Packaging our way into industrialization
Many of us admire how the Japanese take packaging very seriously. It is not an uncommon observation that in some of the gifts we receive from visiting Japanese guests, the packaging sometimes looks more costly than the product itself. Even what appear to be simple pastries or sweets can be packaged in a way that gives them the feel of a luxury product fit only for the privileged class. There is art and tender loving care even in the way a sales clerk in a department store or a small shopkeeper in Japan would meticulously wrap up your purchase. In my book collection is a picture book on gift wrapping, Japanese style—every bit an art book just as engaging as picture books on painting, sculpture or architectural art.
But there’s much more to packaging than art. There is a great deal of science in it as well—and with it, profound economic, social and environmental implications. I have long been aware of this, but the GlobalPack 2012 Conference held in Iloilo City last week was a big eye-opener for me, as it was for the hundreds who came to listen to the international line-up of knowledgeable speakers on the topic. Conference coordinator Angel Buñag had asked me to speak on the overall economic context the packaging industry operates in. I came out with a much stronger conviction that taking packaging seriously is vital to restarting our belated industrialization.
The packaging industry is crucial to industrialization just as industrialization is crucial to the packaging industry. My Ateneo colleague Dr. Edsel Beja Jr. recently wrote in the Inquirer about how the Philippines had undergone the opposite, or “deindustrialization,” in recent decades. In one of my slides, I showed how the share of industry to total economic output had risen from 39 to 48 percent in Indonesia between 1990 and 2009, whereas it shrank from 34.5 to 30 percent in the Philippines. It was in services where our output shares rose markedly. Incidentally, Indonesia overtook the Philippines on average income per person within the same period. We now have the dubious distinction of having the lowest average income among the five original members of the Association of Southeast Asian Nations, whereas we had been second to lowest above Indonesia for so long.
Some observers saw our jump from the dominance of agriculture to that of services as “leapfrogging.” Others saw it as missing the boat of industrialization, with all its adverse effects on the nature of our economic development. I called attention to the fact that of the 15 top billionaires in our country named in the recently released Forbes list, only about three are involved in manufacturing, but not even as their main source of wealth. Our richest are into services, primarily real estate, banking and finance, and trade—and hardly into manufacturing and industry.
Can we still pick up our lost industrialization? There are trends and indications that give basis for hope. Perhaps foremost is the rapidly rising cost of labor in China, erstwhile known as “factory of the world,” which had stolen the business from many of our domestic manufacturers who simply could not match its dirt-cheap costs. China’s emerging problem is as much demographic as structural. Its strict one-child policy has produced pampered “little emperors/empresses” within families, who are in no mood to work in factories as they now reach working age. There are also structural dynamics within the Chinese economy leading to escalating production costs too complex for me to explain here. But the long and short of it is that our own manufacturing sector will get much more breathing space in the face of these developments. And as we try to exploit this new breathing space, doing packaging right will be a key element in pursuing emerging opportunities.
Another conference speaker, Dr. Nerlita Manalili of NEXUS Agribusiness Solutions, pointed out at the outset that the packaging industry is actually the world’s third largest manufacturing sector, next to food and pharmaceuticals. And it derives its very growth from the growth of the other two, demand for which will doubtless continue growing by leaps and bounds for obvious reasons. More importantly, she explained how packaging’s key role lies in reducing product waste and loss especially in the food supply chain. And in an increasingly resource-constrained world, this can significantly substitute for the need to produce more, thereby enhancing sustainability. The nature of packaging itself (e.g., use of biodegradable materials; designs that promote efficient transport) can have profound implications on environmental sustainability and climate change. All in all, I am convinced that there is indeed so much art and science in packaging, which make it an important knowledge area worthy of serious professional study.
Why was the conference held in Iloilo, one might ask, when the place is not exactly an industrial area (yet?) wherein packaging concerns would be most relevant? Host to the event was the Central Philippine University, which has a unique School of Packaging within its College of Engineering, offering the only Bachelor of Science in Packaging Engineering course in the country. The program produced its first graduates in March last year, and school authorities proudly affirm that all of them have found proper placement. With the great dynamism one sees in the Iloilo economy these days (something I will also write about soon), it is ahead of the curve in at least one important strategic driver for our economy’s nascent breakout, now anticipated by many an analyst.
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