritocracy
Climate that tolerates failure
Open business environment
University / Industry collaboration
Business / gov’t / non-profit collaboration
High quality of life
Specialized business infrastructure
SV
Japan
China
Phil.
The Choice
• So, what path with the leaders, businesspersons, and
people of the Philippines take toward greater economic
prosperity:
• A unique but efficient semi-isolated economy?
• The supplier of low value add segments of the global
supply chain?
• An innovative economy with the high turnover and high
potential returns of technology entrepreneurship?
• The many choices in front of you ... are yours!