TM 251 – T E C H N O L O G Y E N T R E P R E N E U R S H I P













U N TA P P E D M A R K E T S ( W O R L D E C O N O M I C F O R U M )


Table of Contents



Creative Industries and Micro & Small Scale Enterprise Development (UNIDO)

1.1 Summary...............................................................................................................3 1.2 Critique..................................................................................................................3 2 Global Opportunity in IT based Services (World Bank)....................................7 2.1 Summary...............................................................................................................7 2.2 Critique..................................................................................................................9 3 Promoting Agro-Enterprise and Agro-Food Systems Development in Developing and Transition Countries (World Bank)..............................................11 3.1 Summary.............................................................................................................11 3.2 Critique................................................................................................................13 4 The Next Billions: Unleashing Business Potential in Untapped Markets (World Economic Forum)..................................................................................................15 4.1 Summary.............................................................................................................15 4.2 Critique................................................................................................................17 5 Global IT Report 2009-2010 (World Economic Forum)...................................19 5.1 Summary.............................................................................................................19 5.2 Critique................................................................................................................21 6 Team Conclusions and Recommendations....................................................23 7 Bibliography...................................................................................................25




designer fashion. producers penetrate the market in developing and developed countries at the level of MSEs. tradition. For the efficient flow and operation of the value chain. Moreover. architecture. design. publishing. art and antiques. advertising. The Value chain model for Craft Creative Industries was explained to give a clearer picture and understanding of how the industry operates. crafts. The last and the most critical component are the marketing and markets.1 CREATIVE INDUSTRIES AND MICRO & SMALL SCALE ENTERPRISE DEVELOPMENT (UNIDO) 1. innovation and competitiveness through entrepreneurship and building creative communities to improve people’s welfare. It seeks the attention of policy makers. The chain has three major components. Case studies from Thailand. This industry operates through Creative clusters which is a combination of production and distribution activities within a common structure having the capability of promoting activity. Second is the manufacturing of products which is composed of processing and production activities. researching applications and distribution systems and those under the sponsorship of public and private financing. Pakistan and Iran were presented to establish the different channels from which Creative Industries were promoted as well as discussion of the definition and analysis of Craft Creative Industry using the systems approach and value chain concept. The interplay of these internal and 1 . UNESCO proposed a conceptual framework for policy making to promote the growth of Creative Industries. performing arts. film. TV and radio mainly focusing on the craft sector because of its functionality in operating in both rural and urban areas. First are the inputs. development specialists and other business and finance sectors who share the same goal in promoting economic growth. Creative Industries was defined as the industries that produce tangible and intangible artistic and creative output which can possibly generate income through exhaustion of cultural assets and production of knowledge based goods and services. There are thirteen economic sub-sectors grouped under Creative Industries. which mainly are the pre-existing elements in a region (cultural heritage. creativity and talent. history) human resources and technology. music. interactive leisure.1 SUMMARY The main objective of the study is to explore the possibilities of Creative Industries as a gateway to promoting the growth of Micro and Small Scale Enterprises (MSE) in rural and poor communities and to the economy through employment of jobs and income generation. services must be backed up by polices. Policies play an important role in the Creative Industries by providing the strategic framework in which opportunities can be recognized and barriers to growth can be prevented. The key inputs of Creative Industries are skill.

product 2 .external forces and its impact in the industry explained the findings on the present state of creative industries for each case. as human capital and human resource development are important components of the craft value chain system. Zarbaft textile is one of Iran's core craft products that has a great potential in the local and foreign markets. UNIDO should provide support to MSEs in business services. There is poor access to working capital despite availability of micro-credit lines. Thailand is the most successful in the promotion and operation of MSEs’ Creative Industries in rural areas. Third. The cluster concept was proposed to be a means of reviving the craft sector. market knowledge and entrepreneurship. Based on the analysis of the present state of this industry. the craft activities of the region have possibilities of being turned into creative industries with an arising interest among skilled workers and NGOs to hold workshops and continue developing their crafts. In gearing towards success of the action plans. despite the constraints. First. Pakistan. Success of OTOP. on the other hand is a case of a country whose crafts tradition is rich and diverse but has been neglected. in order for Creative Industries to flourish. Among the three cases. participation of both private and public sectors were required. training and education should include the concept of creativity in the education system. Second. evaluating and measuring the number of participants employed in the project and how products perform in the market. Its four core products remain constrained by heavily relying on intermediaries from the start of the purchase of raw materials to the marketing of end products. One major issue however is their lack of method of monitoring. Fourth. The conclusion concentrated on six important points. talents and resources in transforming these into well crafted products can be attributed to strong support networks particularly their national government along with associations formed with public and private sectors. Local NGOs however. MSEs can find its way to the national and export markets through innovation. policies formulated should be geared towards improvement and development of Creative Industries’ potentials. there must be continuous investment in the strengthening of the education and values system and give emphasis to culture and creative industries. Fifth. a project designed to help the rural communities make use of their cultural heritage. consequently applying Creative Industries. an efficient value chain system is where there is an awareness of market opportunities and development of products through innovation and creativity which can be best achieved if there is a good knowledge of the market. are willing to revive the craft sector through creative industries through the revitalization programs. And lastly.

strengths. The paper did a good job in presenting cases with different scenarios where people and entities can learn from the experiences told by each country. a study conducted by the Department of Labor and Employment sees creative industries as a major provider of productive opportunities for appropriately-skilled and qualified Filipino workers in this decade. it is important to make an assessment of the internal and external factors that impacts this industry. the paper could have provided a better analysis on the contribution of Creative Industries in the selected countries under study if it provided more statistical data to support and justify these claims and findings. However. 1. it is expected that exports of creative industry products will go up by 50 percent as most sectors will be aggressive in driving the sector's growth. UNESCO and the European 3 . As Creative Industries has become an emerging sector in improving the overall welfare of the economy. To mention. music products and television programming are the products of these industries. Game development in particular as cited by Tolentino is generating an annual growth rate of more than 50 percent. two organizations. The Philippines per se. Game development. As understood in the cases. and marketing issues which caused their stagnation because of the inefficient movement of the value chain system.2 CRITIQUE UNIDO’s intent in conducting this study is to primarily promote the Micro Small Enterprises through Creative Industries. It is in the analysis of the structure. Tolentino. and constraints of the industry which served as a basis for the proposals of growth movement and development plans for the countries under study. is a country rich with cultural heritage and a vast pool of talents and resources which have potentials for improving the employment level and overall income of the country. These salient points on policy formulation were clearly emphasized all throughout the paper. Results of the study also show that creative industries are anticipated to drive employment growth faster than the gross domestic product in the long run. Thus. the bigger components of the creative industries grew by more than 10 percent per year from 1999 to 2008.development. quality management and strengthening of internal and external linkages. the value chain plays an important role in the present status of the industry and how it fared over the years. independent film. Project Jobs Fit. a competitive intelligence research consultant and industry specialist. Pakistan and Iran’s industries were constrained by several critical factors mostly attributed to the financial. the need to create policies arise which will recognize the opportunities that can possibly be gained from any level in the chain and impediments which can stifle the growth of the industry. Noteworthy to mention that in this study. product development. In the next three to four years. According to Cesar S.

Given that strategies are devised to facilitate efficient value chain movement but no policies for control and performance measurement. The Creative Industries Task Force is commissioned to assist DTI. In the Philippines. Part of its success is still attributed to the pool of creative people forming the industry. each having a different objective to pursue. 2 GLOBAL OPPORTUNITY FOR IT BASED SERVICES (WORLD BANK) 2 . policies. which talks about the Creative Industries Council has already been passed to Senate. initiatives to formulate a Philippine Creative Industries concept embodying our economic structure and culture has already started through the three organizations formed.Parliament are aimed at setting policy frameworks that will support and strengthen Cultural and Creative Industries. Bill 1064. CCP in the promotion of an international promotional plan that will result in a shift from a primarily services driven economy to creative driven economy. Moreover. These organizations are the Philippine Services Coalition whose mandate is to enhance and develop Philippine trade in services and the National competitiveness Council which address the improvement of the competitiveness of the country. In the Philippines. no matter how apt they are if not implemented accordingly will always lead back to disequilibrium in the value chain. Creative Industries is a sector that can easily be subjected to changes and dynamism. Moreover. continuous investment on the enhancements of talents and skills. There are already ongoing programs in Technical Education and Skills Development Authority (TESDA) and Commission on Higher Education (CHEd) for expanding the formal courses that cater to building the workforce for the future that will serve the creative industries. culminating activities and educational learning that will tap the potentials that are yet to be honed should be an advocacy to foster the growth of this industry. the action plan will still remain futile. Thus. These were discussed in another study done by Cesar Tolentino entitled A Primer on Creative Industries and Digital Content Products and Services.

It can also catalyze fiscal. involves mechanical design and production. Analysis and policy advice presented in this study are based on inputs from consultants.g. It also provides a positive influence on the status of women as they account for a high percentage of total professionals and technical workers in the IT services and ITES with the highest-paying jobs than in most other sectors of the economy. the Philippines. on the other hand. 70 percent of employment and 73 percent of gross domestic product (GDP) in developed countries and 35 percent of employment and 51 percent of GDP in developing countries (UNCTAD 2008) are accounted to IT-based services. success in IT services and ITES present opportunities for repositioning the image of a country. Based on quantitative analysis of historical facts. according to McKinsey estimates for IT services and Gartner Research (2008a) and National Association of Software and Services Companies (NASSCOM-Everest 2008) for ITES. regulatory. China. and consulting. embedded software. India. ITES global opportunities are more focused in knowledge process outsourcing. banking) processes. Canada and Ireland) and developing (e. and increased exports and GDP. IT engineering services. a “branding” effect that has 1 . while ITES involves a wide range of services delivered over electronic networks.g. While ITES is difficult to distinguish in the market from IT services. and plant engineering. Finally. and legal reforms whereas innovations and reforms are being extended to other sectors of the economy. the industry has created jobs. for example. Global opportunities in IT application services involve traditional services. raised incomes. while the demand for IT services and ITES is very high. and Ireland. In a recent study of the service sector. call centers) and vertical (e. Mexico and the Philippines) countries.2. application development and maintenance. horizontal (e. In general. IT services include IT applications and engineering services. system integration. The expansion of IT services and ITES has provided these countries a wide range of economic and social benefits. policy experts.g. including work conducted by McKinsey & Company under a recent consulting engagement with the World Bank and the Information for Development Program (infoDev). However. This study has discussed the key factors in assessing the strengths and weaknesses of countries in IT and ITES and the relevant policy options for them to implement.g. only a small percentage of this potential has been realized.1 SUMMARY The objective of this study is to help policy makers in taking advantage of the global opportunities in IT-based services. and industry leaders. In India. developing IT services and ITES provides a positive economic impact to developed (e. Two IT-based service industries were defined to have the potential in global market opportunities in trade: IT services and IT-enabled services (ITES).

aimed at the overall business environment and not at the IT services and ITES industries specifically. In summary. (b) many of the policy enablers needed by the IT services and ITES industries involve “no-regret” interventions that also benefit the rest of the economy. proponents of targeted industry support point out that (a) countries that have succeeded have generally seen their governments making deliberate interventions to catalyze growth of the sector. quality of infrastructure. The government’s extensive commitment and support plays a crucial role in developing IT services and ITES industries. and emphasize that the task is best left to markets.freeing parts of the IT services and ITES industries from burdensome regulation and.profound implications like India. being the global leader in IT and ITES services. providing support from a state agency that has the mandate and the authority to guide businesses through the bureaucratic labyrinth that still exists in many countries. While opponents of industry-specific policy point to the dismal record of governments in supporting specific sectors. (2) Policy Options for Reducing Costs – reducing bureaucratic cost requirements to IT companies. developing IT services and ITES would provide positive economic impacts to developed and developing countries and this development requires an extensive commitment and support from the government and all sectors. extend infrastructure access. and (c) a broader approach to policy. The LRI is a diagnostic tool that measures a country’s 9 strengths and weaknesses in six important categories: talent pool size and quality. and (4) Policy Options to Improve the Broader Business Environment . and market maturity. cost. (3) Policy Options to Address Infrastructure Barriers – governments creating an enabling environment for establishing competitive and effective markets in order to attract investment. risk profile. environment. is likely to miss key interventions and be out of sync with the dynamic needs of these industries. and improve service quality. gives more receptive environment for entrepreneurs. This study provides a discussion of available policy options such as the following: (1) Policy Options for Nurturing and Expanding the Talent Pool – availability of employable talent by improving education. 2 . and thus direct their efforts to interventions that will have the greatest impact on their likelihood of success. in some cases. A Location Readiness Index (LRI) was developed as a modeling tool by McKinsey & Company for the World Bank and infoDev to help countries identify their areas of relative strengths and weaknesses in terms of IT and ITES.

the potential global opportunities are not being realized. If its government will continue to be proactive in supporting IT services and ITES industries. growth is limited as most countries are not able to provide the demand in workforce that meets the required skills set by the market. In fact. In fact. the education was aligned to provide the required skill set in the BPO market. the Philippines had overtaken India as the top global business process outsourcing destination (ITES). To start with. it was able to provide innovations that also create new IT-based services and new markets.000 engineers every year that provides the workforce demand of the market. increasing investments of IT services and ITES companies. they have established the “branding” effect wherein the country is known for providing workforce with profound technical competency in IT. Countries with large talent pools have the advantage in attracting IT services and ITES companies because large companies prefer to source services from locations where scalability is feasible. 1 . Hence. As a result. With the commitment and support from the government.2 CRITIQUE Unquestionably. it holds the potential to excel in this field but needs the drive and commitment from its leaders in promoting and supporting innovation nationwide. the Philippines focuses mainly in ITES and not in producing innovative IT-based services. India produces 500. thus. Possibly. In 2007. In contrast. It initiated by supplying the required workforce of the BPO market. This can be achieved by promoting research and development in private and public sectors that will nurture radical and incremental innovations in IT-based services. in addition to the policy options mentioned in the study and to the six important categories in the Location Readiness Index (LRI). the Philippines has adopted the policy option for nurturing and expanding the talent pool. global opportunity in IT-based services is constantly growing. besides India’s advantage of possessing profound technical skills among the other developing countries. By seizing the global opportunity in IT-based services definitely boosted the country’s economic growth primarily in increase in employment rate and GDP. then this country has the potential to follow the footsteps of India and eventually be the top destination for IT services and IT globally. Nonetheless. primarily in English communication and basic IT technical skills.2. Since then. It also attracted investment from IT services and ITES companies. the strength of developing a sound innovation in IT-based services should also be considered. In the case of India. However. India had been the leader in all IT and ITES services globally. the government can consider focusing on other policy options like reducing cost by decreasing taxes shouldered by IT companies or addressing infrastructure barriers by creating an environment that will attract investors.

3 PROMOTING AGRO-ENTERPRISE AND AGRO-FOOD SYSTEMS DEVELOPMENT IN DEVELOPING AND TRANSITION COUNTRIES (WORLD BANK) 2 .In conclusion. This study promotes awareness on how to take advantage of the global opportunities in IT-based services that could eventually lead to economic growth and global competitiveness. given the importance of skills as a driver of growth of the IT services and ITES industries. Therefore. the government’s extensive commitment and support plays a crucial role. a focus on quality of education in close alignment with local and global industry needs is essential.

and (3) organizations and organizational forms. build up on capabilities. A comprehensive rural development strategy was developed by the WBG called Rural Development: From Vision to Action (VtA). Consumer demands in the last ten years are increasing and diversely focusing on health. and equal the distribution of assets. The primary elements for the building blocks of agro-food systems include (1) rules and regulations. institutions. The focused themes for the agro-food development support shall be (1) food security. The principal reason for transformation is to position agro-food systems to center on consumer needs and requirements. And to achieve market liberalization. organizations. movements. and viable solutions that will make up the ‘systems perspective’ of the interacting activities. geography. (4) smallholder and SME market integration. . conflicts. and improve practices. there are still some developing nations where the agro-food systems remain under the control of the state due to weak privatization environments. political and social conditions. This shall also take into consideration the different circumstances of each country in terms of demography. Agro-enterprise systems are the entities. The withdrawal of direct involvement of the state in agribusiness has prospered in the 1990’s due to high costs and failures of the countries’ political and economic objectives. and other interactions that occur outside the actual production or off-farm. One of the trends that have had a great impact on Agro-Food Systems is market liberalization and agro-enterprise privatization. and history. and Brazil. Presently.1 SUMMARY The paper outlines a framework of the World Bank Group (WBG) that will facilitate the improvement and transformation of the agro-food systems. business environment. and (5) risk management. (3) competitiveness. and economic development in client countries.3. China. ‘sustainability’. per capita income. and activities. 1 . The objective is to develop the agro-food systems as a dominant income generating system and a foundation for economic growth that will help alleviate poverty among the poor farmers and other rural communities. (2) food safety. Their advancements have made it possible for these countries to build up on new skills and knowledge. restrictions. The initial groundwork of any strategy is a comprehensive analysis of opportunities. implementing a variety of measures that will transform the ‘rules of the game’. Taiwan. it requires ‘reengineering of the entire farm-factorybuyer supply chain and finding alternatives for previously performed public services’. Both the public and private sectors must participate in the market movement. (2) enterprises and entrepreneurs. animal welfare and other consumer concerns. Thailand. Countries that have demonstrated the industrialization and modernizations of the agroenterprise include Israel.

directly and indirectly. In recent agro-enterprise developments. They have to understand the growing needs of consumers.S.CIDA. It has to be noted though that these require higher capital investments. WBG should also form collaborations with other organizations with common interests (such as U. Different countries have demonstrated an increase industrialization and modernization through agroenterprise activities. in developing and transition economies. and Food and Agricultural Organization . and well informed with the trends and technological advancements in the industry. utilize technology. There is no standard external support solution that will ensure a successful transition.2 CRITIQUE The strategy and objectives of the World Bank Group to boost the agri-food systems serves as a channel and an opportunity for member countries to maximize the potential benefits of agribusiness. knowledgeable. This includes partnering with governments to implement strategies and policies for the agribusiness that supports macro analysis. One very crucial recommendation that was mentioned in 2 . Possibly the only way that the poor communities will benefit from these transitions is if there will be public interventions that will allow them to have a voice and increase their participation in the process that shape and define the ‘rules of the game’ Among the recommendations for the WBG includes disseminating information to client countries and partners that agro-food systems can be a major source of economic growth and a high income generating livelihood.FAO) to form a common framework for their programs. 3. The challenge here is to be able to include the poor farmers and other rural communities to participate in this market environment. and meet the demands in terms of quantity and schedules. regulation and competition. the focus has been on modifications on credit policies and other components to benefit rural communities and encourage project developments from the private sector. These are the nations who are skilled.Industrialization and Globalization have had huge impacts on agribusiness. Improvements and increase in global competitiveness of agro-enterprise and agro-food system will establish a strong foundation that will help alleviate poverty. Developing countries need to be more globally competitive. Agency for International Development – US AID. Emerging technologies are able to provide better product quality and improvement on food safety. Canadian International Development Agency .

Therefore. and banking and finance industries. This includes education. water depletion. Among the popular college degrees belong to the medical fields. these efforts were not enough for agriculture to equal or even come close to the top choices in terms of college education. The nation’s efforts for modernization and industrialization must take into consideration of how it will affect our environment. This includes soil erosion. and destruction of natural habitats due to urban developments. Efforts of the WBG to help advance the agro-food systems will be ineffective if these issues are not dealt with. Efforts on upholding the agriculture business will not be realized if this country is not able to control its population growth. to be involved in the development to help further strengthen the industry. education. This must be simultaneously addressed by other government agencies. There are several factors that contribute to the problems of sustainability. policies. External support from international organizations alone is not enough to help transform and improve the agro-food systems here in the Philippines if the agriculture industry per se is not given emphasis and importance. water pollution. This will require other government agencies to be involved in addressing these problems.the paper is disseminating the benefits and potentials of the agriculture industry to governments and other partner organizations. Another area of concern is the need to address environmental issues. 2 . The Philippines is considered an agrarian country in which agriculture is a main source of livelihood. population growth. Even its agricultural sector has not been able to supply the food demands of the nation. including the youth. The government is forced to import rice and other staple foods from other countries. There are several issues that must be addressed in order to benefit from the external aid of the World Bank Group. environmental concerns. Agriculture sustainability in general should be the focus of government efforts and external aids from international organizations. and funding in the last ten years. programs. This campaign must be extended to other sectors of society outside the agriculture industry of the client country. Agriculture here in the Philippines is not a popular choice in terms of college education. arts. and political conditions among others. engineering. The increasing population of the Philippines is also a major concern of the agriculture industry. The paper has mentioned that WBG has limited staff that has private agribusiness experience and/or analytical specialty in this area. there is a need to promote and encourage the people. Though there have been efforts on improving the industry in terms of infrastructures.

and interactions still remains a challenge. These are major setbacks to its economic growth and will hinder the country to take advantage of external supports. 4 THE NEXT BILLIONS: UNLEASHING BUSINESS POTENTIAL IN UNTAPPED MARKETS (WORLD ECONOMIC FORUM) 4.Another challenge for the Philippines is the political instability. These political conditions are contributing factors that further increases the marginalization of poor and rural communities. and graft and corruption. As an example. Both the public and the private sector should be active in upholding and encouraging agribusiness. The government’s role should be limited to policy making and reforms. and public interventions to allow the poor community to have a voice in the agro-food systems. Policies and strategy implementations must be focused on the benefiting the poor and small businesses.1 SUMMARY World Economic Forum has released a research report on a new innovative approach in capitalizing the potential of the below-the-poverty market through 1 . Goals and objectives of external assistance for the industry’s developments from international organizations will be easily met if there will more people involved and interested in the industry. its government has been involved in the misuse of donated funds from United Nations. Getting the rural communities and others sectors who belong to the low-income bracket to participate in the decisions making. Education and training are key factors in achieving the transformations and success. This has placed the Philippines in a bad light among the international community. processes. Considerably. the Philippines will fully benefit from external assistance programs of WBG if government will not be directly involved in the negotiations and implementation of programs. in the recent months.

for example. and (3) sales strategies that expand usage in partnership with local entrepreneurs. non-traditional business models can be created to target the BOP through the adoption of innovative strategies that can benefit both the companies and the local communities. which in turn help raise the standards of living in developing countries. New opportunities can be tapped by adopting new strategies to discover hidden value and new business partners at the BOP. Africa and Latin America. Companies often find success through working closely with local communities. According to this report. Telecommunication companies. The report has mentioned that awareness. this below-the-poverty population can give birth to the future batch of global success by being sources of economic development and social transformation. producers and entrepreneurs. One example is Unilever’s campaign in India in promoting proper hygiene by visiting villages and educating consumers on the health benefits of its soap through the micro-entrepreneurs’ Project Shakti – a distribution network of village women. WEF described that by changing the perspective of companies. Innovative companies are adopting new mindsets to effectively serve and engage the BOP as consumers. despite the economic downturn.The Next Billions: Unleashing Business Potential in Untapped Markets in January 2009. It has outlined strategies and noted the potential of the BOP market that has seen 8% growth rates in recent years. Personal interviews of The Boston Consulting Group have found that there are substantial untapped opportunities for companies that are willing to think differently about how to approach the BOP market. It stated several examples of 2 . companies can find growth opportunities among the 3. recognition and understanding of the BOP group and development of products and services have led the way to a new approach in looking at profitable business. (2) applications that provide cash transfer or information services. earning $8 or less per day. This secures a company’s position in the increasingly competitive emerging markets just as importantly provide an essential service that improves livelihoods and lifestyles of the poor members of society. and a review of over 200 case studies. profitable and scalable business models to include the BOP has created a competitive advantage by securing market share and gaining loyalty of consumers and producers.7 billion people at the base of the pyramid (BOP) which is the world’s low-income population. has developed (1) technologies that lower unit costs and enable service provision in remote areas. Companies like Unilever that are first to establish sustainable. With the support of the multinational firms. where most are located at Asia. The report presented several examples of successful business ventures across different industry sectors that have adopted BOP strategic concepts based on a survey drawn in 2008 from consultation with business leaders and stakeholders.

weforum. To overcome obstacles. (1) creation of lifeenhancing offerings – products and services that are produced with the aim of enhancing the economic status of the poor. It includes governments that can strengthen policy and tax incentives. (3) education through marketing and communication – marketing programmes that are created to provide information of a company’s products and services and the benefits of using these products. top business leaders from its 1. companies can enter into new alliances with other industries or strategies that all developed business models based on a redesigned innovation framework composed of five principles these are. (2) reconfiguration of the product supply chain – distribution networks that ensure effective management of pricing. BOP markets present unique challenges. non-profit organization based in Switzerland that aims to improve the state of the world by encouraging world leaders to partner in shaping global. stocking and service. 2 . religious leaders and journalists meet to discuss the most pressing issues facing the world. including health and the environment (www.2 CRITIQUE World Economic Forum (WEF) is an independent. (4) collaboration to form non-traditional partnerships – partnering with local communities and organizations that are done to maximize all possible resources and local knowledge while providing income to the BOP.000-member (5) unshackled organization – companies that have a strong and structured commitment in servicing the needs and demands of the BOP through excellent leadership and commitment from all stakeholders However. selected intellectuals. Yearly. and provide hard and soft infrastructures for BOP business engagement as well as NGOs and donors and other civil society and community organizations that can help broaden consumer acceptance by creating BOP awareness about product benefits. Bringing different partners together can unleash possibilities that could not be realized by groups working alone. regional and industry programs to address the challenges of the 21st century by tackling immediate problems and shaping solutions to global issues. NGOs. 4. international political leaders.

rather than NGOs and philanthropists. A growing number of global companies are now drawn to the idea that money can be made through the development and marketing of products and services at the BOP level.The Philippines is also a partner of WEF. Current President Benigno Aquino III has directed the National Competitiveness Council to set a goal in making the Philippines rank in the top one-third of the World Economic Forum Global Competitiveness Report by the end of his term in 2016 (GMA News 2011).35 a day (Dumlao. Since this is a product of a research survey on multinational. generate profit to make these undertakings sustainable. and legal and political uncertainties. Procter and Gamble pursue capitalism – at its best – to create solutions to societal problems of the poor. 2008). WEF proves that it has a great influence globally that most economies and organizations use its standards as a unique benchmarking tool for national growth. The five principles presented as a framework for 2 . provide capital to invest on growth. These innovative ideas are possible grounds for money-making-business models that multi-national companies like Unilever. Asian Development Bank has estimated that 27 percent of Filipinos or about 23 million live below the Asia-Pacific poverty line which is $1. regional companies and social entrepreneurs who have pioneered the creation of their own BOP business models. inefficient system of government. The highest level can generate significant flexible income and the mid-range level largely spends on essentials while the lowest level struggle to meet basic needs. One of these is The Next Billions: Unleashing Business Potential in Untapped Markets in January 2009 under the theme Shaping the Post Crisis World. This report has shared substantial information on how to alleviate poverty through economic development and social transformation. These standard BOP markets are to be found in India. WEF foundation releases a series of research reports and engages its members in sector specific initiatives. This report emphasizes that companies can discover new markets with possible growth potentials and at the same time aim to gain a socialeconomic impact. This report was developed by the WEF Forum in partnership with The Boston Consulting Group and Bill & Melinda Gates Foundation. and attract investors while partnering with the local communities. Common characteristics of these markets are lack of infrastructure. it then illustrates that it is the private sector companies. The report cited three levels of BOP depending on income. that have the ability to best meet the BOP needs. Brazil and also the Philippines where there are some degree of connection with the global market. The Next Billions states that the “base of the pyramid” (BOP) is a huge undertapped market with an opportunity to capitalize in bringing basic services to the poor and therefore create profit. General Mills. In the Philippines alone.

is the Philippines’ leading wireless company with roughly 12.1 SUMMARY The Global IT Report has been issued yearly since 2001. Chairman of Manila BOP practitioners could gain insights in penetrating possible markets like Burma or North Korea. multi-national companies like Manila Water Company and Smart Communications Inc. 3 . have benefited from business models redesigned to suit its local BOP market. can be an excellent tool in helping improve the lives of people. apart from providing relief. where the state heavily restricts the rights of most of its citizens or to BOP places that have recently suffered from natural disasters. and (3) programs must be continuously created and developed to encourage sustainability of the BOP business models in order to accelerate the impact and scale of innovation strategies. designed specifically to capture and retain the BOP market (www. According to Jaime Zobel de Ayala II. (2) BOP frameworks must incorporate the creation of sustainable product and service innovations that could leapfrog current technologies. Katsuri Rangan and Michael Chu. it would be helpful to gain knowledge in how to apply the standard BOP principles in hostile and disaster areas. These companies saw business opportunities by finding solutions to common problems of the local communities.5 million Global System for Mobile Communications (GSM) by creating innovative products and services like telecom in sachets purchase of their products in small amounts. 2008). The report assesses the information and communication technologies (ICT) industry on its own as well as in relation to other industries and presents the Networked Readiness Index (NRI) for different nations every year in its publication. However. In the Philippines. Smart Telecom on the other hand. 5 GLOBAL IT REPORT 2009-2010 (WORLD ECONOMIC FORUM) 5. only a small portion of Manila’s population had access to potable water.innovation has been proven to be applicable to all three levels of BOP and to standard BOP markets. When Manila Water was privatized. it has provided water to 99 percent of Manila citizens 24/7 which resulted in $50 million profit per year (V.iese. The Global IT Report 2009-10 is divided into four parts with several sub-chapters. The four parts of the report are as follows: (1) The Networked Readiness of the World in 2009–10. Companies involved with the BOPs should keep in mind that (1) BOP principles should be applied to stimulate growth in poor communities – design products and services with value creation – and not just aim for scale and profit. Information in adopting the BOP principles in places with extreme hardship where most or all variables are totally non-existent as a first step towards return to normalcy.

and growth in ICT can likewise be beneficial to the city. and Sustainability. The nations focused upon in each of the case studies are Spain. Computation for the NRI is under the assumption that each sub-index and pillar holds equal weight. 43%). buildings with built-in architectural features that can help save energy consumption and facilitate better waste management. Technological advances can help companies build infrastructure that is improved to produce “green buildings”. Ireland. Top performers and notable performances within each region and income group (high income.ICT. Economic growth and environmental sustainability are a few of the benefits that can be derived by the cities. A total of 133 nations are assessed in this report. The networking of cities and the continuous growth of population in urban areas provide for a more ICT sustainable culture. A particular article in this report discussed the growth of cloud computing and the potential benefits to be derived from this growth. 57%) and research (hard data. it dropped one place lower to the 86th rank overall. (2) Readiness and (3) Usage. (2) Best Practices in ICT to Foster Growth and Competitiveness: Selected Case Studies. lower-middle income. in the following report. This data was used to compute for the NRI. The structure of the NRI is based on three sub-indexes: (1) Environment. Environmental sustainability has been mentioned as a benefit of ICT growth. These sub-indexes are further divided into three pillars for each sub-index. with Sweden awarded the highest rank. upper-middle income. ICT sustainability is the main focus of this report and its effect on the environmental. Even the article stressing the importance of aligning business strategy with IT strategy also briefly touched the topic of environmental sustainability. low income) are given particular mention. Based on the authors’ research and estimates. This is the same rank obtained last year. Global IT Report 2010-11. The case studies discussed in the second part of the report present the best practices that could be benchmarked by nations developing their ICT. industrial and social sustainability. unfortunately. The effect of the urbanization trend on ICT has also been mentioned in this report. Tunisia and 2 . Data presented in this report was gathered through surveys (survey data. Companies can aid the environment by using technology to improve business processes and waste management. cloud computing can provide an additional million jobs in Europe alone. discussing the topic of lowering carbon dioxide emissions in particular. The Philippines claimed the 85th ranking and also ranked 13th in the lower-middle income group. and 14th in the lower-middle income group. (3) Country/Economy Profiles and (4) Data Presentation. and several articles focused on the relationship between ICT and the environment.

Readers of this report can appreciate its contents. The conclusion of the report focused on presenting the data gathered and previously available data from prior year reports in relation to NRI computation. The writers and publishers of this report recognized the need to be flexible in following the NRI framework. especially if they have financial-decision making responsibilities in their companies. The ICT industry is constantly changing.2 CRITIQUE This report was issued during the recovery phase from the recent global financial crisis. 5. measures used are updated annually to conform to the updates in the ICT industry. This report should help boost the importance of making sound ICT-related decisions and investments and also strengthen the position of IT departments within companies. The topic of sustainability is very fitting for the timing of the report’s release. 2 .China.

It discussed the eventual long-term benefits in investing in ICT and other advanced technologies. For example. On a side note. However. the government in a communist nation has greater controlling power than in a democratic nation. Throughout the report.html). This may not be true for all nations.php/home. job availability and ICT growth. as these two countries are estimated to be the most populated in the world. where he can find healthy competition or be a risk-taker in a developing nation. the authors consistently sited best practices based from actual historical data. the Philippines is already in the loop regarding green buildings through the Philippine Green Building Council (http://philgbc. As the report is issued annually. Advances in ICT will be ineffective if the end-users are unable to appreciate and use it. The entrepreneur can invest in a nation with developed ICT. and in basically the same In the article ICT and the Sustainable Competitiveness of Cities. particular to communication. 2 . it was mentioned that Chinese and Indian cities were not included in the sample population. A financial projection alongside the graphical representation of possible benefits to be derived from ICT investments would be helpful to the readers of this report. They used the selected best practices as benchmark and this provided consistent basis for evaluation. The report also contained a table depicting the link to gross domestic product. the human element in ICT advancement is also recognized in this report. this can help in his business strategy. financial constraints will always hinder future ICT investments. Several chapters in this report are focused on the relationship of ICT to other industries. For an entrepreneur. investment in ICT requires a rather large sum of financial investment and although technology advances have positive impact on society in general. Representative cities from both countries should have been included in the study. This illustration is easily understandable and allows regular readers. persons with no direct ICT knowledge. comparisons to analyze trends would not be difficult to perform. This may cause the results of their research to be inaccurate. building a “green building” will be more beneficial to the environment and to the company in the long run. for example.Additionally. The Global IT Report can be a useful tool in analyzing and forecasting ICT trends in a nation. but this will require a larger sum of initial investment. to appreciate ICT advances. Computation of the NRI is based on the assumption that all factors play an equally important role in a nation’s ICT readiness.

business sector. and the community must change for them to exploit existing. They should look into opportunities to serve the needs of consumers beyond poverty line and those in emerging economies. and emerging opportunities to improve communities and the economy. The transition may be done by looking into possible responsibilities per stakeholder group in order to improve communities and the economy: • Business Sector. The structure of these organizations may allow to them to speed up development and time to 3 . Medium Size and Enterprise Level Businesses should look into doing businesses outside their usual target market.6 TEAM CONCLUSIONS AND RECOMMENDATIONS The government. entrepreneurs. new.

existing. • Community. Most of under-developed business opportunities are found in small scale industries such as arts and crafts that are mostly unique to a region and may need specialized skills in production. and services. These businesses should also look into opportunities in entering or developing long term capabilities to IT and IT Enabled Services (ITES) to be able to acquire a significant share of this service oriented industry in the global scale. and emerging opportunities through the use of technology. Focusing on developing these industries may open opportunities to address the needs of an un-served market. community based organizations. and the government to speed up information transfer that may translate to development of new markets. • With better defined roles in contributing to developing the economy and communities. non-profit organizations. and regional groups would need to improve relationship management efforts with the business sector. Governments should ensure that they are able to create policies that make their state an ideal location for different industries to do business in. The of new products based on the opportunities available to consumers at the base of the pyramid (BOP) and the said emerging economies. • Entrepreneurs. The entrepreneurs are encouraged to venture into exploiting under-developed business opportunities and practicing social entrepreneurship. entrepreneurs. products. 2 . Aside from policies that support already developed industries. Government. governments should also look into developing policies that will attract more entrepreneurs and business into entering into already existing industries that have not yet been developed like agriculture. stakeholders from different sectors would be able to develop create and run better machinery for national innovation systems which can help exploit new.

Doris.” Inquirer Global Nation. 27 August 2008. “23 Million Filipinos Living Below Asia-Pacific Poverty 2 . Department of Agriculture http://www.da.1 BIBLIOGRAPHY CIA – The World Factbook: List of Countries by Population (2011 estimated) Dumlao.html Commission on Higher Education

htm NCC SEEKS TOP RUNGS OF WORLD ECONOMIC FORUM RANKINGS FOR PHL.Environmental Sustainability Issues in Philippine Agriculture Nicomedes World Economic Forum as retrieved on July 24. JULY 1.NEWS.YAHOO.pdf World Atlas: List of Countries by Population (2010 estimated) http://www.HTML Philippine Agriculture Faces Challenges of Sustainability http://www.weforum. 2011 http://www. 2011 HTTP://PH.YAHOO.weforum. 1 .edu/pdf/Chronology%20Economic%20%20Financial %20Crisis.COM/NCC-SEEKSTOP-RUNGS-WORLD-ECONOMIC-FORUM-RANKINGS-170106120.wharton. GMA NEWS JULY 1.COM/NCC-SEEKSTOP-RUNGS-WORLD-ECONOMIC-FORUM-RANKINGS-170106120. World Economic Forum. Director of the Lauder Institute http://lauder. 2011. AS RETRIEVED ON JULY 24.agriculture-ph. NCC SEEKS TOP RUNGS OF WORLD ECONOMIC FORUM RANKINGS FOR PHL. AS RETRIEVED ON JULY 24. Guillén. 2011 HTTP:// Global IT Report 2010-2011 http://reports. 2011 NDTECHNOLOGIES/Resources/2828221208273252769/ The Global Economic and Financial Crisis: A Timeline by Mauro^report_type%3A%22Annual %20Reports%22. 2011. Brione Global Opportunity in IT Based Services http://siteresources. As retrieved on July 24.worldbank.HTML Global Competitiveness.pdf GMA NEWS.

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