28 October 2020 via Facebook Live
Ladies and gentlemen, magandang araw po sa inyong lahat.
Thank you to the organizers of the Manila Panel on Digital Economy/ ICT for giving me the privilege of speaking at this forum of the Regulatory Reform Support Program for National Development (RESPOND).
As we adjust to the “New Normal” and gradually reopen our economy, we’re also seeing a greater shift in digital transformation in our country today. As such, we believe this transformation should be integrated in our economic recovery efforts so that we can have a more inclusive “Better Normal” instead.
The acceleration of digitalization in all sectors of the economy also supports the innovation agenda of the Department of Trade and Industry (DTI). We’re confident that with innovation, the Philippines can become a more inclusive economy in the post-COVID era—while also making our country “future-ready” for the Fourth Industrial Revolution.
Under Industry 4.0, companies need to prepare for the “Hi-Tech No-Touch” Era with powerful technologies like artificial intelligence (AI), Internet-of-Things (IoT), blockchain, and robotics. We’re already seeing many businesses limiting human-to-human interaction by utilizing chatbots powered by AI. During the pandemic, AI was also useful in contact tracing, health assessment and monitoring.
The varied uses of AI demonstrates how Industry 4.0 technologies can enable businesses to maximize opportunities from the development of new products, processes, and business models. More importantly, as companies adopt new technologies, they should also fully embrace Industry 4.0 to ensure not only their survival but also their relevance in the post-pandemic landscape.
Why? Statista projections indicate that the Philippine e-commerce market revenue spiked up to US$3.37M in 2020, or a 35.4% growth year-on-year. User penetration of the e-commerce market is estimated to be at 38.9M with a 12.5% increase year-on-year. A Rakuten Insight survey also notes that 31% of consumers have utilized digital platforms to purchase goods several times in a month.
This shows that many of our consumers have resorted to e-commerce to cope with the mobility restrictions due to the community quarantine. The “New Economy” of digital or e-payments has expanded due to the restrictions of containing the COVID-19 outbreak.
This, in turn, has greatly affected businesses with consumer changes in shopping behavior, purchase, and payment preferences. Despite limitations in our technology infrastructure, more businesses are conducting their businesses online amidst the pandemic. In fact, there’s been an upward trend in the number of registered businesses engaged in online selling. For the period of March 15 to October 25 of this year, there were 81,981 businesses as compared to only 1,753 for the period of January 1 to March 15.
The increasing popularity of e-commerce platforms has also spilled over to services platforms. These have paved the way for increased business activity of startups offering on-demand services with logistics platform, such as those in food, medicine, and groceries delivery. Likewise, innovative startups are now offering learning, social gathering, events, and marketplace platforms in response to the demand to sustain social connections and access the market despite physical limitations.
COVID-19 has highlighted the importance of utilizing advanced technologies and embracing digitalization. Businesses must invest in these technologies and capacitate or reskill/ upskill their workers. But they also need to go beyond simply digitalizing business processes and operations and undergo a digital transformation.
To ensure there is an enabling environment for the local innovation and entrepreneurship ecosystem, the government has formalized its commitment to innovation as a state policy. Republic Act (RA) No. 11337 or the Innovative Startup Act, and RA 11293 or the Philippine Innovation Act help to create this environment by providing the necessary incentives and programs.
Likewise, DTI’s Inclusive Innovation Industrial Strategy (i³S) is aimed at growing the global competitiveness and innovativeness of our industries. Further, i³S puts innovation at the heart of the country’s industrial strategy to address the challenges brought by Industry 4.0. As part of i³S, the Regional Inclusive Innovation Centers (RIICs) connects local innovation ecosystems including the strengthening of the linkage between industry & research sector and the academe, to produce innovation, market driven R&D, research commercialization, new products and services, and new business in the regions.
We are also crafting several Roadmaps focusing on Industry 4.0. There is the Industry 4.0 Roadmap with its strategic framework for industrial innovation, the DTI-Siemens Industry 4.0 Roadmap aimed at the manufacturing industry, and an AI Roadmap to provide an analysis of the impact of AI technologies on the country. Moreover, DTI partnered with SkillsFuture Singapore (SSG) to create a Philippine Skills Framework to reskill or upgrade the skills of our workforce.
To enable our industries for digital transformation in both the short- and long-term, DTI has implemented several initiatives. For example, we’ve established an SME Academy and Innovation Center to enhance manufacturing innovation and human resource capabilities for our smaller enterprises. We’re also planning to build an Industry 4.0 Pilot Factory to serve as a demonstration and training hub for Industry 4.0 technologies and solutions.
Supplementing this is our Securing Manufacturing Revitalization and Transformation (SMaRT) program, a fiscal and non-fiscal support program for the manufacturing sector to engage in innovation and digital transformation. Lastly, our Electric Vehicle Incentive Strategy (EVIS) will enable the transition of our transport sector from traditional motor vehicles to electric vehicles.
To reiterate, whether we wanted to or not, COVID-19 has forced our country to embrace Industry 4.0 technologies. But if we really want to ensure our country’s economic recovery, we need to realize the innovative opportunities inherent in the Fourth Industrial Revolution.
In doing so, we can generate better employment opportunities for our people, more entrepreneurial activities, and sustainable economic prosperity for our country. More importantly, we are “Building Back Better.” By building a “Better Normal” instead of settling for the “New Normal,” we can provide our people a better quality and more comfortable life as promised by President Rodrigo Roa Duterte.
Maraming salamat po at mabuhay tayong lahat.♦
Date of Release: 29 October 2020