TRAINING KNOWLEDGE WORKERS IN THE PHILIPPINES Prof. Jorge V. Sibal U.P. SOLAIR August 2003

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Transcript of TRAINING KNOWLEDGE WORKERS IN THE PHILIPPINES Prof. Jorge V. Sibal U.P. SOLAIR August 2003

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TRAINING KNOWLEDGE WORKERS IN THE PHILIPPINES Prof. Jorge V. Sibal U.P. SOLAIR August 2003 Slide 2 Training Knowledge Workers Knowledge Work is the key competitive edge of business enterprises facing the competitive world of globalization. Slide 3 Training Knowledge Workers A knowledge worker is anyone who makes a living out of creating, manipulating or disseminating knowledge. Slide 4 Types of Knowledge Workers High Level Knowledge Workers are mostly mental workers like professionals (doctors, teachers, consultants, etc.), managers, entrepreneurs, administrators, etc. (Peter Drucker) Slide 5 Types of Knowledge Workers Knowledge Technologists are those who work with their hands and brains in the information technology (IT) industry. (Peter Drucker) Slide 6 Training Knowledge Workers Knowledge workers Key assets of modern enterprises. The challenge to companies is how to develop and harness their knowledge workers through training and education strategies. Slide 7 Philippine Economy in Transition Globalization have exposed Philippine industries to intense competition from imported products and foreign competitors. Slide 8 Transition to a Knowledge-based Economy The transition of local firms from assembly line operations to knowledge-based operations for survival, growth and competitiveness became a must. Slide 9 Transition to a Knowledge-based Economy Philippine industries in order to survive, grow and compete, have to reinvent themselves from the second-wave technologies (assembly-line production) to the third wave knowledge-based operations. Slide 10 Transition to a Knowledge-based Economy As an effect of globalization, many companies have divided their workforce into a small group of professionals and technical staff and a large group of casual workers. Slide 11 Transition to a Knowledge-based Economy 1. Professionals and technical staff receive a wide range of benefits and training making them highly skilled knowledge workers 2. Casual workers minimum wages and benefits mandated by the Labor Code which resulted in relatively high wages despite their low level of skills. Slide 12 Transition to a Knowledge-based Economy We now have dual skills level among our labor force. On the one hand, the country is fast gaining competitive advantage in the category of knowledge workers. On the other hand is a large pool of unskilled and low skilled workers. Slide 13 Transition to a Knowledge-based Economy Since 1998, the Philippine skilled labor is number one in terms of quality, affordability most of our skilled workers are the ones filling up the middle-level positions in high tech industries of Malaysia, Singapore and other countries. Slide 14 Transition to a Knowledge-based Economy However, the greater bulk of the unskilled and low skilled labor force is mostly absorbed by the informal sector in the service and agriculture industries characterized by low productivity and low wages. Slide 15 Transition to a Knowledge-based Economy This has become big burden for the economy since the Philippines is losing its competitive advantage in labor intensive processing to lower wage Asian neighbors like China, Vietnam, Cambodia, Nepal, Indonesia, Thailand, etc. Slide 16 The Countrys Preparedness in Entering a Knowledge-based Economy Many Philippine manufacturing and agricultural industries were generally unprepared. These include: appliance paper poultry Slide 17 The Countrys Preparedness in Entering a Knowledge-based Economy The notable exception is the export industry led by the electronics subsector accounting for 75% of the total exports at present. Slide 18 The Countrys Preparedness in Entering a Knowledge-based Economy These industries have become globally competitive as a result of transformation via technological leapfrogging through selective knowledge-based adaptation and operations. Slide 19 The Countrys Preparedness in Entering a Knowledge-based Economy The net outcomes of the performance of Philippine industries are not very promising- an over-all decline of performance as a proportion of GDP, from 40% in 1980 to slightly less than 35% in 2000 and manufacturing declining from 27% of output to 25%. Slide 20 The Countrys Preparedness in Entering a Knowledge-based Economy Non-traditional electronics export firms on the other hand picked-up from a very low base in the 1990s (Lim and Montes) This has resulted in t he increase of professional and technical workers (or knowledge workers) by almost two times from 1956 to 2000 as a percentage of the total number of occupations. Slide 21 The Countrys Preparedness in Entering a Knowledge-based Economy The manufacturing industries have been adapting modern processes, employing more knowledge workers, and less of the low skilled labor force. This phenomenon is also known as jobless growth. Slide 22 The Countrys Preparedness in Entering a Knowledge-based Economy Professional and technical workers have increased by almost two fold from 1956 to 2000 as a percentage of the total number of occupations of employed people mainly as result of the growth of electronics industries. Slide 23 The Countrys Preparedness in Entering a Knowledge-based Economy Proprietors, managers and administrators declined in numbers and percentage to total occupation from 1956 to 1971. This illustrates the degree of streamlining of bureaucracies of industries in order to make them lean and competitive during the liberalization period. Slide 24 The Countrys Preparedness in Entering a Knowledge-based Economy From 1981 to the present, the number of knowledge workers is increasing in both numbers and percentage of occupation showing the importance of high-level knowledge workers in globally competitive enterprises. Slide 25 Analysis of Preparedness of the Philippines it will eventually use third-wave technologies, and technological leapfrogging (Posadas and Roque, 1987) in transforming the mostly second-wave manufacturing and services industries to the knowledge- based operations. Slide 26 Analysis of Preparedness of the Philippines Technological leapfrogging or reverse engineering is the strategy of mastering selective third-wave technologies and at times bypassing certain technologies of the second-wave that are already obsolete. (Posadas, 2000) Slide 27 Analysis of Preparedness of the Philippines It involves the buying or renting of high technologies from abroad, in order to analyze and learn, and eventually improve on them, thereby gaining replicative and innovative capabilities. Slide 28 Analysis of Preparedness of the Philippines Technological leapfrogging in the Philippines is applied differently compared to the experiences of Japan, South Korea, Taiwan, and lately Malaysia, China and India which required strong State intervention. Slide 29 Analysis of Preparedness of the Philippines In the Philippines, the strategy is also spearheaded by the State but the main actors are the private industry, their associations and link with the academe. Slide 30 Analysis of Preparedness of the Philippines The private sector selects the high technologies as well as finances the R&D efforts that are normally coursed through the academe. Slide 31 Analysis of Preparedness of the Philippines A measure of the technological standing of the Philippines in Asia is the Information Society Index (ISI) where it is ranked ahead of Thailand, China, Indonesia and Pakistan. Slide 32 Table 2- Information Society Index Ranking in Asia (2000) Category Country RankScores Skaters Japan 104,093 Score: above 3,500 Singapore 114,014 Striders Taiwan183,177 Score: above 2,000 Korea22 2,931 Slide 33 Table 2- Information Society Index Ranking in Asia (2000) Category CountryRank Scores Sprinters Malaysia 35 1,583 Score: above 1,000 Phils. 47 1,012 Thailand 48 1,010 StrollersChina 51 915 Score: below 1,000Indonesia 52 888 Pakistan 55 719 Source: The Worldpaper, www.worldpaper.comwww.worldpaper.com Slide 34 Analysis of Preparedness of the Philippines Another index that will benchmark the Philippines performance with other countries in the Asia Pacific region is the Knowledge-based Economy Development Index (KDI). The country is behind Malaysia, Thailand and China but is ahead of Indonesia and India. Slide 35 Country Position by Components of KDI in Asia Pacific (2000) (top 22 countries included) COUNTRYKNOWLEDG E INDEX COMPUTER INFRASTRUC -TURE INFOSTRUC- TURE EDUCATION AND TRAINING R&D & TECHNOLO GY Japan283101 Australia766611 New Zealand131114717 South Korea1516111613 Singapore161416196 Malaysia17 16 Thailand1819211419 Slide 36 Country Position by Components of KDI in Asia Pacific (2000) (top 22 countries included) COUNTRYKNOWLE DGE INDEX COMPUT ER INFRAST RUC- TURE INFOSTR UC-TURE EDUCATI ON AND TRAININ G R&D & TECHNOL OGY China1918191820 Philippines2022182018 Indonesia21 2021 India222022 Slide 37 The National HRD Program of the Philippines The Philippines enjoys a comparative advantage in HRD. It has always given top priority to education. Slide 38 The National HRD Program of the Philippines Compared with other countries in Asia and the Pacific, the Philippines fares well in providing budgets for education as well as in enrolment in tertiary education. Slide 39 The National HRD Program of the Philippines 2001 APEC survey of 81 MNCs cited in a Philippine country paper (Tesda, 2003) concluded that the large pool of educated, English- speaking and highly trainable manpower continued to be the driving force in attracting foreign capital to the country. Slide 40 The National HRD Program of the Philippines Despite the favorable HRD efforts of the government the country still suffers skills shortages especially in the managerial, professional and technical knowledge workers. Slide 41 The National HRD Program of the Philippines According to TESDA, this is caused by the faulty educational system, the policy of encouraging labor export and the continuing technical c