Reflections on Business and Innovation: A Journey through the Philippines

Published 10/23/2024 in Scholar Travel Stipend

Written by David Tang-Quan | 10/23/2024

Over the past year, I’ve had the opportunity and privilege to travel through a number of Asian countries, meeting a variety of startup founders and learning about how innovation and the practice of business-building both stays the same and differs across geographies.

This past August, I visited the Philippines, again having the opportunity to explore its entrepreneurial environment and contrast it with my prior experiences in Taiwan and India, as well as the familiar backdrop of the United States’ innovation landscape. The Philippines has seen significant growth in its startup scene, driven by a confluence of factors, including technological advancements, government initiatives, and the entrepreneurial spirit of its young population.

A Thriving Startup Ecosystem
In recent years, the Philippines has garnered attention as a rising star in Southeast Asia’s startup ecosystem. The Global Startup Ecosystem Report 2023 highlights Manila as an emerging hub, benefiting from a young, tech-savvy population and a strong drive towards digitalization. Government support through initiatives such as the Philippine Innovation Act and the Startup Venture Fund has helped spur growth in key sectors, including fintech, healthtech, and edtech. According to Startup Rise Asia, the Philippines has over 8,700 startups, including three unicorns.

The country’s startup ecosystem still faces challenges, particularly in securing funding compared to more mature markets like Taiwan or India. However, the government has made strides to bridge this gap by offering grants, tax breaks, and incubation programs aimed at encouraging entrepreneurship. In terms of financing, the Philippine economy still lags behind that of Taiwan and India’s. Despite these challenges, the Philippine startup ecosystem is growing rapidly, with the potential to become a major player in the region.

Learning from Taiwan: Technology and R&D

During my previous trip to Taiwan, I witnessed firsthand the strength of its innovation and entrepreneurial culture, particularly in high-tech industries. Taiwan’s heavy investment in research and development (R&D), which accounts for nearly 4% of its GDP, has allowed it to emerge as a global leader in sectors like semiconductors and wireless technology. In contrast, the Philippines, while also investing in digital infrastructure, is still in the early stages of developing an innovation-driven economy.

One of the key differences I noticed is how the Philippine startup scene is driven by addressing local challenges. Much of the innovation here is focused on solving issues such as financial inclusion, access to healthcare, and education. In contrast, Taiwan’s focus is more globally oriented, leveraging its manufacturing prowess and technical expertise to create products for international markets. Philippine startups, such as Gcash and Kumu, have become household names by focusing on mobile payment solutions and digital content platforms, respectively. These companies are succeeding by addressing uniquely Filipino problems in a rapidly digitalizing society.

India’s Bold Approach to Social Entrepreneurship

During my trip to India earlier this year, I explored a startup ecosystem brimming with energy, much like the Philippines, but with a distinct focus on social entrepreneurship​. Startups in India are increasingly dedicated to solving large-scale social and environmental issues, whether through sustainable agriculture, clean energy, or digital inclusion. The Philippines shares a similar narrative, with many of its startups tackling issues of access and inequality. Social enterprises like Hapinoy, which provides micro-financing solutions to small community stores, are prime examples of how Filipino entrepreneurs are leveraging technology to drive social impact.

However, there are notable differences between the two. India’s digital infrastructure, driven by initiatives like Digital India and Startup India, has set a strong foundation for the country’s rapid startup growth. The Philippines, while making progress with programs like the National Broadband Plan, still struggles with slow internet speeds and a lack of widespread access in rural areas, factors that hinder the scalability of startups in the country.

Comparing the Philippines to the U.S. Startup Ecosystem

Returning from Southeast Asia, I can’t help but reflect on how the U.S. startup ecosystem compares to what I have observed abroad. The U.S. remains the global leader in entrepreneurship, largely due to its mature venture capital markets, risk-taking culture, and vast network of accelerators and incubators. Silicon Valley, in particular, epitomizes this blend of innovation, investment, and talent, producing unicorns at a pace unmatched by any other region in the world.

In contrast, while the Philippines shares a strong entrepreneurial spirit, its ecosystem is still developing. One of the significant challenges facing Filipino startups is access to capital, especially compared to the vast sums available in the U.S. As I visited co-working spaces in Manila, I could see the ambition and drive in the entrepreneurs I met, but there was also a palpable sense of frustration with the limited funding opportunities. Many founders expressed their desire to expand regionally but highlighted the challenges posed by a lack of sufficient resources.

That said, the Philippines offers something that even the U.S. struggles with at times—resilience and resourcefulness. In a country where many startups operate in environments with limited resources, entrepreneurs have learned to make the most of what they have. This scrappy, do-it-yourself attitude is reminiscent of the early days of Silicon Valley, where resource constraints drove creativity and innovation. The Philippines, with its growing pool of talent and government-backed initiatives, is poised to leap forward, but it will need more sustained investment and global partnerships to truly thrive.

Reflections on My Journey

Each of my journeys has offered a new perspective on the various ways in which countries are fostering entrepreneurship. In Taiwan, innovation is driven by technology and global competitiveness, while India embraces social impact and digital inclusion. The Philippines, in its own unique way, is carving a niche by addressing local challenges, with a focus on digitalization and inclusion. These entrepreneurial ecosystems may vary in size, scope, and focus, but they share a common trait—an indomitable spirit to innovate, disrupt, and create solutions that make a difference.

My visit to the Philippines has reinforced my belief in the importance of understanding local contexts when building businesses. Just as I learned in India, where scent marketing thrived due to cultural preferences​, Filipino startups are succeeding by addressing the specific needs of their communities. While they may not yet have the global reach of their U.S. or Taiwanese counterparts, the startups here have the potential to grow into regional and eventually global players.

In conclusion, the Philippines represents a promising, albeit nascent, startup ecosystem with much to offer. By continuing to invest in digital infrastructure, fostering a supportive regulatory environment, and encouraging both local and foreign investment, the country can further solidify its place as a hub for Southeast Asian innovation. My journey through these entrepreneurial landscapes has left me inspired by the creative solutions being developed across the globe, and I look forward to witnessing the continued rise of Philippine startups in the coming years.