Next Wave Cities - the Future of Outsourcing in the Philippines

Online, October 25, 2013 (Newswire.com) - At the recent International Outsourcing Summit (IOS) in Makati, I caught up with Mon Ibrahim, Under Secretary of Science and Technology, and discussed the latest strategies being undertaken by the Philippine government to continue the growth and evolution of the industry.

Fast growth
In 2010, the Philippines became the world's largest exporter of voice-driven BPO, pushing out India as the global hub. In non-voice BPO, involving back-office services and complex business services, the Philippines is a strong second to India with over 200,000 employees providing global sourcing services to the world.

The success in such a short period of time has been phenomenal. To keep that success going the government in the Philippines is focusing on two areas. Under secretary Mon Ibrahim comments, "We work very closely with the industry via IBPAP to promote opportunities. Firstly, we are working on the Next Wave Cities strategy. This initiative is about building the same sort of business environments and ecosystems that we have in Manila in other cities around the country."

The target for 2016 is for 20 cities around the country to be employing 20,000 people. Of course to meet those targets means having people who have the necessary skills and knowledge.

It's about the people
"The other important area we are working on with IBPAP is talent development, ensuring that we have the right skills for the industry".
Issues have been raised by a number of people in the industry, that the further from the main central cities of Manila and Cebu the harder it is to find people with sufficient English skills, particularly for voice related or contact centre work.

" We work closely with the ICT councils around the country, they are our development partners. Each of these ICT councils is based on the business sector located within a city, the relevant educational institutes and the local government that manages the city. We work with them to have a very thorough understanding of what the industry needs and requires."

"The Philippines is generally considered to be among the four countries having the most number of English speakers in the world and, because English is used as a medium of instruction in academic institutions, the proportion of professionals and fresh graduates who speak fluent English is a high 70 per cent."

"So as far as the skills are concerned for example, most of the government scholarships are geared towards providing higher skills development. So we have good accountants there, we have good engineers, and we have good health professionals in cities outside of Manila and Cebu."

Starting young
To help improve the quality and range of skill sets available and the ever increasing demand for skilled talent, the average length of time a Filipino spends at school has gone from 10 to 12 years.

Undersecretary Ibrahim, says "We're in the middle of implementing our K to 12 initiative. The final two years of high school will be divided into three tracks: social sciences, business administration and management and STEM (Science Technology Engineering and Mathematics)."

"We're ensuring that by the time students finish high school, they are ready for advanced physics, or advanced calculus or further education in any advanced field. This is where I believe the industry will be getting most of their people. By the time they finish high school graduates will be able to be employed straight away as Java programmers or developers".

Not enough middle management skills
With such fast growth and people being promoted so quickly, the government has recognised the short fall when it comes to having a sufficient number of people with middle management skills. "To begin with we need to be importing a lot of those skills. You will notice quite a number of foreigners in middle management positions. Ultimately over time we need to assimilate those skills locally, where the government needs to fund local training in middle management."

Dealing with different cultures
Not only are technical and management skills training required, but significant cross cultural training is high on the agenda as the Philippines has to deal with a range of different countries and cultures. At this stage the Philippines is very attuned to North American Culture but not so much Japanese, European or Australian ."A cross cultural program is going to be embedded into our high school curriculum to broaden the level of understanding of different cultures."