The Philippines in the New Asian Economic Dynamic

1. The Philippines in the New Asian Economic Dynamic Perspectives from Robert Eberhart, Fellow Stanford’s Program on Regions of Innovation and Entrepreneurship

2. The Philippines in context • The Philippines is experiencing profound changes in its national environment • China is developing and asserting national ambitions, but development will not be straight -line or calm • Japan and the US are experiencing a search for a new “normality” in economic and political realms • Global access to information an knowledge here-to-fore accessible to only a few is affecting the Philippines • News will outrun formal news services • Political interest groups will form and move faster than governments • How can the Philippines prosper in this context?

3. Business and EconomicOutlook • Continuing Effects from the Financial Crisis • The Evolution of Economies • Advanced economies • Declining birth rate • increasing concentration of wealth • Retention of the top of the value chain • Loss of mid-level skilled employment • Developing economies • Increasing share of the global economy • Political challenges as wealth increases aspirations • Resource constraints • Proliferation and Development of the Global Supply Chain

4. Supply Chain

5. Supply Chain

6. Strategies For National Growth • Improving Factor Inputs • Action • Increase amount and/or quality of labor and capital • Result: • Improved productivity • Trade and Comparative Advantage • Action: • Reduce import substitution rules and increase exports, sell currency, acquire part of global supply chain • Result • Increase of world market share of products and increase in GDP • Innovation and Entrepreneurship • Action • Create favorable Habitat for Innovation and Entrepreneurship • Result • Increase in new business formation both within companies and in formation of new companies

7. The “Habitat” for RegionalEntrepreneurial Development • Technology entrepreneurship: • Occurs in a framework of ways of doing things, the “Habitat” • The Habitat is the rules and institutions within which the ecosystem of entrepreneurship develops • The Habitat consists of: • The global marketplace for goods and services • Networks of local, family and national relationships • The Business Infrastructure of laws and habits • The Hard Infrastructure • Finance: Venture Capital and Angels • Universities and Research Institutes

8. The Tech Entrepreneurial Habitat

9. A Habitat forEntrepreneurship • Visitors to Silicon ask how it works. Most of them focus only on one part of the picture and miss many key points. Among key misunderstandings: • Science Parks. If they do not set the right conditions and recruit visionary companies into the park, they become only real estate developments. • University technology transfer programs. Often subvert the purpose of a university transforming it into a research lab for large firms • Start Venture Capital Firms. If they do not have the right regulatory regime, the venture capital companies just become banks or AppleCorp

10. Entrepreneurial Habitats

11. The Choice • So, what path with the leaders, businesspersons, and people of the Philippines take toward greater economic prosperity: • A unique but efficient semi-isolated economy? • The supplier of low value add segments of the global supply chain? • An innovative economy with the high turnover and high potential returns of technology entrepreneurship? • The many choices in front of you ... are yours!