Bi-Monthly Economic Update | Transnational Diversified Group 2015 BUSINESS UPDATES See new article in our Harvard Business Review section Bi-Monthly Newsletter Issue No. 197 Mar 1 – Mar 15, 2017 Economy Bi-Monthly Economic Update | Transnational Diversified Group 2017 1 Exports seen rising by 7% in 2017 Lars Wittig, country manager of Regus Philippines, noted that while megacities like Metro Manila command much more economic and political attention, smaller cities are the locus of urban growth and urban population concentration. Wittig identified five cities as the best places to launch start-ups. Topping his list is Quezon City, which has been recognized by the Philippine Chamber of Commerce and Industry as last year’s Most Business-Friendly Local Government Unit. Next is Makati City, considered as the Financial Capital and the Wall Street of the Philippines. Third is the capital of the Philippines, Manila, which is the heart of the Philippine economy, and a major center for finance, tourism and real estate. Fourth is Angeles City outside Metro Manila as it is home to an emerging technology industry and its economy is also based on tourism, games and amusements. Fifth on his list is Pasay City, home to the country’s four major airport terminals, national government offices, financial institutions and one of the biggest malls in Southeast Asia. Read more: https ://goo.gl/mdNxM2 Source: Manila Bulletin, 2017 March 2 Exports of goods and services may increase by 7 percent this year, assuming merchandise exports would maintain its favorable growth, said Senen M. Perlada, director of the Department of Trade and Industry’s Export Marketing Bureau and EDC executive director. The target for this year was supposed to be the same as that for 2016, from flat to a 3-percent growth. However, latest data showed that prospects might be more optimistic for exports. “Seven percent is the highest. That is if we continue the export performance in January, and sustain a double-digit growth in the next six months,” he added. In January, exports jumped by 22.5 percent to $5.130 billion from $4.187 billion in the same month last year, according to the latest data from the Philippine Statistics Authority (PSA). This is the first time that exports posted double-digit growth in over three years. Read more: https://goo.gl/qNt6pw Source: Inquirer, 2017 March 13 Five best PH cities to launch a start-up business
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Bi-Monthly Economic Update | Transnational Diversified Group 2015
BUSINESS UPDATESSee new article in our Harvard Business Review section
Bi-Monthly Newsletter
Issue No. 197
Mar 1 – Mar 15, 2017
Economy
Bi-Monthly Economic Update | Transnational Diversified Group 2017 1
Exports seen rising by 7% in 2017
Lars Wittig, country manager of Regus Philippines,noted that while megacities like Metro Manilacommand much more economic and politicalattention, smaller cities are the locus of urbangrowth and urban population concentration.
Wittig identified five cities as the best places tolaunch start-ups.
Topping his list is Quezon City, which has beenrecognized by the Philippine Chamber ofCommerce and Industry as last year’s MostBusiness-Friendly Local Government Unit.
Next is Makati City, considered as the FinancialCapital and the Wall Street of the Philippines. Thirdis the capital of the Philippines, Manila, which is theheart of the Philippine economy, and a majorcenter for finance, tourism and real estate. Fourthis Angeles City outside Metro Manila as it is hometo an emerging technology industry and itseconomy is also based on tourism, games andamusements.
Fifth on his list is Pasay City, home to the country’sfour major airport terminals, national governmentoffices, financial institutions and one of the biggestmalls in Southeast Asia.
Read more: https://goo.gl/mdNxM2
Source: Manila Bulletin, 2017 March 2
Exports of goods and services may increase by 7percent this year, assuming merchandise exportswould maintain its favorable growth, said SenenM. Perlada, director of the Department of Tradeand Industry’s Export Marketing Bureau and EDCexecutive director.
The target for this year was supposed to be thesame as that for 2016, from flat to a 3-percentgrowth. However, latest data showed that prospectsmight be more optimistic for exports.
“Seven percent is the highest. That is if we continuethe export performance in January, and sustain adouble-digit growth in the next six months,” headded.
In January, exports jumped by 22.5 percent to$5.130 billion from $4.187 billion in the same monthlast year, according to the latest data from thePhilippine Statistics Authority (PSA). This is the firsttime that exports posted double-digit growth in overthree years.
Read more: https://goo.gl/qNt6pw
Source: Inquirer, 2017 March 13
Five best PH cities to launch a start-up business
BUSINESS UPDATESBi-Monthly Economic Update | Transnational Diversified Group 2015
2
The Association of Southeast Asian Nations(ASEAN) is set to endorse a policy document formigrant workers.
“Everyone agrees on the necessity that our workers,whether in our countries or abroad, should beprovided with protection that they need,” saidSecretary Judy Taguiwalo of Department of SocialWelfare and Development (DSWD).
Taguiwalo, who chaired the 17th ASEAN Socio-Cultural Community (ASCC) meeting in Iloilo City,said they are pushing for the passage of the ASEANInstrument to Implement the ASEAN Declaration forthe Protection and Promotion of the Rights ofMigrant Workers.
Taguiwalo said this declaration was passed duringthe ASEAN meeting in Cebu a decade ago, but hasyet to be fully implemented.
Aside from protection of migrant workers, themeeting also endorsed the ASEAN Leaders’Declaration on the Role of Civil Services as Catalystfor Achieving ASEAN Community Vision 2025.
“We hope that these documents will carry that spiritthat it is from the people that will eventually benefitthe people,” Taguiwalo added.
Read more: https://goo.gl/NLWdDv
Source: Manila Bulletin, 2017 March 9
Southeast Asian economies and the EuropeanUnion (EU) agreed to work toward resumingstalled free-trade agreement (FTA) talks andcounter a trend toward protectionism.
In a joint statement, economic ministers of the 10-member Association of Southeast Asian Nationsand European Trade Commissioner CeciliaMalmstrom said the global economic outlook hasimproved. But they expressed caution overuncertainties arising from “growing protectionistand inward-looking policy stances” that oftenblame trade for the loss of jobs because ofautomation and industrialization.
Negotiations on an EU-Asean FTA were launched in2007 but were suspended in 2009 due todifferences over ambitions for the plan. The vastgap between affluent EU nations and developingcountries in Southeast Asia also complicated thetalks.
The EU then started bilateral trade negotiationswith individual Asean members. It has FTAs withVietnam and Singapore and is still negotiatingagreements with Thailand, Malaysia, Indonesia andthe Philippines. Other Asean members areMyanmar, Cambodia, Lao PDR and BruneiDarussalam.
Read more: https://goo.gl/AcmylN
Source: Business Mirror, 2017 March 12
A. E. C.
Asean, EU agree to resume free-trade negotiations
Bi-Monthly Economic Update | Transnational Diversified Group 2017
ASEAN to endorse policy document for migrant workers
BUSINESS UPDATESBi-Monthly Economic Update | Transnational Diversified Group 2015Bi-Monthly Economic Update | Transnational Diversified Group 2017
3
Shipping and Logistics
IBM and Danish transport company Maersk saidthey were working together to digitize, manage,and track shipping transactions using blockchaintechnology.
The technology, which powers the digital currencybitcoin, enables data sharing across a network ofindividual computers. It has gained worldwidepopularity due to its usefulness in recording andkeeping track of assets or transactions across allindustries.
The blockchain solution being built by the twocompanies is expected to be made available to theocean shipping industry later this year, according toa joint statement from International BusinessMachines Corp and the container unit of A.P.Moller-Maersk. It would help manage and track thepaper trail of tens of millions of shipping containersglobally by digitizing the supply chain process fromend to end.
This will enhance transparency and make thesharing of information among trading partnersmore secure.
IBM and Maersk intend to work with a network ofshippers, freight forwarders, ocean carriers, portsand customs authorities to build the new globaltrade digitization product, the companies said. Theproduct is also designed to help reduce or eliminatefraud and errors and minimize the time productsspend in the transit and shipping process.
Read more: https://goo.gl/1tLa77
Source: Manila Bulletin, 2017 March 7
Mober eyes to serve SMEs’ logistics needs
Technology startup company Mober is optimisticthat more small and medium enterprises will tapits affordable, reliable, safe and secure same-daydelivery services for their businesses.
“With Mober, we don’t discriminate whether yourcargo is big or small, we adjust to our clients’ cargorequirements. For bulky items, we have a wideselection of trucks and vans that can accommodatejust about everything you need to move,” Moberfounder and chief operating officer Dennis Ng said.
Mober’s service fulfills the same day deliveryrequirements for precious goods of businesses thatneed to get to their end users intact and with itsquality safe.
“We have closed vans and mini trucks for variousbulky item requirements and we are steadilyexpanding our fleet of vehicles and partnerships tobe able to service the SME sector with their cargoneeds,” Ng said.
Ng said Mober tapped a wider network ofpartner/drivers and expanded its in-house fleet toaccommodate the expanding demand for itsservices.
Read more: https://goo.gl/N3nze9
Source: Manila Standard, 2017 March 13
IBM and Maersk in blockchain tie-up for shipping industry
BUSINESS UPDATESBi-Monthly Economic Update | Transnational Diversified Group 2015
Tourist arrivals in Clark up by 42,622 in 2016
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Surge in Chinese tourism to the Philippines
Warmer ties with China and increased investmentmay augur a period of sustained growth for thePhilippine tourism sector, further bolstering itsalready significant contribution to the economy.
This year the Philippines expects the number ofChinese tourists to cross the 1 million mark, a 49%increase on the roughly 670,000 hosted in 2016,according to the Department of Tourism (DoT).
Key to the increase in traffic was Beijing’s lifting of atravel advisory for the Philippines in October of lastyear following a visit by President Duterte.
Even with the advisory in place, China continued tobe a major source of tourists. In 2016 it sent thethird-largest number of visitors, at 11.3% of thetotal, after South Korea with 1.48 million (about 25%of the total) and the US with 870,000 (14.6%).
Data issued by the National Economic andDevelopment Authority in late January showed amore than 250% increase in visa applications lodgedby Chinese citizens, to 1,400 a day -- though part ofthis surge could be the seasonal impact of thecelebration of the Chinese New Year on Jan. 28.
The expected jump in arrivals has already prompteda rise in investment in the hospitality segment.DoubleDragon Properties, a local developer, recentlyannounced plans to spend P6.6 billion ($131 million)to double its room capacity to 2,000 by 2020.
Read more: https://goo.gl/lP6amT
Source: Business World, 2017 March 3
Clark’s world-class tourism facilities and servicescontinue to attract foreign and local visitors asseen in the slight improvement in last year’stourist arrivals in 2016.
In the 2016 Annual Report, Clark DevelopmentCorp. (CDC) reported the freeport generated a totalof 1,916,700 tourists in 2016 or 2 percent highercompared to 1,874,078 in 2015.
Between 2015 and 2016, arrival numbers to ClarkInternational Airport grew 8 percent to 457,283from 423,332 in 2015.
There were 1,106,535 visitors registered as hotelguests of which 352,882 were day tourists in 2016.
This figure included seven hotels in 2015 and 13hotels in 2016. Other major visitor points includepassenger arrivals in Clark airport, educationaltours, guests at Clark Museum, special events anduse of parks and open spaces here.
Of the total tourist arrivals in 2015, CDC reportedthat 1,001,980 were hotel guests inside theFreeport, while 448,766 were same day tourists.
Read more: https://goo.gl/y5yEd1
Source: Manila Bulletin, 2017 March 10
Travel and Tourism
Bi-Monthly Economic Update | Transnational Diversified Group 2017
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Technology
Bi-Monthly Economic Update | Transnational Diversified Group 2017
The irritating and oftentimes difficult to readCAPTCHA will soon be no more with the latestupdate that Google is rolling out for the infamousverification system.
The newest thing for “humanity verification” is“invisible CAPTCHA” where users will no longerhave to input anything to prove that they are notjust a bunch of ones and zeros trying to infiltrate awebsite.
This most recent update forgoes any human inputby simply analyzing the user’s browsing behavior.“Google in general—and this is certainly aphilosophy that we adhered to when I was there—believed that anything that is good for the internet,is good for Google,” says ShumanGhosemanjumder, a former Google employee, inan interview with Popular Science.
Less time spent figuring out confusing CAPTCHA, orproving you’re not a robot, would certainly equateto more time consuming content in the internet. Sowhat makes people’s internet browsing life bettershould be good as well for Google’s interests.
The government will need the rest of the year tofirm up the national broadband network (NBN)project after President Rodrigo Duterte signed theorder for its implementation.
Rodolf Salalima, Department of Information andCommunications Technology (DICT) secretary, saidthat putting up the nationwide NBN will cost aboutP75 billion when “starting from scratch.”
The service may be up and running by 2018, with theDICT already receiving feelers from interestedsuppliers that include three Chinese firms and “someEuropeans,” among others, Salalima added.
The government will use the NBN as an avenue tomake its services available to the public, with thepotential to connect far-flung areas online asanother option.
It was reported earlier that the government isconsidering three scenarios for the broadband plan:put up physical infrastructure in the countryside toserve government needs; lay out infrastructure forgovernment use and for lease by telco serviceproviders to provide services in far-flung areas; andthe government itself becoming the third telcoprovider.
Denis Villorente, DICT undersecretary, however saidthey still have to smoothen the plan, with the“business model” for the project still on the drawingboard.
Read more: https://goo.gl/eHbzjX
Source: Inquirer, 2017 March 12
P75B nat’l broadband up in ’18
CAPTCHA will soon stop bothering netizens’ browsing lives
Read more: https://goo.gl/3bVnEP
Source: Malaya, 2017 March 10
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6Bi-Monthly Economic Update | Transnational Diversified Group 2017
How Companies Can Champion Sustainable
DevelopmentBy Bhaskar Chakravorti
The problem is that the private sector is not easily organized to create or bolster public goods.Despite the calls for corporate social responsibility and arguments for creating shared value,companies have not been moving very quickly to increase their activity in this space, with theexception of a few early movers.
I have previously made the case that the UN’s Sustainable Development Goals (SDGs) have thepotential to provide, for the first time, a framework for mobilizing companies to invest insustainable development in an ongoing and scalable way, while also pursuing their own businessinterests. And some companies have taken the lead. Unilever, for example, has found that itssustainable living brands are growing 30% faster than the rest of its business and in 2015 deliverednearly half the company’s total growth. Like Unilever, there are companies in other industriesforming a vanguard of early movers, merging their business goals with sustainable development. Icall this new breed of companies the “inclusive innovators.”
In order to understand this group better and learn how to extend their innovations to other firmsin their industries, we launched a yearlong research effort over 2015–2016 to study 20 inclusiveinnovators spanning 10 industries. Our primary findings are reported here. A key lesson is at thevery outset: figuring out where to begin.
Navigating the SDGs: Where to Begin?
One of the first challenges for any company familiarizing itself with the 17 SDGs (listed in the chart below) is simply contending with their sheer breadth. The list of goals and publicity materials from the UN looks like a colorful game board and includes big ideas such as “no poverty,” “life on land,” and “peace and justice.”
Given political climates around the
world and a new wariness aroundinternational cooperation, theprivate sector could find itself in thehot seat: trying to pick up the slackon big issues from climate change tosustainable development. Thisdemand for taking on a larger rolemay come not only from advocacyand watchdog groups but also fromcustomers, investors, partners, andemployees.
Of course, the SDGs are meant to becomprehensive, a systemic approach tocomplex problems of sustainabledevelopment at a planetary level. But whenconfronted with a construct such as this,companies may struggle with where tobegin. Trying to cover it all would beoperationally overwhelming and a waste ofresources. Some goals may be too broad ortoo distant. For example, “no poverty” iseasy to write off as too far removed from acompany’s business and value chain. Whilebreadth is a virtue for a public policyaudience, managers need ways to prioritizeand focus resources.
The 20 companies we studied did notattempt to cover the spectrum of the SDGs;they made choices and allocated theirresources. Some were more focused thanothers. For example, Southwest Airlinesfocused on responsible consumption andon climate action; Johnson &Johnson/Janssen chose good health andpartnerships for the goals; and MasterCardchose good jobs and economic growth,reduced inequalities, and partnerships.
Bi-Monthly Economic Update | Transnational Diversified Group 2017
How Companies Can Champion Sustainable
DevelopmentBy Bhaskar Chakravorti
Some leaders worry that focusing on specific goals might lead to others being “orphaned.” Ericsson,for example, has assigned each executive team member as a champion of one of the SDGs. However,our research suggests that such dispersion of efforts is not advisable, as it tends to splinter resources,delink the SDG investments from company strategy, and have the paradoxical effect of makingorphans out of all the SDGs because none gets the sustained strategic investments needed.
To get company managers with practical concerns started on the “where to begin” decision, wepropose three steps, based on the experience of the inclusive innovators:
1. Segment the SDGs. First, segment the SDGs relevant to your business into a “story” that helpsestablish a hierarchy and captures some of the logic about which ones are most relevant to you. Oneway to do this is to organize the SDGs into three main focus areas: people, planet, and policyprinciples. It’s useful to clarify which goals are end-state goals and which are intermediate goalsdesigned to get to larger goals. You can see these focus areas in the chart below.
Bi-Monthly Economic Update | Transnational Diversified Group 2017
How Companies Can Champion Sustainable
DevelopmentBy Bhaskar Chakravorti
2. Identify where the company fits. The next step involves identifying which goals intersect withsome part of the company or its value chain’s activities. These are places where the company canhave meaningful impact and that can, in turn, have the widest and deepest impact in larger society.For example, Coca-Cola organized its activities around three areas: water, women, and well-being.Agribusiness Olam officially declared zero hunger its priority, and partnerships the way it wouldimplement its initiatives. Our research revealed that it had an impact on clean water, good jobs andeconomic growth, and innovation and infrastructure as well.
BUSINESS UPDATESBi-Monthly Economic Update | Transnational Diversified Group 2015
3. Make the business case. The last step is to identify business case factors that establish thecommercial argument for where to play and why. Earlier research on the question of business casedrivers found that there was no shortage of them among the companies we studied. The mostfrequently cited motivation was the reduction of business risks from the potential disruption ofoperations or risk of reputational damage, which was cited 38% of the time. This was followed by themotivation to adhere to industry norms of transparency, traceability, environmental responsibility,and other accepted standards, cited 27.6% of the time, and winning share in current markets andestablishing a beachhead with future customers, cited 25.3% of the time. Building goodwill with keyinternal stakeholders was the least cited motivation, at 9%. At a macro level, the SDGs represent atleast $12 trillion of market opportunities in just four areas: food and agriculture, cities, energy andmaterials, and health and well-being.
At a company level, the weaving of the business case and the case for sustainability is complex. Theinclusive innovators we studied have developed that integrated case and a narrative about it. Formaximum effectiveness, it comes from the top of the organization. Here’s how Art Peck, CEO of Gap,described it when we posed the question to him: “Our sustainability investments are based on thephilosophy that we’re all connected, and positive actions we take to improve people’s lives and theplanet are also essential to running a good business. When the people who make our clothes work insafe, fair conditions, they’re more productive and help us create better products. When we lowergreenhouse gas emissions and reduce waste, we contribute to an environment in which our businesscan thrive.”
In 2017 it is imperative for a much wider swath of companies to recognize the alignment of businesssustainability with sustainable development, as the private sector is called upon to fill a void createdby the public sector’s retreat on broad, long-term global goals. It is equally critical to not allow thecomplexity and comprehensiveness of the goals to become a deterrent to corporate action.
Bi-Monthly Economic Update | Transnational Diversified Group 2017
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We welcome all comments and suggestions on how to make this
Given that the SDGs provide a powerful frameworkfor companies to mobilize, organize both internallyand with partners, and take action, the first step is tostop trying to visualize the entire SDG framework,and frame it as a hierarchy of connected andsequenced goals. This helps prioritize and build alogic for choice and to integrate the strategy forbuilding a sustainable business with the company’sstrategy for engaging in sustainable development.Companies that take this first step can join theleague of the inclusive innovators.
