The virulence and lethality of the novel coronavirus is expected to have a profound impact on the world. With global production grinding to a halt and supply chains disrupted, the World Trade Organization (WTO) sees global trade to fall between 13% to 23%. While for its part, the International Labor Organization (ILO) estimates that COVID-19 will result in a loss of 195 million jobs worldwide.
In the Philippines, COVID-19 has triggered massive lockdowns and work stoppages to mitigate the spread of the virus. Unfortunately, these extreme measures are expected to further dampen economic growth. In fact, the Philippine Institute for Development Studies (PIDS) estimates the damage to the economy will amount to P1 trillion to P2.5 trillion. Moreover, the Department of Labor and Employment (DoLE) expects a loss of around 5 million jobs with 45,000 Overseas Filipino Workers expected to return to the country due to the global slowdown.
Although there is much gloom and doom in the air nowadays, the current pandemic is also fast tracking the adoption of digital transformation (Dx) strategies resulting in new and innovative practices. Globally, we are witnessing unprecedented changes of the IT industry to better support these emerging business models. Notable examples of these new practices are the ubiquity of digital payments, new work from home arrangements, and the widespread use of online learning applications.
As a strategy, Dx entails the need to rethink and transform an organization’s strategic perspective, business processes and culture. Usually viewed as the movement from organization-based IT systems to multiple cloud-based environments, Dx-inspired practices also include connected workers, integrated ICT platforms, advanced analytics, and remote operations. Furthermore, the adoption of Dx strategies underscores the need for a robust digital infrastructure that facilitates major changes in organizations through the following: a.) creating new business models; b.) streamlining of operations, thus decreasing cost; c.) improving access to products and services; and, d.) enhancing the customer experience.
Overall, success in a Dx-enabled business environment will be defined by an organization’s agility through its ability to respond to emerging trends and consumer demand as well as its capacity to achieve integration with suppliers, thus ensuring rapid time-to-value product development.
In the public sector, Dx can also be viewed as a strategy to further eliminate the country’s digital divide and support good governance. The government’s Philippine Digital Transformation Strategy (2017-2022) encapsulates the overall plan to attain the country’s Dx goals. However, given the adverse impact of COVID-19, there is a new sense of urgency that demands for its recalibration and immediate implementation.
Moreover, there is a need to go beyond the “business as usual” mentality and not settle for a strategy that is simply an amalgamation of existing e-government and other legacy plans. Rather, there is an urgent need to develop a new roadmap that identifies its key milestones and targets. It also needs to designate the critical areas in our society where Dx can foster growth and innovation.
For instance, micro-, small-, and medium-scale enterprises (MSMEs) will benefit from this roadmap through the creation of digital markets that integrates suppliers and customers into a single marketplace.
While local governments can create their customized service portals to integrate citizen, business, and property registries as well as use data analytics to aid local decision making, these service portals also provide a venue to promote transparency and openness as well as encourage citizen participation in governance.
Another area of opportunity is education. The shift to an online learning regimen will now require the creation of digital content, the use of new learning management systems and the development of new skills. If done correctly, Dx in education can transcend the limitations of physical learning and create new opportunities for access to education in underserved areas of the country.
Of course, all of these will not be possible without improving our country’s current digital infrastructure. We need scalable, cost efficient and secure technologies that can guarantee the much-needed access and bandwidth requirements. However, for this to happen, the national government must invest in last-mile access and work with industry to expand digital infrastructure and increase access in areas that need it most. Key to this is identifying policy and bureaucratic roadblocks at both the national and local government levels that are slowing the expansion of digital infrastructure
As the pandemic is fast tracking the adoption of Dx strategies, the government should simultaneously fast track the country’s digital infrastructure strategies and development, as well.
Lastly, it is also important for policy makers to foresee the need to harmonize our existing laws and programs. Our laws on ease of doing business, innovation, and the national ID system are excellent baseline policies that can be used for the country’s Dx initiatives. However, it is also imperative to reexamine these policies to ensure that common goals are defined, and persistent problems are addressed.
Dr. Sherwin E. Ona is an Associate Professor in the Political Science Department, De La Salle University, and a Non-Resident Fellow at the Stratbase ADR Institute.