A weak app economy

How is it that a country that could produce hackers creating some of the most well-known and most pernicious computer viruses worldwide, has yet to come up with a prominent homegrown app of its own for making people’s lives easier? On the road, we now constantly see familiar brands like Lalamove, Angkas and Foodpanda zipping by on outfitted motorcycles. In offices and residential areas, delivery persons for online shopping apps Lazada, Shopee or Zalora have become part of the daily retinue of drop-ins. But all these, along with popular apps for games, music and movies, are generally all foreign. Where are Pinoys in the app economy? Why hasn’t any homegrown app made it big, yet foreign-made apps are now part of many Filipinos’ daily lives?

A techie friend enumerated to me a few likely reasons.

First, our facility with English may be an advantage in the global job market, but in building the local app economy, it’s actually a drawback. Our non-English speaking neighbors can simply translate a popular app into their own language and immediately cash in on it in their national market. That’s not a viable path for our tech entrepreneurs, as an app in Filipino is not likely to fly in the mainly millennial market. They would have to compete in the much wider field of English-language apps, where the international market leaders already are.

Second, our predominantly conglomerate-driven economy also gets in the way. A few family-owned conglomerates span vital sectors like utilities, banking, real estate, retail, insurance and, lately, higher education and health care, too. A Filipino tech entrepreneur with an innovative idea for any of these sectors must go through the corporate labyrinth to get to the right audience—usually a phalanx composed of a highly paid chief information officer, digital transformation officers, innovation strategy consultants and investment managers. These people would gladly snap up golden nuggets of wisdom and present it as their own to their corporate masters, with the original presenter tossed out of the picture. This, I’m told, is an all too common story experienced by many a young tech whiz in the country.

Some are offered a few million pesos to further develop their idea, usually the product of years of passionate pursuit of the next big digital play. The allure of a few million pesos offered to a group of young would-be tech entrepreneurs, most likely running low in funds and patience with each other, is often too hard to resist. The technology so acquired becomes part of the technology arsenal of the conglomerate. As the story line goes, that particular innovation is stopped from scaling up into a national app, but ends up stillborn and trapped within the limited space of the conglomerate’s corporate realm.

Finally and fundamentally, the most formidable hurdle could well be the absence of a public national broadband network (NBN) spanning the entire country. One might liken an NBN to the public road network. Just as the road network allows agriculture produce and industrial goods to flow freely among farms and factories and their suppliers and end-users, an NBN would likewise allow free movement of digital services within the digital ecosystem.

Private for-profit corporations as national broadband providers simply won’t work. By nature, they are out to maximize profit and return on investment for their shareholders. Private providers would thus be like toll operators with a practical monopoly on the entire country’s digital “road system,” whose primary aim is not national development, but to make their shareholders happy. They cannot be expected to provide free or affordable broadband access to some 25 million Filipino youth in the public school system, to our burgeoning urban poor communities, or to our disparate farming and fishing communities. They will provide broadband access to those who will pay for it. And as current pricing goes, if you want higher internet speeds that are in fact already standard elsewhere, you’ll have to shell out more money and pay a higher price.

Until we clear these hurdles, a robust app economy in the country will remain elusive.

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