By Anna Gabriela A. Mogato

A LOCAL public-private start-up incubator expects a rise in the number of technology-based business models in the Philippines next year as digitally innovative businesses continue to increase overseas.

“Start-ups are becoming more and more important in terms of the Philippines’ economy. We’ve had our first unicorn this year, which is a billion-dollar Philippine company [that] has been initially crafted,” said Rene S. Meily, president of QBO Philippines Innovation Hub, in an interview.

“We hope that it’s a beginning of a trend and we’re looking forward to more successes in 2018 — both successful exits in terms of initial public offerings or sales by these start-ups, but we’ve had a great year this year.”

Mr. Meily said he was confident that start-ups would pick up pace locally despite the large number that failed even before launching.

He said it would be hard to pinpoint an accurate target for next year given the nature of the start-ups.

QBO Philippines is a year-old joint project of the Department of Trade and Industry (DTI), Department of Science and Technology (DoST), First Pacific Co., Ltd.’s own incubator and accelerator program for start-ups IdeaSpace Foundation, Inc. and JPMorgan Chase &Co.

Since April, QBO has conducted more than 100 programs, one competition and gained at least 1,700 members. In October, it launched the 2017 Philippine Start-up Report with PWC Philippines to better gauge the environment and standing of start-ups in the country.

For 2018, Mr. Meily’s group is planning to start QBOs in other areas and will be launching an online platform and expand from the coworking space in one of the DTI offices in Makati City in an attempt to increase the number of start-ups. The DoST is targeting to have 1,000 start-ups in the Philippines by 2020.

Diane D. Eustaquio, IdeaSpace Foundation, Inc. executive director, said the country as of 2017 has only 547 start-ups, most of which are in highly urbanized cities such as Metro Manila, Cebu and Davao.

“[Of the total], 84 are ‘dead’ [or not operating]. Among those who are alive, 127 said ‘I don’t know [if the start-up is still alive or not].’ So apart from the dead, we have zombies. Apart from the dead, those moving forward or gaining traction [are] not very many,” she said.

Despite the small numbers, Ms. Eustaquio said that there was no choice but to continue supporting the shift to more digitally inclined business models to achieve sustainability among entrepreneurs given the rising costs of labor, utilities and real estate.

“I think technology-based inclusive businesses are the key. You cannot stop it anymore. The era of big business is dying. The era of big platforms is coming in and that’s why the Googles of this world, the Facebooks of this world, are coming up as the new giants,” she added.

“But the beauty of Facebook and Google is that it’s not a monopoly. It’s creating a platform. A mega-platform for all these small companies to latch on to, clustering them if it’s EdTech (education technology), clustering them if it’s logistics, clustering them if it’s FinTech.”

Ms. Eustaquio said that with their technological and digital dependence, start-ups are helping link smaller companies to larger enterprises through the use of technology, which the DTI is also working on to strengthen the supply chain among micro, small and medium enterprises.

“Large companies still want to [reach more customers but] companies usually reach a certain band of customers and then the net customer segment is too small or too retail for them,” she said.

“So, start-ups are in that band of bridging every retail to the more, the bigger cluster so they are able to curate and cluster in order to connect to the larger companies.”

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