One of the things that I think has been positive, even for the Cebu market is that businesses are starting to be more willing to pay for intangible assets like training or software.
If you see the history of computing, you will note that the United States and the Western Europe were also on the same. In the 60s and 70s, when you buy an IBM mainframe, it was big and expensive, but it came with the software for free. In fact, when Bill Gates, during the hobbyist conference, created the Basic interpreter for the Altair, in what started as among the first product of what would eventually be Microsoft, his ability to do so was expected, but what generated a lot of debate was his proposal that he should charge for it. Upto that time, creating software for microcomputers was something people do as a hobby and whatever you created, you share with everybody for free.
But then the rest they say is history, and if there is any big contribution of Microsoft, it was not that it not only helped created a generation of personal computers that were affordable, but in general, it was actually the concept of creating a company devoted solely to the development and sale of software. Microsoft was one of the pioneers that showed the way that creating something intangible as software was good business.
Our market is starting to appreciate that. In the 90s, you would buy a computer, and it would come with all the applications for free. We are now seeing not only businesses starting to pay for software and services, but also buying locally. Yet there is still a significant number of companies that buys their software when the owner goes abroad. Generally, I know a good number of companies where the owner goes to the United States, goes to a computer store, buys applications like accounting software, and gives it back to their staff to make it work. In general, there are two things that makes it somewhat hard to make it work – the most difficult thing about business application is actually the expertise to start it up and to go for somebody with technical support if there are any problems. The other thing is that accounting software from the United States are generally not very suited to local conditions. First and foremost is that the United States do not have Value Added Tax, and therefore its software generally cannot pass our internal revenue seal of approval for its usage. Another is that most American company are accustomed to deal only in dollars, and thus, most small company accounting software for US companies generally cannot handle multi-currency issues, something exporters and importers here sorely need.
At any rate, the technology industry in Cebu and outlying areas is growing healthily, and more and more players are entering everyday. We may think that all these business process outsourcing, and offshore programming is affecting the United States employment, and yet the latest studies show that employment in the US tech sector seems to be healthy, contrary to popular fears that all these outsourcing is resulting in American programmers losing their jobs to overseas.
The American Electronics Association, the US largest technology trade association, in its reports noted that the US tech industry employed 5.8 million people in 2006, which is up by 2.6 percent from 2005. The industry in fact added 147,000 jobs in 2006, which on the same token added 87,400 jobs over 2005.
Software employed more than 1.5 million people, and there were 88,500 new jobs created last year. In fact, according to the study, the unemployment rate for computer scientists for 2006 was 2.5 percent, while for electrical engineers, it was 1.9 percent. That is almost called full employment. IN fact, April was supposed to be the first day that the United Sates would start processing H1B petitions which allows the United States to process and hire 65,000 workers from abroad in special skilled areas. As expected, the 65,000 quota was made full in just one day of processing, showing the severe need to American companies to hire more skilled people.
The technology sector is alive, vibrant and growing!
Wilson Ng
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