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Philippines challenging as a new offshore location

David Mitchell | Aug. 22, 2008
Despite a number of different initiatives that have been announced recently there are still major challenges to be faced.

Open source is set to be another area of focus. A new technology park, located at the University of the Philippines, is due to open in December and will focus on developing businesses around open source. However, the key will be to ensure that the open source businesses that are created develop high-value assets, rather than developing as low-value services businesses. This needs to happen to ensure that the Philippine businesses have a greater ability to scale; something that will be crucial, given the labour shortfall that was highlighted above. Working on open source software, hardware and peripherals is all part of the initial open source plan for the latest technology park. Again there are local roots to the open source activity, just as there were for SaaS. Here the creation of an open source electronic health record application (released in beta in May this year) is a good example.

The planned creation of two additional technology parks in the next year or two creates further opportunity to extend the areas of focus. However, there is a danger that too many areas of focus emerge in the Philippine ICT economy, meaning that it will become difficult to gain the depth of skills required to develop globally competitive business that can sustain premium rates as opposed to the low-rate economy associated with much outsourcing and BPO activity.

As SVP IT Research, David Mitchell is responsible for Ovum's global IT research activities. 


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