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Remedying The Global Worker Shortage
The looming problem of a shortage of skilled workers isn't unique to the United States. It's global. And the Philippines is positioning itself to become a central player in the quest for information technology workers.
Philippine President Joseph Estrada last Wednesday touted his country as a growing center for information technology workers and the gateway to the Asian market.
"Information processing capability is now the key indicator of national competitive advantage," Estrada told 200 business professionals and U.S. officials at a forum hosted by the Northern Virginia Technology Council. The Philippines "is an ideal position to be regional center for the new high tech economy.…(The) Philippines is home to a highly skilled, English speaking workforce."
The Asian market is ripe for high-tech expansion. The Philippines as first in knowledge workers, above that of the United States, Canada, Australia and India. It has a literacy rate of 95 percent as stated in a recent report by the Washington-based META Group ranked.
A recent report by Input, a market research and services company, pegs the North American offshore IT services market at $9.5 billion last year and expects it to climb to $61 billion by 2003, citing the Philippines as a major recipient of outsourced IT services.
Political Stability Stems 'Great Brain Drain'
For years, the Philippines experienced what one delegation official called the "great brain drain." Opportunities were few, and the emigration rate climbed steadily as students departed to study in the United States and other regions. A survey taken by MasterCard revealed that as late as 1997, the Philippines ranked highest in emigration rates within Asia, with a whopping 31 percent.
But that is changing. The marker, officials say, was the political stability brought about after the reign of Ferdinand Marcos. The first litmus test was the peaceful transfer of power from former president Corizon Aquino to Fidel Ramos in 1992. Estrada became president in 1998. Since the early part of the decade, the country's key leaders have been active in remodeling the government after the United States. Key liberalization of trade and investment in the retail industries, as well as relaxation of export controls were crucial developments to laying the foundation for a new platform of economic policy.
Estrada's ascension to the Philippine presidency also provided a foundation for new policies that have played a major role, Philippine officials say, in making the region so enticing to technology companies.
Estrada signed the Philippine e-commerce act into law June 14, establishing digital signatures, and major protection on intellectual property. It also defines and outlines cybercrime; something that officials hope will dissipate the aftermath of the "Love Bug" virus that wreaked havoc around the globe from its conception in Philippines. The Filipino government worked closely with the U.S. FBI to track down the computer bug.
But if companies are interested in anything, it's qualified workers. And the archipelago's wealth of highly-educated, multilingual citizens are attracting major high-tech dollars from the United States. America Online opened a 24-hour call center employing more than 800 Philippine workers. Andersen Consulting, Barnes and Noble, Procter and Gamble and Mitsubishi also have established call centers there.
Philippines Economic Health Improves
Despite the trauma of the Asian financial meltdown from only three years ago, the Philippines' economic outlook is beginning to show signs of solid growth. Gross domestic product in the first quarter of 2000 was a modest 3.4 percent, while inflation remained steady at 3.3 percent, well within the amount annually budgeted.
But what is the down side of investment in the Philippines? "That's a good question," said one U.S. Commerce Department official close to the issue. "Of course, they are much farther ahead than" other emerging markets. But the official cautioned that the United States would need to continue a dialogue with the Philippines on consumer protection and privacy issues.
Though political environment is modeled closely after the United States, tensions have risen from national security concerns. During his visit, Estrada continued high levels meetings with congressional members and administration officials, as he made a plug for continued military and foreign aid from the Clinton administration.
The Commerce Department continues to develop programs and mutually beneficial plans, which provide needed resources to developing countries while opening their markets to U.S. business and exports. A recent conference in Argentina paired small businesses with Argentine officials to discuss investment opportunities. If the Business delegation's trip is successful in motivating further investment, the Philippines example could provide a model for lesser-developed nations struggling with the challenge of trying to attempt high tech capital.
Desperately Seeking Tech Workers
Officials in Germany are faced with the daunting problem of how to attract more skilled workers to its growing tech industries. Germany recently approved the "green card'' system, which is aimed at enticing skilled foreign workers in to the country to fill the estimated 75, 000 vacancies. But recent skirmishes of anti-foreign violence and the paltry returns of the green card system reveal that it will take more than a public relations campaign to lure IT workers.
"The meager interest in the green cards is the best indicator that Germany is not an attractive workplace for foreigners,'' warned Bernhard Rohleder, chairman of Bitcom, an association of high-tech companies, in an interview with the Financial Times' German edition. Associated Press notes that with "weighty taxes" and lack of incentives like stock options, workers are not inclined to want to move to Germany, when most countries are experiencing similar worker shortages. And yet German companies fear they will fall behind — especially compared with their U.S. competitors, which routinely recruit the best and brightest from overseas.
Jordan Struggles To Attract IT Workers
While the United States and Jordan continue to try and hammer out a trade agreement by a September deadline, King Abdullah continues with his push to attract companies and investment. A recent workshop sponsored in Aman by Jordan's tech sector stressed the need for an employee stock option plan and touted it as a "best practice" to attract long term reemployment commitments. Part of an ongoing effort launched by the high tech sector, the REACH series, which begun in early July, is helping government officials, business leaders and workers become familiar with the needs of e-commerce. Abdullah wants to concentrate on strengthening the IT industry in Jordan where the brain drain is considered the major weakness.
U.S. Trade Representative Charlene Barshefsky continues to travel in the region this week and told reporters during a videoconference from Aman, "The U.S.-Jordan agreement will be only the fourth we have signed with any country," she said. "Our negotiations this week thus show the importance we attach to our relationship with Jordan, and our confidence in the economic policies Jordan has implemented in the past two years. She also noted the agreement would help Jordan develop high-tech industry and ensure "that Jordan is seen as a center for commerce and investment in the Middle East."
- by Maureen Sirhal
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