the philippine entrepreneurship...
TRANSCRIPT
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ASSESSING THE PHILIPPINE ENTREPRENEURSHIP ECOSYSTEM Andres. F. Garcia
Sr. Economist
Inclusive Innovation Conference
October 2nd, 2018
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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
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…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
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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
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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…
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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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