Digital transformation should benefit all

The Philippine Chamber of Commerce and Industry (PCCI) was reported to have commissioned the National University of Singapore to study the Philippine digital economy and to propose needed public policies. This is in line with its drafting of an action plan covering areas such as 5G rollout, artificial intelligence, and the cloud, among others.

“The idea is to have an indication as to where we are as regards to digital transformation, and to be presented and discussed at the PCCI board,” PCCI Intellectual Property Committee Chairman Antonio L. Sayo told media. “(It’s) essentially a benchmarking exercise.” The study results will be presented to government, business groups, and universities.

In January, PCCI launched a center for technology education and entrepreneurship in partnership with Huawei, to look into the areas of artificial intelligence, robotics, coding, big data analysis, the Internet of Things, satellite internet connectivity, and blockchain, among others. This, I believe, is a step in the right direction. Business groups should be ahead of all others in developing a knowledge base for digital technology and applications, and their impact.

But, moving forward, I also hope that PCCI and other policy researchers put greater emphasis on equal access and on creating equal opportunity. Digital transformation in the COVID era has not exactly levelled the playing field. In fact, it appears to have created distortions and wider gaps between the haves and the have-nots.

For instance, the Philippine Star reported recently that female entrepreneurs “in the local e-commerce space [Lazada, in particular] suffered more from the pandemic fallout than their male counterparts, reinforcing observations that the health crisis is disproportionately hurting women.” Star quoted research by the International Finance Corporation (IFC).

IFC, a member of the World Bank group, noted that before the COVID-19 pandemic, Filipino women-owned businesses in Lazada outsold those owned by men in terms of gross merchandise value. Women also ran and owned two-thirds of businesses in Lazada. But this trend has since been reversed in the Philippines and Indonesia.

In this line, IFC is pushing for ensuring parity. As IFC senior vice-president Stephanie von Friedeburg was quoted as saying, “There is little doubt that the ability to compete online will increasingly define whether a company succeeds or fails — a trend which has only been accelerated by the pandemic. Ensuring that women are well-placed to compete online will not only strengthen businesses but drive development.”

Digital technology can mean transformation, development, and growth. But it can also result in inequalities. In the case of education, for instance, those with limited access to infrastructure and logistics are obviously disadvantaged by the disruption brought about COVID-19. To keep up, a learner must contend with the need for a mobile device or a computer; electricity; internet access; the ability to learn on one’s own; and the capacity of educators to effectively teach online. This is in lieu of simply going to school and attending class.

In such a scenario, it becomes a rich dad-poor dad situation. Assuming “free” public school education, then tuition is not the issue. Even materials are provided to students in localities such as Makati City. But, learners with the resources (rich dads) to procure mobile devices, to pay for internet access and electricity enjoy a significant advantage over those who do not (poor dads). This may not be the case with face-to-face schooling.

Public education is just one area where imbalances resulted from digital transition. Even industries have not been spared from inequalities. Digital transformation usually impacts low-income workers or those who earn minimum or daily wage and do mainly manual work. “Automation” does away with “manpower” and man-hours, supposedly in pursuit of productivity and efficiency.

Automated point of sales systems also eased out workers who used to manually process and prepare orders, and those who used to accept and process payments. Mobile applications have benefitted consumers, but in the process could have also cut a lot of manual jobs that used to be available particularly to low-income workers.

The same can be said for automating production lines, with robotics and AI replacing humans in manufacturing facilities. Unless displaced workers are retrained and equipped with new skills that are required in the digital economy, then job generation will suffer as more industries pursue productivity, efficiency, and lower costs. Benefit to consumers may be at the expense of workers, who are consumers themselves.

It is in this line that I challenge PCCI to go further in its attempt to map the Philippine digital economy, and to push its center for technology education and entrepreneurship to call for public policies that ensures a digital economy for all. Digital transformation should not result in imbalances and inequities, and should not disadvantage any sector of society. It should promote equal opportunity and benefit.

As Zia Qureshi of the Brookings Institution noted, “The era of smart machines holds the promise of a more prosperous future for all. But it demands smarter policies to realize that promise. To capture potential gains in productivity and economic growth and to address rising inequality, policies will need to be more responsive to change as technology reshapes markets.”

Qureshi, a visiting fellow at the Washington DC-based nonprofit public policy organization, added in his recent working paper, “As technology shifts market dynamics, policies must ensure that markets remain inclusive and support broad access to the new opportunities for firms and workers. New thinking and policy adaptations are needed in areas such as competition policy, the innovation ecosystem, digital infrastructure development, upskilling and reskilling of workers, and social protection regimes.”

Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippine Press Council

matort@yahoo.com