A compelling call to make digital competitiveness a priority

The Philippines moved up two notches, from 58th to 56th place, in this year’s IMD World Digital Competitiveness Ranking. On the surface, this might sound like great news.

What it is, actually, is a warning to our government leaders to do something substantial and impactful in the area of digital transformation as soon as possible.

There were 63 countries in the ranking. Certainly, 56th out of 63 is not something to crow about. Even more dismal are the regional rankings. In the Asia-Pacific Region, the Philippines ranks 13th out of 14, beating only Mongolia. In Southeast Asia, we are in last place — Singapore is 4th, Malaysia 31st, Thailand 40th, and Indonesia 51st.

The World Digital Competitiveness Ranking, produced by the international body the IMD World Competitiveness Center, “measures the capacity and readiness of 63 economies to adopt and explore digital technologies as a key driver for economic transformation in business, government, and the wider society.”

It relies on a mixture of hard data and survey replies from business and government executives. “The digital rankings help governments and companies understand where to focus their resources and what might be best practices when embarking on a digital transformation,” the web site says.

“Digital competitiveness” is characterized by three main aspects. First, knowledge — the know-how necessary to discover, understand, and build new technologies. Second, technology — the overall context that enables the development of digital technologies. Third, future readiness, or the level of country preparedness to exploit digital transformation.

In 2018, the first year of the rankings, the Philippines was also at 56th place. It moved to rank 55 (2019), rank 57 (2020), rank 58 (2021) before returning to 56 this year. This is also the third year of our being at 13th place, among 14 countries in the Asia-Pacific Region, after being 12th in 2018 and 2019.

Broken down per factor and sub-factor, we performed most poorly in the Knowledge aspect (62nd), under which we ranked 55th in Talent, 61st in Training and Education, and 57th in Scientific Concentration.

We ranked 49th in Technology, under which we placed 62nd in Regulatory Framework, 40th in Capital, and 45th in Technological Framework.

In terms of Future Readiness, we were 58th, ranking also 58th in Adaptive Attitudes, 45th in Business Agility, and 57th in IT Integration.

Breaking down the Philippine performance points us to exactly where we need to look and improve.

In relation to this, we at the Stratbase ADR Institute, in partnership with consumer advocacy group CitizenWatch Philippines, held a virtual roundtable discussion last week that zeroed in on the infrastructure needs of our country — including digital infrastructure — in order to finally recover from the crisis and achieve sustainable development.

University of the Philippines – Virata School of Business Professor Emeritus and Stratbase ADRI Trustee and Program Convenor, Dr. Epictetus Patalinghug said the previous administration missed its targets in the much-hyped Build, Build, Build program. He proposed that this new administration prioritize consumer-friendly projects and streamline the approval process of major infrastructure projects.

Meanwhile, Infrawatch Convenor Terry Ridon called on President Bongbong Marcos to provide policy clarity on the issues of traffic, electricity, and digital infrastructure that have been affecting the general public.

Indeed, the Digital Competitiveness Rankings should serve as an urgent reminder to the Marcos Jr. administration, which has now gone beyond its first 100 days, to make Philippine digital transformation a priority. It can do this by collaborating with both the private sector and with civil society, acknowledging that they are indispensable partners with complementary strengths and perspectives that can do much in advancing our country’s digital agenda.

The government, acknowledging that it itself has a daunting task in building the public sector’s capability for more efficient, responsive, and tech-driven public services, should make the Philippines a more attractive destination for investors of all kinds, but in particular, investors who will bring digital infrastructure. They will supply the much-needed capital and know-how for our country. The investment environment can be made attractive through good governance and transparency, the elimination of bureaucratic hurdles, respect for the rule of law and the sanctity of contracts.

Of course, infrastructure is not enough. Alongside these initiatives should be zealous efforts to build the skills of the Filipino workforce. People are, after all, the best and most prized factor in building a nation. Investing in our people means improving our basic education system, improving and upgrading Filipinos’ skills to accommodate the demands of the future, and instilling in them the inclination to learn yet newer things and acquire greater knowledge.

Seeing better rankings for the Philippines — in digital competitiveness or any other measure — is not an end in itself. Scores and ranks are simply an indication of where we are relative to other countries and what we need to work on. Ultimately, our goal is to achieve technology-driven sustainable economic development that would narrow income gaps and ensure a better quality of life for more Filipinos.

Victor Andres “Dindo” C. Manhit is the president of the Stratbase ADR Institute.