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Skills Development in IT-BPM Sector: On the need for calculus

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(Part 5)

With the advent of more advanced technologies such as Artificial Intelligence, the Internet-of-Things (IoT), robotics, and Big Data, it is imperative that more and more of the products of our basic education schools (K to 12) should attain global competitive levels in their reading, mathematics and science (STEM) capabilities. This would require a significant improvement in the amount the public sector invests in public education. The target should be for the resources invested by the Government in public education to match the average spent by our ASEAN peers, about 6% of GDP. There should be a special effort to improve the K to 12 curricula to include the teaching of differential and integral calculus at the senior high school level. The new technologies would require mathematical knowledge at those higher levels. The earlier the cream of the crop among our youth are exposed to higher math subjects, the more they will be attracted to the college or university programs that will prepare them for the advanced technologies.

At the college level, there should be a special effort to increase enrollment in the engineering and sciences specializations because that would automatically guarantee that these students would be taking courses in those higher branches of mathematics. There should also be a special effort to require university students majoring in business, accounting, and management to take at least two semesters combining analytic geometry and calculus. Today, anyone who purports to be a businessman or manager should be considered ill-equipped if he or she does not have at least an elementary understanding of the calculus. Gone are the days when the only quantitative skill that accountants needed was how to add and subtract, multiply and divide. This was actually my case when I majored in Accounting to be able to take the CPA exam. I didn’t have a clue what calculus was all about. That vacuum in my math education gave me a serious handicap when I started my doctoral studies at Harvard. I had to take a crash course in analytic geometry and calculus. As any student in a graduate program in economics knows, he has to learn more higher mathematics than some engineering students, some of whom need not take courses on differential equations, linear programming, and matrix algebra.

Today, those studying to be accountants, together with their other colleagues in business administration or management courses, must have a minimum knowledge of the uses of linear programming and operation re-search, for example. That is the only way they can more easily understand the implications of artificial intelligence, algorithms, blockchains, input-out analysis and other terms becoming commonplace in business parlance. In this regard, I always looked up to those who studied Management Engineering at the Ateneo during the last three decades of the last century. They were actually majoring neither in management nor engineering but in high-level math. The products of this course are some of the CEOs and top managers of the large corporations today. They, like former Secretary of Trade and Industry Greg Domingo, are now the gurus of Big Data and Artificial Intelligence.

Having said all this, however, let me once again remind everyone that the vast majority of those who will be working in the information technology and business process management (IT-BPM) sector in the next 10 years or so need not pursue a degree program in college.

As the Roadmap 2022 concluded rightly, the IT-BPM sector is unique in the sense that for entry-level positions, educational background is not a key factor in the selection process. In this context, the IT-BPM sector offers many employment opportunities to those interested in working in the sector and who can meet entry requirements. For example, contact center positions are open to anyone with basic skills; the game development and animation subsector is open to those with an interest (not necessarily possessing a digital arts degree). I distinctly remember the owner of an animation enterprise that supplies some Japanese companies with the anime drawings they needed proudly proclaiming in a workshop on creative industries that none of his 100 workers have a college degree.

In formulating skills development programs for the IT-BPM sector for the immediate future, i.e., the next five years, we must keep in mind that of the 2.5 million workers projected to be employed by 2028, the vast majority do not need college degrees. Most of them will be taken from the existing 1.7 million workers who will be upskilled, reskilled, and retooled by the IT-BPO enterprises through in-house training programs or through partnerships with academic institutions (both universities and Technical Education and Skills Development Authority (TESDA)-type technical schools). For the additional 800,000, they can be recruited from some of the millions of workers who are either underemployed or unemployed (there are more than 10 million of them in the existing labor force) and provided with short courses that reskill them in the old technologies that have been around for the last two decades.

Key services that have been offered for some time and will not be completely made obsolete by the new technologies are:

 Contact center and Business Process Outsourcing (BPO). In this sub-sector, the mature areas and are the easiest to replace with AI and robots are customer care and helpdesk. Still growing are Engineering Service Out-sourcing or ESO, Data Analytics, Performance Management, and Legal Process Outsourcing;
 IT Services. The mature areas are application development and infrastructure support. The growth areas are System Integration, Automation Enablement, IoT Enablement, Languages, and Application Development Management (ADM);
Health Information Management Services: mature services are the payer services while the growth ones are preventive health, remote healthcare management, and provider services;
Animation and Game Development services: the mature areas are 2D Animation and Game Development while still growing are 3D Animation, augmented and virtual reality or AR/VR, and Gamification;
Global In-House Centers: the mature services are Finance and Accounting while the growth services are industry-specific services for telecom, healthcare, insurance, and pharmaceutical.

For those who are already in the workforce or about to finish their studies in a wide range of educational or training programs, the opportunities are still in the traditional sectors. For the rest of this decade, the country will continue to be a key offshore player for customer care services and support, competing mainly with India. Application development and maintenance (ADM) will continue to be provided by both large service providers, as well as mid-size to small companies. There will continue to exist opportunities for mid-tier service providers to obtain smaller and less-complex contracts from both foreign and local small- to medium-size enterprises.

As Finance and Accounting (F&A) faces a shrinking market, Human Resources (HR) services have begun to expand on the back of an increasing focus from large service providers. There is also a steady growth in the maturity and value of knowledge process outsourcing or KPO, ESO, and legal and analytics services being offered.

As regards healthcare, the Philippines has been focusing more on higher value services on both the provider and payer side. The payer market is much larger in terms of revenue because of the former being large, multi-year contracts serviced by large BPO customers. As regards animation and game development, the Philippines needs to leverage new platforms such as the mobile and web to grow at a faster rate compared to the other service sectors of the market.

Bernardo M. Villegas has a Ph.D. in Economics from Harvard, is professor emeritus at the University of Asia and the Pacific, and a visiting professor at the IESE Business School in Barcelona, Spain. He was a member of the 1986 Constitutional Commission.

bernardo.villegas@uap.asia

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