This is the speech delivered by Senator Mar Roxas during the Cebu ICT 2005 event last June 22.

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I�m happy to be here in Cebu and as I�m sure many of you particularly those who likewise came in from Manila. It�s our way of expressing to each other that sometimes, one needs to leave Manila to get a fresh perspective on matters.

I�m so proud and please to be in attendance here at this first Cebu International IT Fair.

I remember my coming here about four years ago to the first Cebu IT Summit, what it was then called �Cebu IT Summit� � it was in the early part of this journey where the IT-Service or E-enabled space in the business process was not a very well known or well publicized concept or activity, even if it was as being actively promoted already by government through the Department of Trade and Industry.

About five years ago, the industry leaders and the DTI all convened in the ballroom similar to this and wrote out the � I wouldn�t call it a master plan, but guiding principles that would govern private sector and government sector participation and involvement in the development of this space.

One of the key considerations that was present in that of sort of guiding principles was that it would be private sector driven and true to form. If it was private sector driven meaning with as little government intervention as possible.

What was once a nascent small sort of under reported and unreported or unknown industry has now blossomed to what it is today a billion dollars in service export in the last year, eight billion pesos in investments, hundred thousand jobs, and an annual absorption capacity of more that 30,000 jobs a  year.

So clearly there is vibrancy, excitement, and there is a private sector entrepreneurial spirit initiative that is present in this space. And all of this success really is due to all of the hard effort of the members of the private sector who are all here this morning.

IT in business

The success that we�re experiencing today in a manner of speaking is IT � what I would describe is IT in business meaning using or employing the capabilities that IT is able to provide in the conduct of business. Hence, a lot of the �IT-ability� that is now being undertaken in our country is in what is known as business process outsourcing - whether that�s a call center or transcription or engineering, architecture or legal transcription whether legal or medical and so on and so forth.

IT as a business

It is in the nature of IT in the conduct of business that we have outstanding success. I believe that even as we are successful in this space, we are also now beginning to undertake in a much more aggressive fashion IT as a business, not in the conduct of business but IT as a business. So we have seen now the sprouting of independent third party operations that were once not very much present in our country but now, in an ever increasing number, coming here, making the investments, whether in start-up fashion or in mezzanine fashion, but clearly coming in to our country and doing IT as a business.

Historically the IT activities in our country were internal operations of the large multinationals. Because of the evolution of the way businesses are conducted globally, we now see third party outsourcing of the same activities.

We�re very happy to note that not only are we successful in the activities of IT in business, creating all those jobs and investment and export service, but now as well we are growing IT as a business. We�re now beginning to become much more aggressive in IT as a business.

IT for business

However, I think what is more important for our domestic economy as well as for our standing in the international global IT space is if we also begin to think about IT for business. What do I mean by that and what is the challenge that is represented by IT for business?

Today in our country we have about 870,000 firms registered, both of the Securities and Exchange Commission as well as in the Department of Trade and Industry. Sadly however, 99% of those firms are registered as micro, small and medium enterprises. None of those 99% are in this room here today.

They create about 25% of total gross value added in our economy. They provide about 1/3 of the total labor for our entire economy but one can see clearly that it is asymmetric.

While representing nearly a 100% of total registered enterprises, they only are a quarter of the gross value added and only provide a 3^rd of the employment. 

If you ask now, �So what is the connection between that and IT for business?� Well I believe that the one way that these firms are �affecting� our entire economy can be competitive approach, a modicum of the ability to compete in this globalized and liberalized world were goods and services are going to be coming in and out of borders at a much more accelerated pace.

If they are able to introduce IT in the conduct of their business efforts, such as consolidated procurement like BayanTrade and similar other trading spaces, these are steps in the right direction.

What I�d like for you, the participants here, the private sector, to begin to think about and discuss in your workshop, coffee break, and in your networking sort of interactions, is to begin to think about yes we have been able to create jobs, we have a business model, we were providing services of IT in business for others, yes there are some here who are in the conduct of business of IT as a business. But now, the real big challenge for us is, �How do we begin to think about making IT in the business of all the others in our country?�

Clearly our economic development cannot be dependent on one sector alone even as it is so successful as your sector has been. Our economic development will only come about if we have an ever increasing number of firms that are able to be competitive in this globalized space.

Secretary Santos talked a little bit about JPEPA � the Japan-Philippines Economic Partnership Agreement and the bringing out or the soliciting from the private sector the negotiating points that government must undertake. Even as he has brought this to your attention, there are several other agreements that our country and that the DTI is negotiating in behalf of our country. These include the Free Trade Agreement with China through ASEAN, Free Trade Agreement with India through ASEAN as well, and the Free Trade Agreement of ASEAN with Japan. The United States also. There are sectors in the US that are exploring whether there is any appetite for a free trade agreement with the U.S. and the Philippines and so on and so forth.

So, if are to take a look at the horizon before all of you as practitioners, as business people, as professionals, and as member of the IT community, one will see that the borders are going to continue to come down.

The only question is at what pace. One will see that the phenomenon of integration will continue to happen and again the only question is at what pace. And if one were to take a look around the Philippine economy, one will see that yes, 99% of the firms registered in our country are not players in this space and the only way that they can be players is if there is some melding, collaboration, and integration of what you have and what they have.

In so doing, be able to obtain for themselves the economies of scale, the access to technology, the access to market, access to finance and access to information, and so on and so forth, that you had been able to provide for yourselves, for your clients, and for the participants in the IT space.

By way of ending I�d like to tell you about the book I recently read, it�s called �The World is Flat� by Thomas Friedman. He is a noted thinker and a columnist for the New York Times. Maybe you know him because he wrote the �The Lexus and the Olive Tree� which is a best seller a few years ago.

His whole contention in that book, as the title implies - the world is flat - and what flattens the world is technology, telco, finance, and everything. Technology has enabled some worker to aspire for a job that is being undertaken in some other place. It�s been good for us because now we�re able to perform the jobs that used to be performed in other countries. But it is also a challenge for us because it will allow other countries lower in the economic food chain to aspire for jobs that are in our country - and that is what I�m talking about, not only IT jobs but the 99% of the firms in our economy that don�t have access to these technology. 

The flattening of the world is manifested as you all know by the merger, acquisition and combinations of all the firms. Witness in your own space IBM and the Chinese company Lenovo, the car auto companies are merging.

All of these barriers are coming down in the corporate space because of the pursuit of economies of scale and competitiveness. 

The model of Walmart, one of the successful and most valuable companies in the world, think about it, Walmart does not make any one thing. Walmart simply provides space for products to get to a consumer at an affordable value for money proposition. That is what drives business today. With your inputs and participation in the creation of not only jobs and IT in business, but as well in creation of activity, new technology, and new undertaking, when you undertake IT as a business, then also you will surely and hopefully, in a much more aggressive manner, address IT for business � for businesses here in our country.