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The Philippines: Fertile Ground for Tech Startups


This 2015 there was a rapid rise of high technology start ups in the Philippines. These so called “unicorns” have grown to a valuation of more than a billion dollars. This year there were about 30 unicorns produced by the fertile ground for these start-ups and it is expected that the grow at all costs narrative will be replaced by a flight to capital efficiency and profitability.

The Philippines is currently regarded as the second fastest growing economy in the world. Its Business Process Outsourcing industry employing over a million workers is expected to earn US$25 billion by 2016. This is significant in relation to the US$270 billion GDP of the country. The reason for this growth in the BPO industry is its technology driven services and sectors with the highest growth demand services for high-level skills that includes data analytics and app development for mobile, there is also demand for mid-level skills such as financial analysis, video production and copywriting.    

Aside from the lower labor costs, the Philippines has a young educated labor pool and is the fifth largest English-Speaking population in the world. This makes for an advantage for American companies wherein the available labor pool will have no difficulty in relating to the market since it is familiar with American culture owing to the past status as an American colony for almost 50 years. This makes for a startup friendly environment.

This workforce has a median age of 24 with over 130,000 graduates in information technology and engineering churned out by local colleges and universities. The skill level ranges from programming languages, developing Android and iOS apps and website development.

The rise of technology driven infrastructure such as cloud computing enables building a flexible and distributed workforce able to meet the growth requirements of any startup company, this ability for a virtual access, set-up and on-demand workforce enables a startup company to scale up its operations much easier, faster and more efficiently that previous structures that have geographical limitations.

Paradigm Shift

Now,  Filipino BPO worker is different from a BPO worker of 10 years ago. The exposure to international modes of industry, culture and entrepreneurship has changed the mindset of the BPO worker that sees the advantages of innovation-driven and mission-focused companies as the next professional evolutionary step. Thus, start-ups are the wave of the future. Now, the Filipino startup entrepreneur that has a venture capital backing is the new status symbol. The competitors are no longer local family owned conglomerates but international tech companies that comes in the Philippines owing to business advantages inherent in the country. The local tech start-ups are now geared towards competing by developing and building new products and services. The battle is now at the frontlines and not backroom services support.

The next level in Filipino tech start-ups will be to be strategic partners and be recipients of venture capital investments. The Philippines owing to the ubiquitous use of the English language can exploit opportunities to enter new markets in Southeast Asia. Owing to its relatively common ethnicity with the rest of Southeast Asia, the Philippines can serve as the entry point to the huge Southeast Asian market with the advantage of being culturally the most westernized. This will prove that the Filipinos can offer to be partners in the growing startup industry globally.


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