Market expansion, digital transformation keys to reinvigorating services sector

The government and private sector will strengthen their partnership to expand markets and facilitate the use of digital technologies as they reinvigorate the services sector over the medium term.

“Market expansion and digital transformation will create the pathways for services firms to enhance their strong presence in markets, reach new market segments and buyer geographies, and pursue diversification,” said the Philippine Development Plan (PDP) 2023-2028.

This, as the services sector will shift from its current low productivity level to enable the Philippines to become a modern, productive, and resilient global leader providing higher value-adding and differentiated services, it said.

“The sector will gain strength, speed, and size from the dynamic ecosystem of technology, talent and skills development, intellectual property rights protection, and competition for creativity and innovation,” it added.

To strengthen the creativity and innovation in services value proposition, the Plan said the country aims to increase access of micro, small and medium enterprises (MSMEs) to capital, digital technologies and startups.

“Invest in STI-(science, technology and innovation) driven upgrading of MSMEs, including process, product, organization, and marketing,” it said.

Through the Center for Artificial Intelligence Research (CAIR) and the Department of Trade and Industry’s Regional Inclusive Innovation Centers, MSMEs will gain access to ideas, technology and talents to improve firm performance, it added.

Under the Philippine Innovation Act, the Plan said entities from the creative industries may avail of shared service facilities from the DTI, as well as the infrastructure and research and development (R&D) support programs of the Department of Science and Technology.

It also aims to increase access of MSME management and workforce to training and capacity building programs.

The Plan underscored the importance of enhancing digital, management and entrepreneurship competencies of MSMEs.

Through the implementation of the Digital Workforce Competitiveness Act, it said the DTI, in coordination with relevant government agencies and the private sector, shall establish co-working or shared service facilities to support the development and enhancement of digital skills and competencies of entrepreneurs, especially women, and the current and future workforce.

To expand the market and enhance inter-sectoral linkages, the government will develop the services in the trade framework to maximize trade agreements; and facilitate physical connectivity –aviation, shipping and maritime, and land– and convenience to move people and goods.

To modernize services and reduce overall transport and logistics costs, it will leverage the Public Services Act, Foreign Investment Act, and Retail Trade Liberalization Act (RTLA) amendments to attract global partners and innovators.

“Through partnerships with foreign companies, the private sector will harness the strategic locational advantage and archipelagic endowments of the country by connecting its various islands and destinations,” it added.

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