Number of Pages : 55 leaves
Adviser : Prof. Edison D. Cruz
Abstract
The technology entrepreneurship ecosystem in the Philippines is steadily growing and the number of viable start-up ventures is on the rise. Technopreneurs are considered to be the key drivers of economic growth and innovation. There is a need for accelerator programs to assist start-up technopreneurs scale and gain traction in their ventures from the ideation to development phase to commercializing their product.
The study was divided into 3 phases : firstly, the status of the Philippine entrepreneurial ecosystem was evaluated according to the World Economic Forum ecosystem pillars. Secondly, the perspectives and insights of stakeholders of the technopreneurial start-up ecosystem were discussed and analyzed. Lastly, the proposed accelerator program was described according to the guide to building an accelerator program by Nesta. The proposal was based on a triple helix innovation model with government, industry and academe interaction, to be able to give a balanced and holistic approach to the program.
Firstly, this study aims to evaluate current status of the Philippines regarding the components of an entrepreneurial ecosystem pillars as described by the World Economic Forum. The components include having accessible markets, funding and finance, regulatory framework and infrastructure, major universities as catalysts, human capital/workforce, support system of mentors and advisers, education and training, and cultural support. The following are the key findings :
1. There is a great potential for accessible markets in the Philippines for technological and digital start-ups. In a population of 105 million, almost 40% have internet access and smartphone penetration and still growing. Improvement of Information and Communication Technology (ICT) infrastructure is needed to be able to continually grow the market. In terms of investors, the demand for start-ups and technological ventures is greater than the supply.
2. The Philippine economy is growing and steadily improving. It has been reported that the GDP increased at an average of 6.7% from 2012 to 2014. The investor confidence rating also improved from "stable" to "positive" in 2014. This is indicative of a safer environment for business that would eventually lead to surge in foreign direct investments, and more jobs for the expanding workforce.
3. The regulatory framework and infrastructure needs improvement. There is a need to strengthen intellectual property and patent regulations. Tax policies and ease of transactions and processing for start-up ventures are needed to create a business friendly environment. Government, regulatory bodies and policy makers have essential roles and must be updated with latest trends to be able to adapt to needs of technopreneurs.
4. There is a need for attention and focus on universities to act as catalysts. The university acts as source of talent, skill and knowledge. Universities can foster innovation and entrepreneurship in students. Initiatives such as UP Enterprise and other technology business incubators are starting up to gain traction. The Stanford University-Silicon Valley model can be localized and can possibly be a key to a robust start-up ecosystem that links academe with entrepreneurial innovation opportunities.
5. Human capital and workforce component needs improvement. The global demand for Filipino graduates is indicative of a working higher education environment. There is a need for a stronger research culture in universities to prepare for the demand side of science and technology innovation.
6. The support system comprising of mentors, advisers and investors is emerging and growing. Accelerator and incubator programs are in the infancy stage; however, expertise and experience in the domain of ICT and other technological developments are growing. The key is to build more innovation hubs that start-up ventures can access and foster to build a more robust ecosystem.
7. There is a great potential for the Philippines in terms of education and training. According to STRIDE (2014), the quality of science, technology, engineering and mathematics (STEM) related education is at par with global standards. However the local supply is greater than the demand, leading to skilled people migrating out of the country. Training for innovation driven areas, especially in high demand ICT area can be further improved and given focus.
8. There is a need to improve the cultural support in terms of cultivating strong culture of research, as well as risk and failure tolerance for Filipinos. It is generally observed that budding researchers have the capacity for creativity and innovation and can be further improved.
This is indicative a great potential for a robust and growing start-up entrepreneurial ecosystem for the Philippines. There is a need to address the need of entrepreneurs and requirements of investors. The role of government and academe are most essential to continually build on the foundation for start-up ventures. The following are the key findings taken from the perspectives of the various stakeholders :
1. Technopreneurs, in the start-up phase of their ventures, need a reliable team with complementary skill set, source of funding for capital expenditures, and access to network of expert mentorship. Often, start-up founders rely on bootstrapping for funding but the emergence of incubator and accelerator programs facilitates ease of doing business. There is a perceived need for accelerator programs that actively sources out promising start-ups and provides funding and mentorship.
2. According to investors, there is enough source of funding available in the country; however there are not enough viable take the risk of not being able to recover their investments. A balance between investing in more potential start-ups to create a stir in the community and encourage more start-ups and choosing a few but viable and profitable ventures to achieve return on investment must be hurdled.
3. According to current accelerator program mentors, there is a need for a sustainability model for them to be able to continuously support start-ups, as they do not immediately become profitable in the early years of the business. Accelerator programs can create a stir in the innovation and entrepreneurship ecosystem and must be sufficiently supported and become sustainable.
4. The government's role in laying a strong foundation for start-up ventures in terms of policy making, tax incentives and ease of business processing is essential. It is commendable that there are government initiatives to building a start-up ecosystem, such as filing of the bill "Start-up Business Act" and recently creating the Department of Information and Communications Technology. In terms of budget appropriation, policy making and enacting regulations, the government's role is unprecedented towards the goal of achieving 500 start-ups with total funding of USD 200 million and valuation of USD 2 billion by the year 2020 unveiled in the roadmap for technology ventures.
5. The academe has a significant role in cultivating a culture of research, innovation and entrepreneurship and become a source of talent, skills and knowledge. The emergence of technology business incubators in universities is indicative of laying groundwork for technology venture founders to building a research university similar to Stanford University- Silicon Valley model and other successful university based innovation hubs all over the world.
The accelerator program proposed was then drafted based on the perspectives of the stakeholders and the Nesta guideline to building an accelerator program. The proposed accelerator program is a collaboration among government, industry and academe players that has the objective of creating a thriving and sustainable mentorship and co-learning network from industry experts; financial support funding from government; and start-up talent and skill set from the academe. It is proposed to have multiple accelerator programs with different focus and specialization such as ICT, software development, agriculture, biotechnology, and other relevant fields. The funding structure can initially come from government budget appropriation as well as private funding from investors. The aim is to provide equity free funding to be able for start-ups to achieve their maximum potential growth. In order to become sustainable, the program can diversify revenue streams by running events to attract private investors and venture capitalists for additional financial and non financial resources that would help start-ups scale and gain traction. Targeted marketing and clear communication will be employed to attract start-ups with highest growth potential. Screening criteria, selection process and start-up program package were adapted from successful global and local accelerator program as reference.
The study was divided into 3 phases : firstly, the status of the Philippine entrepreneurial ecosystem was evaluated according to the World Economic Forum ecosystem pillars. Secondly, the perspectives and insights of stakeholders of the technopreneurial start-up ecosystem were discussed and analyzed. Lastly, the proposed accelerator program was described according to the guide to building an accelerator program by Nesta. The proposal was based on a triple helix innovation model with government, industry and academe interaction, to be able to give a balanced and holistic approach to the program.
Firstly, this study aims to evaluate current status of the Philippines regarding the components of an entrepreneurial ecosystem pillars as described by the World Economic Forum. The components include having accessible markets, funding and finance, regulatory framework and infrastructure, major universities as catalysts, human capital/workforce, support system of mentors and advisers, education and training, and cultural support. The following are the key findings :
1. There is a great potential for accessible markets in the Philippines for technological and digital start-ups. In a population of 105 million, almost 40% have internet access and smartphone penetration and still growing. Improvement of Information and Communication Technology (ICT) infrastructure is needed to be able to continually grow the market. In terms of investors, the demand for start-ups and technological ventures is greater than the supply.
2. The Philippine economy is growing and steadily improving. It has been reported that the GDP increased at an average of 6.7% from 2012 to 2014. The investor confidence rating also improved from "stable" to "positive" in 2014. This is indicative of a safer environment for business that would eventually lead to surge in foreign direct investments, and more jobs for the expanding workforce.
3. The regulatory framework and infrastructure needs improvement. There is a need to strengthen intellectual property and patent regulations. Tax policies and ease of transactions and processing for start-up ventures are needed to create a business friendly environment. Government, regulatory bodies and policy makers have essential roles and must be updated with latest trends to be able to adapt to needs of technopreneurs.
4. There is a need for attention and focus on universities to act as catalysts. The university acts as source of talent, skill and knowledge. Universities can foster innovation and entrepreneurship in students. Initiatives such as UP Enterprise and other technology business incubators are starting up to gain traction. The Stanford University-Silicon Valley model can be localized and can possibly be a key to a robust start-up ecosystem that links academe with entrepreneurial innovation opportunities.
5. Human capital and workforce component needs improvement. The global demand for Filipino graduates is indicative of a working higher education environment. There is a need for a stronger research culture in universities to prepare for the demand side of science and technology innovation.
6. The support system comprising of mentors, advisers and investors is emerging and growing. Accelerator and incubator programs are in the infancy stage; however, expertise and experience in the domain of ICT and other technological developments are growing. The key is to build more innovation hubs that start-up ventures can access and foster to build a more robust ecosystem.
7. There is a great potential for the Philippines in terms of education and training. According to STRIDE (2014), the quality of science, technology, engineering and mathematics (STEM) related education is at par with global standards. However the local supply is greater than the demand, leading to skilled people migrating out of the country. Training for innovation driven areas, especially in high demand ICT area can be further improved and given focus.
8. There is a need to improve the cultural support in terms of cultivating strong culture of research, as well as risk and failure tolerance for Filipinos. It is generally observed that budding researchers have the capacity for creativity and innovation and can be further improved.
This is indicative a great potential for a robust and growing start-up entrepreneurial ecosystem for the Philippines. There is a need to address the need of entrepreneurs and requirements of investors. The role of government and academe are most essential to continually build on the foundation for start-up ventures. The following are the key findings taken from the perspectives of the various stakeholders :
1. Technopreneurs, in the start-up phase of their ventures, need a reliable team with complementary skill set, source of funding for capital expenditures, and access to network of expert mentorship. Often, start-up founders rely on bootstrapping for funding but the emergence of incubator and accelerator programs facilitates ease of doing business. There is a perceived need for accelerator programs that actively sources out promising start-ups and provides funding and mentorship.
2. According to investors, there is enough source of funding available in the country; however there are not enough viable take the risk of not being able to recover their investments. A balance between investing in more potential start-ups to create a stir in the community and encourage more start-ups and choosing a few but viable and profitable ventures to achieve return on investment must be hurdled.
3. According to current accelerator program mentors, there is a need for a sustainability model for them to be able to continuously support start-ups, as they do not immediately become profitable in the early years of the business. Accelerator programs can create a stir in the innovation and entrepreneurship ecosystem and must be sufficiently supported and become sustainable.
4. The government's role in laying a strong foundation for start-up ventures in terms of policy making, tax incentives and ease of business processing is essential. It is commendable that there are government initiatives to building a start-up ecosystem, such as filing of the bill "Start-up Business Act" and recently creating the Department of Information and Communications Technology. In terms of budget appropriation, policy making and enacting regulations, the government's role is unprecedented towards the goal of achieving 500 start-ups with total funding of USD 200 million and valuation of USD 2 billion by the year 2020 unveiled in the roadmap for technology ventures.
5. The academe has a significant role in cultivating a culture of research, innovation and entrepreneurship and become a source of talent, skills and knowledge. The emergence of technology business incubators in universities is indicative of laying groundwork for technology venture founders to building a research university similar to Stanford University- Silicon Valley model and other successful university based innovation hubs all over the world.
The accelerator program proposed was then drafted based on the perspectives of the stakeholders and the Nesta guideline to building an accelerator program. The proposed accelerator program is a collaboration among government, industry and academe players that has the objective of creating a thriving and sustainable mentorship and co-learning network from industry experts; financial support funding from government; and start-up talent and skill set from the academe. It is proposed to have multiple accelerator programs with different focus and specialization such as ICT, software development, agriculture, biotechnology, and other relevant fields. The funding structure can initially come from government budget appropriation as well as private funding from investors. The aim is to provide equity free funding to be able for start-ups to achieve their maximum potential growth. In order to become sustainable, the program can diversify revenue streams by running events to attract private investors and venture capitalists for additional financial and non financial resources that would help start-ups scale and gain traction. Targeted marketing and clear communication will be employed to attract start-ups with highest growth potential. Screening criteria, selection process and start-up program package were adapted from successful global and local accelerator program as reference.
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