How Can Governments Harness the Power of IT

The pasture’s greener on the other side. Sure feels that way often with ICT.

“In a keynote address at the ministerial panel on “Digital Prosperity”, Dr Robert Atkinson said that Information and Communications Technology (ICT) is supercharged capital and unlike the technological revolutions of the past, the ICT revolution’s engine will not run out of gas,” Zafar Anjum shares in a Computerworld Malaysia article.

Why don’t I read anything like that pertaining to the Philippine ICT environment?

From Digital prosperity: Potential and challenges

“Putting a tax on IT is not the thing to do; it is going backwards,” Dr. Atkinson said, speaking on what nations should do to benefit from IT.
Not imposing tariffs on many ICT products, actively encouraging digital innovation and transformation in all the main sectors (health, retail and government) are some of the basic measures countries could adopt to promote IT.
Dr. Atkinson’s mantra for APEC nations’ success employing ICT included actively encouraging universal digital literacy and universal broadband and digital technology adoption. He referred to the effective initiatives of South Korea. The country, for example, put in place free computer classes and arranged for free computers for meritorious students.
Tax, regulation and weaker protection of intellectual properties would have a harmful effect on the ICT-enabled growth of a nation, he added.

It’s hard enough running a startup and recruiting good talent, but also having to deal with taxes? Philippine startups usually have to take on outside client work just to survive since apps often don’t generate income right away, especially if you’re targeting Filipinos. If not generate revenue through services, then developers live in savings, mooch off their relatives, or sustain from their ‘other paying job’. This is probably the case everywhere else in the world but isn’t it just always more painful when it’s happening to you?

Barangay Micro Business Enterprise Law

I’ve asked our consultant/accountant to apply for Barangay Micro Business Enterprise certification (still waiting). Commonly referred to as BMBE, this law grants a variety of incentives. You can qualify if this is your main source of livelihood and majority of your employees are based in the same city.

• exempt from income tax
• exempt from minimum wage law
• access to special window for financing needs of BMBE - I don’t know yet how exactly this works
• technology transfer, production and management training, marketing assistance programs for BMBE beneficiaries

Government Grants

As I was trying to work out the “Funding” part of our business plan, I couldn’t find any government grants fit for freelance web developers/web startups/IT/SaaS. It could possibly make life easier. I’ve tried the Commission on Information and Communications Technology, Department of Trade and Industry, Department of Science and Technology, and others. Oh, I did find one from DOST, will tell you more in a later post.

IT Venture Capital Fund of 2007

House Bill 1664 is pending with the Committee on ICT as of August 13, 2007. Spearheaded by Representative Roilo Golez of the 2nd District of Paranaque, the bill says that the government should allocate at least P1 billion for the Philippine venture capital fund as seed capital to local technology ventures. Erwin Oliva shares more about the law entitled An Act to Accelerate the Development of Information Technology Startup Companies by Providing an IT Venture Capital Fund and for Other Purposes.

What are the best practices of other governments that the Philippines could learn from?