THE Fourth Industrial Revolution is here—and the Philippines is gearing up.
Characterized by the use of advanced technology, which blurs the boundaries between the physical and digital worlds, the so-called Industry 4.0 has amplified its presence amid the widespread shift to digital while coping with the health and economic ravages wrought by Covid-19.
To prepare for this, spurring investments related to the Fourth Industrial Revolution and retooling of the labor force are a must. Doing these is seen to help the country to not only adapt but also thrive amid the revolution.
With disruptions in business models and creation of new sectors, the Department of Trade and Industry (DTI) has stressed the importance of developing an industrial policy. Setting the roadmap can provide a clear path for the local industries as they participate in the global value chain amid technology-led changes in the business landscape, it explained.
“Our strategic mission right from the start was clear and simple but is no means an easy task: we need to propel more and better jobs, create investments, and achieve a shared prosperity for all,” DTI Secretary Ramon M. Lopez said in a recent event.
Emergence of i3S
IN relation to this, the trade official said they have been implementing the Inclusive Innovation Industrial Strategy (i3S), which is centered on innovation and science and technology.
“This new industrial policy aims at growing innovative and globally competitive manufacturing, agriculture and services, while strengthening their linkages into domestic and global value chains,” he said. “In doing so, innovation is crucial in addressing the challenges not only from globalization but also from automation, robotics, artificial intelligence (AI) and other new technologies.”
Lopez stressed that the government should craft policies that can help the industries take advantage of market opportunities, which can result in inclusive growth and job creation.
Attracting investments
INVESTMENTS in advanced technology are encouraged to allow more business activities.
The trade department, in fact, made it clear that related investors will be incentivized through the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.
“Under CREATE, incentives are being provided to activities and projects that would introduce product and process innovation as well as digital transformation,” Trade Undersecretary Rafaelita M. Aldaba told the BusinessMirror.
In addition, the tax reform law “provides incentives to innovative companies offering new products and services that embed these new technologies,” she added. These include smart products, smart cities, predictive agriculture, resilient technology, educational technology and financial technology.
The perks are based on the investment priority plan under CREATE, which enumerates sectors eligible for incentives. Lopez identified earlier the following as critical industries: 1) electrical and electronics; chemical and pharmaceuticals; 2) machinery and transport; 3) agriculture and agribusiness; 4) information technology-business process management; 5) research and development; 6) and artificial intelligence, automation, robotics and digital technologies.
Some of the perks include availment of income-tax holidays of four to seven years, depending on the level of technology and location of the project. This will then be followed by 10 years of enhanced deductions or 5-percent special corporate income tax for export-oriented firms.
‘Reskilling’ labor force
RIZALINA Mantaring, Management Association of the Philippines (MAP) national issues committee chairperson, urged the companies to equip their employees with the much-needed skills.
“To be able to compete requires us to develop skills in these technologies and understand the underlying science. Companies will have to invest in reskilling their workforce, but also remember that obsolescence is accelerating and what you know today will probably be obsolete in three to five years,” she told the BusinessMirror.
The firms, she said, should develop programs for continuous learning that can develop skills such as complex problem solving, critical thinking and creativity.
In June, the DTI launched the Philippine Skills Framework (PSF) initiative. It is an interagency effort aimed at developing the needed skills and competencies of the human capital and workforce in Industry 4.0.
“This is essential so that our industries can increase and sustain their competitiveness under the Fourth Industrial Revolution and move us closer to our goal of becoming an industrialized nation. Through this goal, we aim to have our people achieve better employment opportunities that will provide them with a higher income,” Lopez said during the launch.
While the PSF program will enhance the skills of the workforce, the DTI said this will also help employers in crafting a progressive human resource management and talent development plans amid emerging market demands.
“Through the PSF initiative, we would be able to provide a chance for everyone to participate in good-quality, meaningful work. Our aspiration is to continue to build on the PSF to ensure it remains agile, adapts to broader disruptions and changing trends in the jobs and skills landscape, and use it to unlock a reskilling revolution in the country,” Aldaba said.
Embracing Industry 4.0 with AI
“WE are embracing the new technologies emerging from Industry 4.0,” Lopez told the BusinessMirror, citing efforts to boost AI as one way of doing it.
The emerging technologies such as AI have become a “must-have” for the companies and not just “nice to have,” the DTI chief explained.
In May, the DTI launched the AI roadmap, which aims to increase adoption and utilization of AI in various sectors in the country to advance industrial development. These include agriculture, automotive sector, smart manufacture, health-care services and business-process outsourcing.
The national AI strategy aims to boost the regional and global competitiveness of the local industry with the use of AI to drive innovation. In addition, it targets to identify key areas in research and development and technology application for investment.
Lopez said the roadmap would recommend ways to enable collaboration among the government, industry and academe to foster national development.
The roadmap also intends to set up the private sector-led National Center for AI Research (N-CAIR), which will serve as the shared hub for research and development in AI. The consultancy services to be offered by N-CAIR, Lopez said, will be beneficial for the government agencies, industries and other research centers in the country.
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