TRAINING KNOWLEDGE WORKERS IN THE PHILIPPINES Prof. Jorge V. Sibal U.P. SOLAIR August 2003
Training Knowledge Workers • Knowledge Work is the key competitive edge of business enterprises facing the competitive world of globalization.
Training Knowledge Workers • A knowledge worker is anyone who makes a living out of creating, manipulating or disseminating knowledge.
Types of Knowledge Workers • High Level Knowledge Workers are mostly mental workers like professionals (doctors, teachers, consultants, etc.), managers, entrepreneurs, administrators, etc. (Peter Drucker)
Types of Knowledge Workers • Knowledge Technologists are those who work with their hands and brains in the information technology (IT) industry. (Peter Drucker)
Training Knowledge Workers • Knowledge workers • Key assets of modern enterprises. • The challenge to companies is how to develop and harness their knowledge workers through training and education strategies.
Philippine Economy in Transition • Globalization have exposed Philippine industries to intense competition from imported products and foreign competitors.
Transition to a Knowledge-based Economy • The transition of local firms from assembly line operations to knowledge-based operations for survival, growth and competitiveness became a must.
Transition to a Knowledge-based Economy • Philippine industries in order to survive, grow and compete, have to reinvent themselves from the second-wave technologies (assembly-line production) to the third wave knowledge-based operations.
Transition to a Knowledge-based Economy • As an effect of globalization, many companies “have divided their workforce into a small group of professionals and technical staff and a large group of casual workers.”
Transition to a Knowledge-based Economy 1. Professionals and technical staff • receive a wide range of benefits and training making them highly skilled knowledge workers 2. Casual workers • minimum wages and benefits mandated by the Labor Code which resulted in relatively high wages despite their low level of skills.
Transition to a Knowledge-based Economy • We now have dual skills level among our labor force. • On the one hand, the country is fast gaining competitive advantage in the category of knowledge workers. • On the other hand is a large pool of unskilled and low skilled workers.
Transition to a Knowledge-based Economy • Since 1998, the Philippine skilled labor is • number one in terms of quality, affordability • most of our skilled workers are the ones filling up the middle-level positions in high tech industries of Malaysia, Singapore and other countries.
Transition to a Knowledge-based Economy • However, the greater bulk of the unskilled and low skilled labor force is mostly absorbed by the informal sector in the service and agriculture industries characterized bylow productivity and low wages.
Transition to a Knowledge-based Economy • This has become big burden for the economy since the Philippines is losing its competitive advantage in labor intensive processing to lower wage Asian neighbors like China, Vietnam, Cambodia, Nepal, Indonesia, Thailand, etc.
The Country’s Preparedness in Entering a Knowledge-based Economy • Many Philippine manufacturing and agricultural industries were generally unprepared. • These include: • appliance • paper • poultry
The Country’s Preparedness in Entering a Knowledge-based Economy • The notable exception is the export industry led by the electronics subsector accounting for 75% of the total exports at present.
The Country’s Preparedness in Entering a Knowledge-based Economy • These industries have become globally competitive as a result of transformation via technological leapfrogging through selective knowledge-based adaptation and operations.
The Country’s Preparedness in Entering a Knowledge-based Economy • The net outcomes of the performance of Philippine industries are not very promising- • an over-all decline of performance as a proportion of GDP, from 40% in 1980 to slightly less than 35% in 2000 • and manufacturing declining from 27% of output to 25%.
The Country’s Preparedness in Entering a Knowledge-based Economy • Non-traditional electronics export firms on the other hand picked-up from a very low base in the 1990s (Lim and Montes) • This has resulted in the increase of professional and technical workers (or knowledge workers) by almost two times from 1956 to 2000 as a percentage of the total number of occupations.
The Country’s Preparedness in Entering a Knowledge-based Economy • The manufacturing industries have been adapting modern processes, employing more knowledge workers, and less of the low skilled labor force. This phenomenon is also known as “jobless growth”.
The Country’s Preparedness in Entering a Knowledge-based Economy • Professional and technical workers have increased by almost two fold from 1956 to 2000 as a percentage of the total number of occupations of employed people mainly as result of the growth of electronics industries.
The Country’s Preparedness in Entering a Knowledge-based Economy • Proprietors, managers and administrators declined in numbers and percentage to total occupation from 1956 to 1971. This illustrates the degree of streamlining of bureaucracies of industries in order to make them lean and competitive during the liberalization period.
The Country’s Preparedness in Entering a Knowledge-based Economy • From 1981 to the present, the number of knowledge workers is increasing in both numbers and percentage of occupation showing the importance of high-level knowledge workers in globally competitive enterprises.
Analysis of Preparedness of the Philippines • it will eventually use third-wave technologies, and technological leapfrogging (Posadas and Roque, 1987) in transforming the mostly second-wave manufacturing and services industries to the knowledge-based operations.
Analysis of Preparedness of the Philippines • Technological leapfrogging or reverse engineering • is the strategy of mastering selective third-wave technologies and at times bypassing certain technologies of the second-wave that are already obsolete. (Posadas, 2000)
Analysis of Preparedness of the Philippines • “It involves the buying or renting of high technologies from abroad, in order to analyze and learn, and eventually improve on them, thereby gaining replicative and innovative capabilities”.
Analysis of Preparedness of the Philippines • Technological leapfrogging in the Philippines is applied differently compared to the experiences of Japan, South Korea, Taiwan, and lately Malaysia, China and India which required strong State intervention.
Analysis of Preparedness of the Philippines • In the Philippines, the strategy is also spearheaded by the State but the main actors are the private industry, their associations and link with the academe.
Analysis of Preparedness of the Philippines • The private sector selects the high technologies as well as finances the R&D efforts that are normally coursed through the academe.
Analysis of Preparedness of the Philippines • A measure of the technological standing of the Philippines in Asia is the Information Society Index (ISI) where it is ranked ahead of Thailand, China, Indonesia and Pakistan.
Table 2- Information Society Index Ranking in Asia (2000) • CategoryCountryRankScores • Skaters Japan 10 4,093 • Score: above 3,500 Singapore 11 4,014 • Striders Taiwan 18 3,177 • Score: above 2,000 Korea 22 2,931
Table 2- Information Society Index Ranking in Asia (2000) • CategoryCountryRankScores • Sprinters Malaysia 35 1,583 • Score: above 1,000 Phils. 47 1,012 • Thailand 48 1,010 • Strollers China 51 915 • Score: below 1,000 Indonesia 52 888 Pakistan 55 719 Source: The Worldpaper, www.worldpaper.com
Analysis of Preparedness of the Philippines • Another index that will benchmark the Philippines performance with other countries in the Asia Pacific region is the Knowledge-based Economy Development Index (KDI). The country is behind Malaysia, Thailand and China but is ahead of Indonesia and India.
Country Position by Components of KDI in Asia Pacific (2000) (top 22 countries included)
Country Position by Components of KDI in Asia Pacific (2000) (top 22 countries included)
The National HRD Program of the Philippines • The Philippines enjoys a comparative advantage in HRD. • It has always given top priority to education.
The National HRD Program of the Philippines • Compared with other countries in Asia and the Pacific, the Philippines fares well in providing budgets for education as well as in enrolment in tertiary education.
The National HRD Program of the Philippines • 2001 APEC survey of 81 MNCs cited in a Philippine country paper (Tesda, 2003) concluded that the • “large pool of educated, English-speaking and highly trainable manpower continued to be the driving force in attracting foreign capital to the country.”
The National HRD Program of the Philippines • Despite the favorable HRD efforts of the government • the country still suffers skills shortages especially in the managerial, professional and technical knowledge workers.
The National HRD Program of the Philippines • According to TESDA, this is caused by the faulty educational system, the policy of encouraging labor export and the continuing technical changes happening in the country.
S&T and R&D • The Philippines needs a lot of improvement in science and technology (S&T) and in research and development (R&D).
S&T and R&D • Dr. Roger Posadas (2000) assessed that the overall condition of S&T as well as R&D in the country has remained “weak and substandard”.
S&T and R&D • Posadas cited the ff. indicators: • number of R&D scientists and engineers in the Philippines • only 155 per million which is less than half of the 1980 UN target of 380 for less developed nations.
S&T and R&D • Among the lowest in the ASEAN, the figures in NICs like South Korea and Taiwan range from 1,000 to 2,000, and in highly developed countries, 2,000 to 4,000.
S&T and R&D • The budget allocated for R&D • one of the lowest in the Asia Pacific region at a per capita of 68 cents in 1984. • As a percentage of GDP, the country’s R&D expenditure is only 0.22% in 1992 which is below the 1980 UN target of 1% for less developed countries.
S&T and R&D • NICs usually spend 1-1.8% of GDP, and developed countries, 2-3%. R&D done by private sector is likewise low at 23.6% contribution to R&D expenses compared 50-80% in developed countries and NICs.
S&T and R&D • In terms of inventions, the country fared better. • The total number of patents in the Philippines awarded from 1983-1984 in either the USA or the European market is 52.
S&T and R&D • This is more than that of Indonesia (37) and Thailand (33), but less than that of Malaysia (66), Singapore (213), New Zealand (566), South Korea (3,036), Australia (4,701) and Japan (204,597).
ICT Infrastructure • The Philippines still needs to improve its infrastructure for information and communication technology (ICT).