Building regional competitiveness

It is difficult to imagine a strong, competitive country if it were built around only a few economic hubs. For the Philippines to truly become competitive, it will have to build economic hubs or corridors spread throughout the different island-groups. For the country to grow and remain stable, it will have to establish multiple economic hubs, each with its particular strengths and attributes. Economic hubs will provide options not only for investors to locate but also for Filipinos to choose where to live and work.

Various economic centers will provide alternatives for migration to Metro Manila and major cities in search of job opportunities. For investors, the presence of numerous economic centers will allow them to spread their risks and, at the same time, take advantage of the resources that remain untapped in the regions. The potential benefits of creating many competitive regions are the diversification of investment and job opportunities, the creation of new wealth and a growing middle class in different parts of the country, and overall attractiveness of the country as an investment site. In short, development will be spread more evenly.

At the National Competitiveness Council, we feel that regional competitiveness councils can be one of the building blocks of overall national competitiveness. Thus, we have started a program to create regional competitiveness councils nationwide. The objective is to strategically map out how to make regions or communities more competitive vis-à-vis selected Asean cities. For the purposes of this program, “region” has been flexibly described as a city, cluster of cities, province, or region (a cluster of provinces). Decisions on local coverage have been left to local communities.

For the past months, we have been travelling around the country to meet with Regional Development Councils, local government officials, and the private sector in various cities to start the creation or formation of public-private regional or local competitiveness committees. I am happy to report that the concept has been met with a great deal of enthusiasm and commitment. So far, our travels have taken us to Batangas and the cities of Angeles, Legazpi, Iloilo, Cebu, Tacloban, Cagayan de Oro, Davao, and General Santos in the last two months. Over that period, we have received commitments to form Regional Competitiveness Committees for all or parts of their respective areas of the country—Regions 3, 4, 5, 6, 7, 8, 9, 11, and 12.

Our next step has been to create a template or standard set of competitiveness indicators which all Regional Competitiveness Committees will collect on an annual basis so they will build a set of metrics for themselves. These indicators will help them analyze where they are weak or strong in terms of certain attributes. In earlier projects, such data were available only once every three years, making it difficult, if not impossible, to track progress or failure. Work on the template has started, building on earlier research projects as well as new sets of indicators prepared by industry groups such as the Business Process Outsourcing Association of the Philippines, which has prepared a detailed set of indicators for what it calls “next wave cities.”

This template covers data on the dynamism of the local economy, responsiveness of government agencies and local governments to business needs, quality of infrastructure, quality of life, cost of doing business, and human resources and training capacity. Eventually, some of the data can be benchmarked against international data for comparison against selected cities or regions in Asean.

One key feature of this program is the participation of universities in the Regional Competitiveness Committees. We have emphasized and encouraged their participation for two reasons. The first is that universities can play a major role in data-collection, archiving, and analysis of the indicators. I have suggested that third- or fourth-year university research classes in economics, business, or the social sciences can play a role in the data collection.

The second, and more important, reason for getting universities involved is that it gets kids engaged in learning about the economy, business, and how government works at an early age through hands-on experience. In some work we did in Bicol with a small group of college students from Bicol University and University of Nueva Caceres, we found that students appreciated the different perspectives they saw of business and government that they could not otherwise get from standard classroom work. I am hoping the early engagement of students through the data collection and analysis will also build up a culture of competitiveness and civic-spiritedness.

The creation of the Regional Competitiveness Committees and the preparation of the annual competitiveness indicators will just be a starting point for building regional competitiveness. Once the data have been analyzed, these committees will become the focal points for determining specific needs which we plan to match against available technical assistance to help regions. Once this social infrastructure and network is in place, the process of building up regional competitiveness can proceed in a more systematic and sustained manner. We are confident that, over time, you will be seeing more competitive regions and a more competitive Philippines.

Guillermo M. Luz is co-chair of the National Competitiveness Council. Inquiries, comments, or questions are welcome and may be sent to gm.luz@competitive.org.ph.