FROM its 12th ranking in 2019, Cebu City fell to the 15th spot in the 2020 Tholons Services Globalization Index (TSGI).
Released in July, this year’s Tholons report placed higher emphasis on digital innovation attributes and assessment of how the various cities and countries have managed and are winning over the global crisis during the pandemic.
According to Tholons managing director Avinash Vashistha, these new criteria resulted in five new high-cost cities from the west surpassing Cebu City’s ranking. These five new western cities ahead of Cebu City are San Francisco, London, New York, Sydney and Vancouver.
“This year we changed the assessment and put a significant emphasis on digital. So there is a greater emphasis on artificial intelligence (AI), intelligent automation and innovation. ... We know you were ranked 12 and now 15. However, seven of the cities (Delhi, Hyderabad, Krakow, Poland, Chennai, Montevideo, Santiago) that were in the Top 15 have now dropped below 15. Cebu has only dropped by three, which means the city has a net improvement based on the last year’s list. This is going to become even tougher as more and more western cities who are leading in innovation even though they are more expensive will continue to be a larger part of the cloud-based services industry,” said Vashistha, in his email to Cebu IT-BPM (information technology-business process management) Organization (Cib.O) former managing director Wilfredo Sa-a, Jr.
Manila also suffered a setback this year from ranking second in last year’s list to fourth this year. India’s Bangalore though has maintained its rank as the top super city in the Tholons list.
Moroever, the Philippines as country sustained its fifth spot in the Top 50 Digital Nations ranking, after the UK (4th), Brazil (3rd), the US (2nd) and India (1st).
The TSGI, which is published annually, ranks the Top 100 “Super Cities” and Top 50 “Digital Nations.” The index evaluates ranks and provides location strategies to multinational corporations, countries, governments, multi-lateral agencies, analysts and investors.
Digital, AI critical
According to Tholons, “Digital is a critical element in transforming industries globally.”
“Technology, business process management companies and multinational corporations need to align with the stark reality of digital innovation and transformation. Most of the services will get commoditized for the biggest leaders in services globalization like the US, the UK, Canada, Europe, India, the Philippines, East Europe and Latin America,” Tholons said.
As global economies face the “new normal” business landcape brought about by Covid-19, Tholons also made emphasis on AI investments.
“The year 2020 with the global pandemic is unprecedented for most of us. Businesses are struggling to survive, thinking of recovery and making plans to sustain and grow. ... Now is the time, when the leaders need to take care of the present, focus on recovery and prepare for resiliency in the future. ... Businesses are looking to automate using AI-based solutions and digital workers, rather than only human workers. Bringing in AI-driven innovative solutions is a must,” Tholons said.
“Countries like India and Philippines have been the hardest hit because their value proposition was heavily based on low-cost talent, working out of offices offshore. Every consumer around the world has been witness to the failure of the current services model. Most of us have not been able to call and receive service from airlines, banks and other citizen services. Going forward the old model of people-based outsourcing will decline and decay. This needs to be significantly augmented by AI and intelligent automation-driven solutions,” Tholons stressed.
Sought for comment, Sa-a said: “It is getting competitive as usual, and Cebu is indeed lucky to be in the 15th spot despite the five big cities coming into the Top 10 list. But if we don’t continue to level up for next year, we might be out of the Top 20 list. We should embrace more digitalization like the rest of the world and our talents should continue to level up.”
Sa-a said Cebu continues to be a bright spot for a second wave of outsourcing boom in the country.
“If we look back at the 2008 global financial crisis, we were the only industry that grew by double digits because there was a need for cost savings, and outsourcing is always a proven solution to have more savings. So I’m hoping with the need for more savings, more and more global businesses will be looking for these outsourcing opportunities,” he said during the Cebu Business Month Coffee Table Discussion on Thursday, Sept. 3.
But Cebu needs to maintain its appeal to international investors to make this happen.
“As long as we have the right kind of skill sets, language and cost advantages, plus we have very trainable people, I can say we are ready for these outsourcing opportunities and I hope that these will come,” he noted.
Sa-a said CIB.O had planned for another round of upgrading the skills of senior high school teachers but this has been derailed by Covid-19. This teachers’ training will allow educators to teach Java programming to their students.
Moreover, Sa-a said Cebu City’s Department of Education is open for possible skills training next summer and that schools now are eager to learn higher tech skills. Talent upgrading among public elementary school students is also being pushed for students to learn robotics.
“Our local and national government should pick up the cue from the impact of Covid-19 that going fully digital is one of the best ways to move forward and be competitive. Going digital will make us more efficient and transparent,” he said. / WITH JOB