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4 Ways Digital Infrastructure Development Can Improve the Global Competitiveness of Philippine Industries


4 Ways Digital Infrastructure Development Can Improve the Global Competitiveness of Philippine Industries

The Philippines recently made modest inroads in IMD Business School’s most recent World Digital Competitiveness Rankings, climbing two positions to 56th out of 63 economies. However, despite these gains, it remains behind its fellow Southeast Asian Economies in digital competitiveness by a wide margin. 

Fortunately, this is all set to change. To improve the country’s digital competitiveness, the Philippine government is currently engaging private information and communications technology (ICT) development partners to ramp up the country’s digital coverage. In the past few years, the government and its partners have made steady progress in digital infrastructure development that may push the country’s economic performance to new heights. Among the many strategies employed to make Filipinos digitally ready, the development of common towers and the strategic use of small cell sites is proving to be a winning combination.

In the Philippine countryside, Unity Digital Infrastructure, an Aboitiz InfraCapital (AIC) and Partners Group venture, has been offering mobile network operators cost-effective common tower services, permitting the rapid spread of 5G internet in previously underserved areas. Gaps in coverage caused by geographical features, tall buildings, and low business feasibility are also being cost-effectively closed by AIC’s small cell sites, which could be deployed virtually anywhere to augment data capacity needs.

Even now, these digital infrastructure improvements are changing the lives of millions of Filipinos and improving the economy’s global competitiveness. Further expansion of infrastructure assets such as common towers and low-cost small cell sites is likely to bring even more positive change to the national economy. Here are four ways the expansion of digital infrastructure will boost the Philippines’ global competitiveness.

1) Wider Digital Networks Can Boost Workplace Transformation

During the COVID-19 pandemic, the temporary society-wide shift to remote working showed that, in many cases, working from home was not just an alternative but a better choice for reducing business operational costs, improving employee productivity, and offering workers a better quality of life. In the post-pandemic era, many jobs are likely to permanently move out of traditional workplaces into homes, thanks to the proven benefits of adopting flexible working arrangements. 

More broadband infrastructure is also likely to transform workplaces in other ways. For many Filipinos, access to reliable high-speed internet connections will be their path to entrepreneurship. Given the accessibility and popularity of freelancing sites, collaborative software, and e-commerce platforms, we are likely to see more Filipinos reject regular employment in favor of entrepreneurship in the next few years, potentially creating more value for local economies and the national economy as a whole.

The continuation of digital infrastructure projects will take this current trend of workplace transformation into every corner of the Philippines. Soon, Filipinos can earn a living in their homes or wherever they choose, effectively destroying geographic barriers to earning good incomes and strengthening the economy’s competitiveness.

2) Digital Infrastructure Will Enable Better Cost-Efficiency

One reason many businesses and government agencies have been as enthusiastic about wider digital infrastructure development is the multiple ways it can bring down operational costs. Workplace transformation has allowed businesses to significantly pare down their real estate, utilities, and maintenance expenses. These savings are most often reallocated into value-creating areas of business, speeding up growth.

While not for all positions and businesses, the moving of more knowledge-based jobs to homes also has positive implications for public spending. The reduction in traffic congestion, for instance, can lead to reduced spending on infrastructure maintenance. 

Digital infrastructure development even has implications for healthcare spending, as the reduction of air pollution and road accidents may lead to a reduced burden on healthcare systems. The cost-efficiency of some aspects of healthcare delivery may also be further reduced by the wider availability of telemedicine. 

However, more important are the time savings that will be enabled by expanded digital network infrastructure. Even now, digital infrastructure is saving Filipinos millions of hours in otherwise unproductive commutes and other non-productive busywork. Continued digital infrastructure development will bring all these and other benefits to other parts of the country, further increasing business efficiency and global competitiveness.

3) More Robust Digital Networks Will Support New Industries and Services

Whenever new technologies are made available, there will be individuals who will use them to innovate, often in unexpected ways. This is likely to remain true when the country’s broadband networks are finally brought to every part of the country.

In countries that have already undergone digital transformation, the resulting shift to mobile e-services has enabled new opportunities for the creation of apps that solve highly localized problems. In the Philippines’ more developed cities, the app economy is already a major component of daily life as well as a generator of jobs, commerce, and tax revenues. The app economy has also enabled entrepreneurs to start businesses that would not have been viable in the days before digital transformation.

The further expansion of broadband infrastructure to other Philippine cities and municipalities will have similar effects in those places as well. Additionally, it may make way for a more efficient and interconnected economy that is no longer as reliant on middlemen and other gatekeepers to facilitate local trade.

4) Universal Internet Access Will Support Learning and Upskilling

As resource-poor countries like Japan, South Korea, and Singapore show, human capital plays a larger role than natural resources in determining the prosperity and competitiveness of an economy. The further development of digital infrastructure will no doubt serve to strengthen the Philippines’ human potential for decades.

The expansion of digital infrastructure will transform education and upskilling in underserved parts of the country. Universal internet access will break down financial and geographic barriers and close the knowledge gaps that have divided rural and urban communities for decades by providing all Filipinos with direct access to the world’s body of online knowledge.

Ultimately, the proliferation of digital infrastructure like common towers, small cell sites, and fiber optic networks, will be critical for rural Filipinos to access advanced skills and knowledge, paving the way for better opportunities as well as a more vibrant and globally competitive economy.

Digital competitiveness is now a key factor in a country’s economic performance as it impacts the efficiency of individuals and institutions alike. Finally bridging the long-standing digital divide between Filipinos in highly urbanized cities and those in the countryside is going to bring both the country’s economy and its global competitiveness in line with those of its neighbors. When that happens, we are likely to see the beginnings of a more prosperous and, perhaps, more equitable Philippines.

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