Companies know what’s best
COVID-19 changed the world in fundamental ways that will continue long after it has shifted into an endemic disease. I’ve said it again and again, and I’ll say it again now: Geography is irrelevant. So is time. We are, permanently, in a hybrid, metaverse world where the virtual is inextricably entwined with the physical. It means that not only businesses, but, importantly, the executive branch and Congress must not only realize this, and change their procedures to encompass this new world but do so with unaccustomed alacrity. President Marcos Jr. wants to downsize/streamline the government. But, as I argued previously (“Rightsizing,” 8/15/22) that won’t happen if it’s a pell-mell approach, not a targeted, pilot model endeavor. He must also, I’d suggest, maybe more importantly, change the way in which the government operates, and the rules it puts in place. Congress needs to change existing laws to recognize this changed world, and keep that future in mind when drafting new laws.
We are in a hybrid, metaverse world, and if this is not recognized and acted upon, we’ll fall even further behind than where we are now. As an (important) aside, have you noticed how we are near the bottom in every category that’s surveyed of the world’s countries on their performance in a wide range of categories? Doesn’t that bother you? It surely bothers me.
A government mired in the past will only achieve a loss of great potential for growth for the country in the different future that is evolving. How businesses operate can no longer be determined by laws that were created in pre-COVID, pre-metaverse days. The laws must be changed with considerable urgency. In the meantime, exclusions must be created by the administration. An immediate example is the hugely successful business process outsourcing (BPO) industry, which was under threat by a law that demanded physical presence if you wanted to continue to enjoy the incentives that brought you here in the first place. IT-business process management (BPM) has turned out to be a goldmine for us. As a major economic pillar of the economy, it is an industry we must encourage to come here and to stay here. The industry has made it clear, it requires flexibility in work arrangements if it’s to stay. Call centers alone (just one part of IT-BPM) brought in ever-so–greatly–needed $29 billion last year, and employed 1.44 million well-paid employees. The IT and Business Process Association of the Philippines (IBPAP) will be coming out with a Roadmap 2028 later this month that will be the IT-BPM industry’s blueprint for the next six years. According to Jack Madrid, the CEO of IBPAP, over one million additional jobs for Filipinos can be created by 2028. In the ongoing, increasingly aggressive global war for IT-BPM talent, the country’s incentives for investors should ensure that companies come here, not go elsewhere.
Article continues after this advertisementToday, we are threatened not only by the long-known competitor, India, but the United States, Brazil, and Malaysia are also changing their laws to woo the IT-BPM industry. The Indian government is already adjusting its policies and tax breaks to support BPOs working from home. They even created a special program encouraging remote work by providing incentives to workers to return to their hometowns.
The future of work is about flexibility, and it will be location and time — independent and hybrid in work setup. Elsewhere in the world employees are refusing to work if they are not granted the flexibility they’d like. COVID has shown them they can have a better quality of life and be more productive. A Cisco survey found there was a 79 percent improvement in work quality, an 89 percent improved sense of well-being, and an overwhelming 92 percent who were pleased to have a hybrid work set-up. You don’t argue with figures like that. I’ve no doubt it’s the same here.
So it’s good the Department of Finance and the Department of Trade and Industry have recognized this and through the Fiscal Incentives Review Board (FIRB) agreed that IT-BPM firms can still avail of the incentives they’ve been granted through a very clever solution. Transfer them from Philippine Economic Zone Authority to the control of the Board of Investments where there is no limitation on how many can work from home. They’ve left it to business to decide. Recognizing business knows what will work best for them, and be the most productive.
Article continues after this advertisementWhat this highlights is that the incentives provided to attract foreigners into our midst should be based on the type of industry we have, ones where we have the capability to provide service or product at a world-class level. We want the IT-BPM industry. It’s not a factory where you have to be on the factory floor, it’s a mental activity where the brain can be anywhere.
It was of great credit to the FIRB that they recognized this. Mr. Marcos now needs to extend the concept of business knows best to all activities that involve business
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