As the Philippines faces a growing inequality, could the internet narrow the divide between the rich and poor by helping SMEs innovate?
In case you missed it: this week, a controversial Reddit AMA by a young man who only identified himself as J, gave 85 per cent of the Filipino population a peek into the largely-mysterious lifestyles of the Philippines’ moneyed 15 per cent.
Whether factual or otherwise, his revelations are nonetheless jarring and shamelessly extravagant. In one post (which may have already been deleted as this comes out), the guy even claimed to have flown to Hong Kong to eat lunch, just because he didn’t like the food served at home. These statements seem all the more excessive in light of recent news that there are approximately 12.1 million unemployed Filipinos – with the youth (18-24 years old) comprising 52.3 per cent of that number.
The great divide between the rich and poor remains prominent. Despite the promising GDP growth (at 7.2 per cent) which put the Philippines just behind China’s economic performance last year, joblessness is a malignant crisis – a rate which has once been branded as “the worst in Southeast Asia”. Whilst the current 27.5 per cent is still below the 34.4 per cent unemployment rate on March 2012, the figure has remained above 20 per cent since March 2005.
Supporting SMEs is a crucial step towards addressing this predicament. Comprising 99.6 per cent of businesses which account for 62 per cent of total employment, the Philippines’ small- and medium-scale enterprises are the key to creating more jobs for the working population.
But first, SMEs in the country need to solve the various issues hampering their growth. Aside from limited access to financing and rising operational costs, SMEs are losing skilled labourers to multinationals, who offer higher salary packages to the small pool of talented professionals.
Lack of vision is also impeding SME success, according to George Abraham, SME Development Council Chairman of the Confederation of Asia-Pacific Chambers of Commerce and Industry (CACCI). He notes: “SMEs think they are very local. They think they are small but they actually have a potential for international branding.” Perhaps these problems are symptomatic of a larger behavioural issue, which will take considerable time and effort to transform. But some of the hurdles facing SMEs can be addressed today by educating and equipping them with tools toward creating long-term business growth.
Through the internet, SMEs can easily network with various professionals who could assist their business growth and innovation. Outsourcing and crowdsourcing platforms, like our website Freelancer.com, allow SMEs to hire and learn from experts around the globe, cost- and time-efficiently.
But won’t outsourcing via online jobs platforms take work from local talents? Not exactly.
The jobs that are being outsourced to other countries are simultaneously being replaced with work coming from outside the Philippines, as the internet connects unemployed Filipino professionals with SMEs from around the world. In the past 12 months, we’ve witnessed how active Filipino freelancers on our site have earned a total of nearly US$1 million, and we’re expecting this figure to rocket as Freelancer.com’s continuing expansion into developed countries bring more SMEs requiring Filipino talent.
Meanwhile, we’ve also observed how SMEs in the Philippines are likewise hiring Filipino professionals on the platform. In fact, Filipinos are the second preferred workers by Filipino employees—just closely behind India. We are optimistic that as these SMEs survive and become bigger, they will eventually face the need to integrate local professionals to assist with their day-to-day operations.
It must be stressed that the most pressing dilemma requiring due focus is the survival of Filipino SMEs. By getting them past the spectre of shutdown, we can optimise them to increase local hiring rates—and ultimately, decrease unemployment.
Providing opportunities for SMEs and the working population to earn and innovate is a step towards progress. However, this is just one of the strategies – better infrastructures and widespread access to health and education are needed as well to bridge the yawning inequality. The internet is not a cure-all, but it may just kickstart a long-overdue revolution.
The views expressed are of the author, and e27 may not necessarily subscribe to them
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