By means of Justine Irish D. Table, Reporter
THE PHILIPPINES collapsed the worst result in the International Institute’s World Digital Competitiveness Ranking for Management Development (IMD), mainly due to declining talent and scientificFic concentration.
The country dropped two places to 61st ranked out of 67 economies and scored 45.18 in the World Digital Competitiveness Ranking 2024 conducted by the World Competitiveness Center.
This was the Philippines’ lowest ranking since the report started in 2017.
Of the fourteen economies in Asia and the Pacific, the Philippines ranks thirteentheonly before Mongolia (64e).
Singapore ranks first in the global digital competitiveness index with 100 points, followed by Switzerland and Denmark.
The ranking measures a country’s ability to adopt and explore digital technologies to transform government practices, business models and society at large.
It measures a country’s capacity based on three key factors: knowledge or the quality of human capital, excellence of technological infrastructure and readiness for the future.
The Philippines ranks 64the in the knowledge factor, 58e in future readiness and 56e in the field of technology.
“The decline is mainly caused by a decline in talent and scientific concentration. There is also a downturn in technology and regulatory frameworks,” José Caballero, senior economist at the IMD World Competitiveness Center, said in an email.
The country saw the strongest decline in the technology pillar, falling five places from 51st last year.
According to the IMD, the country showed weakness in the ease of starting a business (65e), enforcing contracts (64e), communications technology (66e), and secure internet servers (64e).
However, the Philippines showed promising performance in investment in high-tech exports (2i.e) and telecommunications (9e).
The country has also fallen one place in terms of knowledge and future readiness, while the country scores low in terms of talent (60e), training & education (62i.e) and scientificFIC concentration (61st).
According to IMD, the Philippines’ strength in knowledge lies in its science graduates (22i.e) and are female researchers (2i.e).
For future preparedness, IMD said the country showed strength in Flexibility and adaptability (19e place).
“In terms of readiness for the future, although there has been an improvement in the adaptive attitude, that is, societal attitudes towards new technologies, business agility and the integration of information technology are stagnant,” he added .
According to Mr Caballero, prioritizing the development of relevant talent and the country’s R&D (research and development) capabilities are key to improvement.
“In addition, there is room for improvement in the regulatory framework’s support for the development of new technologies, [while] Strengthening the adoption and integration of new technologies across the social, private and public sectors is also fundamental,” he added.
The Rizalino S. Navarro Policy Center for Competitiveness of the Asian Institute of Management (AIM), the IMD’s local partner institute in the report, said the Philippines was the weakest in knowledge.
“[This] regardingFdetermines the level of our human capital and our investments in it. We lag behind regional peers in improvements in basic education and training,” Jamil Paolo S. Francisco, executive director of the AIM Rizalino S. Navarro Policy Center for Competitiveness, said in an email.
However, he said the drop in the rankings does not mean no progress has been made, but simply that other economies are improving at a faster pace.
“Basic education remains the basis for any further training needed to adapt to rapidly changing technologies and economic demands. We have to get that right first before we can expect to reap the benefitsFit is a technological advancement,” he added.
If the country wants to improve its position in the rankings, Mr Francisco said the country must start by getting the basics right.
“We need more sustainable investments in education and infrastructure – start with a solid foundation in basic education and skills development to harness technological advances,” he said.
“In addition, creating an enabling environment in terms of regulation, access to resources and access to markets is crucial. Modernizing rules and frameworks to meet the new needs and realities of businesses, consumers and workers is essential for progress,” he added.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort, asking for comment, said the country’s declining performance in digital competitiveness could be attributed to the rise of new technologies.
“The rapid pace of digitalization worldwide with the emergence of new technologies such as artificial intelligence is widening the digital divide between countries, in line with the wealth gap,” Mr Ricafort said in a Viber message.
“Like [well-off] countries continue to digitize, [the more they] would be far ahead of those who are worse oFf and far behind,” he added.
Therefore, he said the Philippine economy urgently needs to boost digitalization.
“There is an urgent need for the Philippines to further digitalize… to have a more competitive infrastructure and to create an enabling environment more conducive to greater technological advancements that will boost the country’s productivity,” it added he added.
GEOPOLITICAL TENSION
The IMD report also examined the key challenges hindering the progress of digital competitiveness in the countries, such as geopolitical tensions.
Mr. Caballero said the geopolitical rivalry between the US and China is among its drawbacksFlaws that could jeopardize the way other countries compete on a global level.
“Geopolitical rivalry… fragments the digital landscapeFWe examine not only how other countries develop and use digital technologies, but also their ability to compete globally,” Caballero said in a statement on Thursday.
“It is therefore likely that a new tariff will be introducedFfs will include national security-related elements. That is, tensions over technology and security concerns may also increase, causing the US to further restrict China’s access to advanced technology,” he added.
Newly elected US President Donald J. Trump is trying to impose a tariff of 60% or higherFfs on all Chinese goods and a universal tariff of 10%Ff as soon as he accepts office in January 2025.
Mr Caballero said geopolitical tensions have led to increased competition for digital dominance, resulting in the fragmentation of global digital governance.
“Such fragmentation could in turn hinder cooperation on issues such as cybersecurity and data privacy, which are essential for a balanced and secure digital ecosystem,” he said.
“Furthermore, by hindering cooperation, fragmentation can increase digital inequality between countries,” he added.