From information to knowledge
From information to knowledge
Updated 09:39pm (Mla time) Oct 28, 2004
By Michael Tan
Inquirer News Service
Editor's Note: Published on page A15 of the October 29, 2004 issue of the Philippine Daily Inquirer
THINK of the country's top corporations and you usually think of oil companies, utility firms, banks, and food manufacturers.
For the last three decades or so, these companies have indeed been consistently among the leaders in business. But the BusinessWorld newspaper's latest yearbook on top corporations in the Philippines, released on Wednesday, reveals a major change, with information technology firms now dominating the economic scene.
For purposes of comparison, look at the 10 leading companies in 2000, based on total sales: (1) National Power Corp., (2) Manila Electric Co., (3) San Miguel Corp., (4) Petron Corp., (5) Texas Instruments Philippines Inc., (6) Pilipinas Shell Petroleum Corp., (7) Philippine Long Distance Telephone Co., (8) Caltex Philippines Inc., (9) Nestlé Philippines, (10) Ayala Corp., (11) JG Summit Holdings Corp., (12) Philippine Airlines, (13) Zuellig Pharma, (14) Coca-Cola Bottlers, (15) Mercury Drug, (16) Philippine Associated Smelting and Refining Corp., (17) RFM Corp., (18) Procter and Gamble Philippines, (19) Unilever Philippines, and (20) Purefoods Corp.
For 2003, which was the focus of BusinessWorld's yearbook, we have the following leading 20 companies: (1) Texas Instruments Philippines Inc., (2) Toshiba Information Equipment, (3) Manila Electric Co., (4) National Power Corp., (5) Petron Corp., (6) Pilipinas Shell Petroleum Corp., (7) Philippine Long Distance Telephone Co., (8) Caltex Philippines Inc., (9) Nestlé Philippines, (10) Globe Telecom Inc., (11) Smart Communication Corp., (12) San Miguel Corp., (13) Philippine Airlines, (14) Mercury Drug, (15) Panasonic Mobile Communications, (16) Philips Semiconductors, (17) Fujitsu Computer Products, (18) Metropolitan Bank, (19) Coca-Cola Bottlers, and (20) Hitachi Global Storage Technologies.
Note that eight of the top 20 companies are involved in information technologies, six of them as manufacturers of semiconductors and computers, and two (Globe and Smart) involved in mobile phone services.
Loose change
Does all this mean that we've made it into the information age, and that IT is going to be our major engine of growth?
Not quite. As I pointed out in this column last week, our role in the global IT world is still one of consumers (for example, of cell phones) and of providing cheap labor, whether to assemble electronic products and computers, or as workers for outsourced information activities such as call centers.
Excuse me as I rattle off a few figures, which are necessary for us to get a clearer perspective in relation to IT. Let's first look at Texas Instruments' gross revenues in 2003, which came to P159 billion. At P55 to the dollar, that is about $2.89 billion.
Awesome? Not really. In 2000 (the latest year for which I could get international figures on Asian companies), the largest Asian manufacturer of information equipment, Hitachi, had total sales of $70.24 billion, which is more than 20 times the Texas Instruments Philippines figures. Hitachi, you will notice, also ranked 20th in the Philippines, but its revenues here, from assembly activities, came to a mere $541 million, loose change really.
The second-largest Asian IT company, Toshiba, had 2000 sales totaling $50.472 billion while its 2003 revenues in the Philippines, for assembling products, came to $2.618 billion. Similarly, Fujitsu, the third largest Asian IT company, had sales of $46.133 billion in 2000 while its 2003 revenues in the Philippines came up to $627 million.
Value added
My point is that there's a world of a difference between manufacturing and assembling. We have remained content with assembling products for multinationals while our East Asian neighbors, in allowing the companies to use their cheap labor in the past, also insisted on a transfer of technology. Even more importantly, these countries poured in huge investments into education, developing basic and applied sciences to produce a large corps of IT professionals and scientists who are truly catapulting East Asia into the global IT market.
Acer is a case in point. A few years back most Asians had never heard of the small Taiwanese computer manufacturer. By 2000, Acer was the 15th-largest IT manufacturer in Asia, with sales reaching $5.662 billion, double Texas Instruments Philippines' revenues in 2003.
Today, China, India and Singapore are following the example of Japan, South Korea and Taiwan, starting out with joint ventures and imitation of the big players' products, but with value added through all kinds of innovation. In last week's column, I mentioned how India developed its own hardware and software to canvass 450 million votes within a few days. Easily, in a few years, the Indians can export their technologies to the United States (and maybe assure more honest elections than the one in 2000, where computer glitches resulted infamously in Bush's victory).
Yesterday's Inquirer had a local call center spokesperson claiming their sector will bring in $689 million in revenues in 2004. But I've also mentioned India, which still has a major share of the outsourcing industry, sees the call center as generating loose change compared with software development. Last year they generated $9.2 billion from software exports.
Knowledge workers
We need a major shift in the way we are to move forward and compete in the global IT market. It would help if we start and recognize our potentials not just as end-consumers of IT but as knowledge producers and knowledge workers.
Our much-touted assets -- relative fluency in English and high educational attainment -- need to be tapped in a way that we are able to process knowledge, for ourselves and for the world.
I could cite other examples of knowledge production that's needed. Most of our Southeast Asian neighbors now have their own electronic dictionaries, as they try to get more people to master English. We could use such dictionaries, as well as other products like Filipino spell-checkers.
We need more role models like Niel Dagondon, who developed Anino, a computer game that takes off from local folklore. That is an example of a value-added product that draws on what we have. The market is there, locally as well as internationally.
Knowledge doesn't have to be packaged only as electronic products. "Old fashioned" books are still badly needed. The recent expos‚s about inaccuracies in our textbooks are an indictment of the way we have neglected knowledge production. Given an educational system where textbooks mangle information, should we be surprised that Mercury, the country's 14th largest corporation, produced a calendar two years ago showing a mosque with a caption identifying it as "a place where Muslims worship Mohammed"?
If we are to "sell" ourselves to the world, as a hub for information technologies, we need to go beyond technical skills and show we appreciate our own store of knowledge, and our ability to think critically and creatively. Then maybe in a few years we'll find more Filipino firms, rather than multinationals, among our top 20 corporations.
Updated 09:39pm (Mla time) Oct 28, 2004
By Michael Tan
Inquirer News Service
Editor's Note: Published on page A15 of the October 29, 2004 issue of the Philippine Daily Inquirer
THINK of the country's top corporations and you usually think of oil companies, utility firms, banks, and food manufacturers.
For the last three decades or so, these companies have indeed been consistently among the leaders in business. But the BusinessWorld newspaper's latest yearbook on top corporations in the Philippines, released on Wednesday, reveals a major change, with information technology firms now dominating the economic scene.
For purposes of comparison, look at the 10 leading companies in 2000, based on total sales: (1) National Power Corp., (2) Manila Electric Co., (3) San Miguel Corp., (4) Petron Corp., (5) Texas Instruments Philippines Inc., (6) Pilipinas Shell Petroleum Corp., (7) Philippine Long Distance Telephone Co., (8) Caltex Philippines Inc., (9) Nestlé Philippines, (10) Ayala Corp., (11) JG Summit Holdings Corp., (12) Philippine Airlines, (13) Zuellig Pharma, (14) Coca-Cola Bottlers, (15) Mercury Drug, (16) Philippine Associated Smelting and Refining Corp., (17) RFM Corp., (18) Procter and Gamble Philippines, (19) Unilever Philippines, and (20) Purefoods Corp.
For 2003, which was the focus of BusinessWorld's yearbook, we have the following leading 20 companies: (1) Texas Instruments Philippines Inc., (2) Toshiba Information Equipment, (3) Manila Electric Co., (4) National Power Corp., (5) Petron Corp., (6) Pilipinas Shell Petroleum Corp., (7) Philippine Long Distance Telephone Co., (8) Caltex Philippines Inc., (9) Nestlé Philippines, (10) Globe Telecom Inc., (11) Smart Communication Corp., (12) San Miguel Corp., (13) Philippine Airlines, (14) Mercury Drug, (15) Panasonic Mobile Communications, (16) Philips Semiconductors, (17) Fujitsu Computer Products, (18) Metropolitan Bank, (19) Coca-Cola Bottlers, and (20) Hitachi Global Storage Technologies.
Note that eight of the top 20 companies are involved in information technologies, six of them as manufacturers of semiconductors and computers, and two (Globe and Smart) involved in mobile phone services.
Loose change
Does all this mean that we've made it into the information age, and that IT is going to be our major engine of growth?
Not quite. As I pointed out in this column last week, our role in the global IT world is still one of consumers (for example, of cell phones) and of providing cheap labor, whether to assemble electronic products and computers, or as workers for outsourced information activities such as call centers.
Excuse me as I rattle off a few figures, which are necessary for us to get a clearer perspective in relation to IT. Let's first look at Texas Instruments' gross revenues in 2003, which came to P159 billion. At P55 to the dollar, that is about $2.89 billion.
Awesome? Not really. In 2000 (the latest year for which I could get international figures on Asian companies), the largest Asian manufacturer of information equipment, Hitachi, had total sales of $70.24 billion, which is more than 20 times the Texas Instruments Philippines figures. Hitachi, you will notice, also ranked 20th in the Philippines, but its revenues here, from assembly activities, came to a mere $541 million, loose change really.
The second-largest Asian IT company, Toshiba, had 2000 sales totaling $50.472 billion while its 2003 revenues in the Philippines, for assembling products, came to $2.618 billion. Similarly, Fujitsu, the third largest Asian IT company, had sales of $46.133 billion in 2000 while its 2003 revenues in the Philippines came up to $627 million.
Value added
My point is that there's a world of a difference between manufacturing and assembling. We have remained content with assembling products for multinationals while our East Asian neighbors, in allowing the companies to use their cheap labor in the past, also insisted on a transfer of technology. Even more importantly, these countries poured in huge investments into education, developing basic and applied sciences to produce a large corps of IT professionals and scientists who are truly catapulting East Asia into the global IT market.
Acer is a case in point. A few years back most Asians had never heard of the small Taiwanese computer manufacturer. By 2000, Acer was the 15th-largest IT manufacturer in Asia, with sales reaching $5.662 billion, double Texas Instruments Philippines' revenues in 2003.
Today, China, India and Singapore are following the example of Japan, South Korea and Taiwan, starting out with joint ventures and imitation of the big players' products, but with value added through all kinds of innovation. In last week's column, I mentioned how India developed its own hardware and software to canvass 450 million votes within a few days. Easily, in a few years, the Indians can export their technologies to the United States (and maybe assure more honest elections than the one in 2000, where computer glitches resulted infamously in Bush's victory).
Yesterday's Inquirer had a local call center spokesperson claiming their sector will bring in $689 million in revenues in 2004. But I've also mentioned India, which still has a major share of the outsourcing industry, sees the call center as generating loose change compared with software development. Last year they generated $9.2 billion from software exports.
Knowledge workers
We need a major shift in the way we are to move forward and compete in the global IT market. It would help if we start and recognize our potentials not just as end-consumers of IT but as knowledge producers and knowledge workers.
Our much-touted assets -- relative fluency in English and high educational attainment -- need to be tapped in a way that we are able to process knowledge, for ourselves and for the world.
I could cite other examples of knowledge production that's needed. Most of our Southeast Asian neighbors now have their own electronic dictionaries, as they try to get more people to master English. We could use such dictionaries, as well as other products like Filipino spell-checkers.
We need more role models like Niel Dagondon, who developed Anino, a computer game that takes off from local folklore. That is an example of a value-added product that draws on what we have. The market is there, locally as well as internationally.
Knowledge doesn't have to be packaged only as electronic products. "Old fashioned" books are still badly needed. The recent expos‚s about inaccuracies in our textbooks are an indictment of the way we have neglected knowledge production. Given an educational system where textbooks mangle information, should we be surprised that Mercury, the country's 14th largest corporation, produced a calendar two years ago showing a mosque with a caption identifying it as "a place where Muslims worship Mohammed"?
If we are to "sell" ourselves to the world, as a hub for information technologies, we need to go beyond technical skills and show we appreciate our own store of knowledge, and our ability to think critically and creatively. Then maybe in a few years we'll find more Filipino firms, rather than multinationals, among our top 20 corporations.
posted by Dante at 11:35 PM
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