Country brand matters to BPO investors

Michael Alan Hamlin

Posted on March 11, 2010

Executives in the business process outsourcing industry (BPO) are naturally curious about how presidential candidates in the looming May national election view their industry, and what they will do to sustain its growth if elected. But the executives understand why the candidates seldom make public statements about the industry, or the Philippines’ appeal to investors in general. To the voters who will elect the president-mostly desperately poor Filipinos mired in the D and E socio-economic classes-a job in the BPO industry is way too aspirational to matter to them.

Whether elections are conducted efficiently and an orderly transfer of power takes place are the more immediate concerns of executives in the Philippines’ most efficient and productive job-generating industry. According to preliminary results of a just-concluded industry survey conducted by TeamAsia for Outsource2Philippines (O2P) and the Business Processing Association of the Philippines (BPA/P), BPO executives overwhelmingly believe that credible elections are an important factor shaping investors’ perception of the country. (Disclosure: I work for TeamAsia and I am a director of O2P. BPA/P is a client.)

In response to the statement, “In terms of investor and client perception of the Philippines, it is important that the national election is conducted in a peaceful, credible, and transparent manner,” 90% of participating executives responded “very significantly” (49%), “significantly” (31%), or “somewhat significantly” (13%). Only six percent responded “somewhat” (4%) or “not at all” (2%). Only two percent of responding executives don’t think the conduct of credible elections will impact investor and client perception of the Philippines.

The full results of the survey will be presented in a CEO Breakfast Briefing on April 28, about three weeks before the election (Details will be available soon at www.teamasia.com.). The focus of the briefing will be the leadership transition and prospects for the BPO industry in the Philippines. Presidential candidates are not being invited, but their staffs who work on investor issues-hopefully they all have such people-will be encouraged to attend. If they do, they’ll gain important insights into the thinking of BPO executives, and the challenges the industry faces.

As the responses above suggest, perception of the Philippines’ country brand is one of those challenges, especially as new competitors enter the industry in a significant way. Responses to two other survey questions drive home this point. In response to the statement, “A failure of elections will have a negative effect on investor and client perception of the Philippines,” 87% responded “very significantly” (41%), “significantly” (32%), or “somewhat significantly” (14%). Another nine percent responded, “somewhat.” Only three percent of executives responded “not at all.”

Because many issues continue to be raised regarding the automated voting process and equipment-the lack of an audit trail, possible intrusion by hackers, reliability of data transmission, to name a few-the question of whether a “technical” failure of elections will occur looms large. Given that larger developing economies routinely conduct transparent and credible elections, a failure of elections in the Philippines would raise concerns on many levels, including political instability leading to a breakdown in already weak public institutions.

If elections take place as planned and a smooth transition of power follows, the perception of the Philippines’ brand is likely to be enhanced, according to respondents to the survey. In response to the statement, “A smooth transition of power will have a positive effect on investor and client perception of the Philippines,” 93% of respondents answered “very significantly” (50%), “significantly” (35%), or “somewhat significantly” (8%). Six percent answered “somewhat.” Only one percent answered “not at all.”

Of course, there’s still the question of whether candidates care what investors think post-election. While a candidate who is genuinely concerned with raising the vast majority of the Philippines’ population out of poverty, generating jobs should be an obvious priority. So is educating students in a way that will prepare them for those jobs. If that can be accomplished, opportunity won’t be perceived as beyond the reach of poor Filipinos.

Too often, unfortunately, regressive government policies serve to protect the prosperous to the detriment of the desperately poor. The extreme example is the notorious Ampatuan clan-whose members are charged with conspiring and carrying out the murder of 57 political opponents, bystanders, and media in pre-election violence last November-which has ensured that Maguindanao remains the second poorest province in the country while allegedly diverting government funds for personal benefit.

Investor perception matters. Hopefully, whoever wins the election will understand why.

(Michael Alan Hamlin is the managing director of TeamAsia and a Manila-based author. His latest book is High Visibility: Transforming Your Personal and Professional Brand. Write him at mahamlin@teamasia.com and follow him on Twitter, Facebook and LinkedIn.).

Copyright © 2010 Michael Alan Hamlin. All Rights Reserved.

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