Innovation and Ecosystem Development: A weapon to arrest IT-BPM industry slow down

The Information Technology-Business Process Management (IT-BPM) industry in Cebu is now experiencing a slow growth since 2016 and innovations and developing a strong ecosystem are identified as key to help renew the industry’s growth.

Cebu Information Technology-Business Process Management Organization (CIB.O) President Pert Cabataña in his talk at the 2021 Transformation Summit points out the tyranny of the S Curve as the industry’s enemy.

He said the S Curve is a common phenomenon in business, industry and technology where it describes a growth pattern that starts low, later on gains momentum, shows growth accelerates but then growth will slow down and plateau as the markets get saturated.

“We have seen this (S Curve) in the Philippine Electronics Export Industry, we have also seen this in the Cebu Furniture Exports Industry. And inevitably, the same thing is happening to the IT-BPM industry,” Cabataña added.

Growth forecast

Cebu’s IT-BPM industry was enjoying high growth from the years 2005 to 2010 with annual growth rates reaching 30-50%. But from 2010-2016, it was beginning to slow down at 10-15% level. “After 2016, the industry was already experiencing further slow down,” said Cabataña.

In 2019, the industry growth forecast for 2020 to 2022 was at 3-7% and in early 2020 it was adjusted to only 3-5%. “But 2020 saw further deceleration to only 1.4% or $26.7B,” added Cabataña. “No doubt, the pandemic contributed to the deceleration but even before the pandemic, we already saw the start of the slow down. Therefore, the industry entered its slow growth stage”.

When S Curve happens and the industry enters the slow growth stage, Cabataña said three possible futures can occur — renewal, plateau and decline. The lack of innovation and absence of a strong ecosystem are causes for industry stagnation and decline. “Therefore, the way to promote renewed industry growth is to introduce new S Curves through innovation and ecosystem development”.

Fighting the war

As an organization, CIB.O recognizes the need to create weapons to fight the war of preventing industry stagnation and decline.

The CIB.O president said they seek to achieve superiority in 10 years and that innovation and ecosystem development are the overarching concerns of their organization.

Based on their analysis of the industry segments and market potentials, Cabataña said they have identified 5 battlegrounds for generating innovations. These are RPA (Robotic Process Automation) for health management system, RPA for insurance, RPA for general finance, accounting, and operations, eGovernance, and AI (Artificial Intelligence) Research Center.

Cabataña said they are also preparing to build up the ecosystem by accelerating leading-edge technology acquisition, developing breadth and depth of domain expertise, and developing essential soft skills such as communication skills, analytical skills and teamwork.