ICT industry leaders see potential in Davao City’s startup scene

THE Philippines is a country of high potential.

Throughout the years, the country continues to thrive in its startup ecosystem.

In a report from PwC Philippines, the country continues to break boundaries for startups, based on the 2020 Philippine Startup Survey.

In 2020, the ecosystem is now home to more than 400 startups, 50 angel investors, 40 venture capitalists, 35 incubators and accelerators, and 120 co-working spaces. It’s become a vibrant community of innovative minds, bolstered by investors and entrepreneurs looking to take the Philippine startup scene to new heights.

Philippine Startup Development Program (PSDP)

The 2019 signing of the implementing rules and regulations for the “Innovative Startup Act” or Republic Act (RA) 11337 as well as the Revised Corporation Code allowing the incorporation of one-person corporations show the government’s support in promoting entrepreneurship.

RA 11337 also paved the way for the Philippine Startup Development Program (PSDP).

PSDP is composed of programs, benefits, and incentives for startups and startup enablers promulgated through the respective mandates of national government agencies, and through additional mandates.

The Program aims to achieve support the research and development of startups and startup enablers in the Philippines; support and promote access to startup development programs, such as but not limited to, capacity building, exchange programs, and expert training courses, offered locally and internationally for startups, startup enablers, and the implementers of the Program; and support and promote the participation of startups in international competitions and conferences integral to the promotion of the Philippine startup ecosystem.

Also, the Program aims to develop and amend policies and regulations to address or remove undue restrictions in the implementation of the Program, and in the development, establishment, and growth of startups and startup enablers to promote ease of doing business.

This paved the way for the creation of the Startup PH Portal, a platform developed by the Department of Information and Communications Technology (DICT), in coordination with the Department of Trade and Industry (DTI) and the Department of Science and Technology (DOST), which serves as a central repository of information on statistics, events, programs, and benefits for startups and startup enablers. The platform also aims to bring together key government agencies, startups, and startup enablers fostering collaboration and leading to the promotion and development of the startup ecosystem in the Philippines.

The ecosystem of Davao City startups

As one of the progressive cities in the country, Davao City is also considered as one of the hotspots of startups.

To synergize the programs startup enablers to achieve a stronger, inclusive, and conducive startup ecosystem, not only in Davao City, but for the entire Davao Region, the Innovation and Development Accelerators Consortium for Startups (IDEAS) in the Davao Region was established.

According to its website, IDEAS’ mission is to lead the region’s startup community toward upgrading inclusive, innovative, scalable, and socially impactful business ventures. Their vision is also to transform the local region into a leading innovation hub by producing successful business ventures through collaboration, networking, and promotion of value-generating products and services.

It intends to align the programs of legally mandated implementing agencies of the Philippine Innovative Startup Act, namely, DOST, DTI, DICT, at the regional level, to extend more support to startups.

They also aim to aid startups with the potential for exponential growth to access government funding such as Startup Grant Program, Business Innovation through Science and Technology (BIST), Women-Helping-Women: Innovating Social Enterprises (WHWise), and the likes. It endeavors to also support startups to acquire investments from private entities to increase job opportunities and economic development in the region.

Challenges

DTI-Davao Regional Director Maria Belenda Q. Ambi, in a previous report, noted that access to finance, talents, national and global market, connectivity and infrastructure, and connectedness among ICT startups are key challenges that need to be addressed for them to level up.

However, Ambi said, despite those challenges, Davao City has the following strengths that increased the opportunities for the said sector, to wit: good communication and interpersonal skills; presence of quality universities producing ICT talents; availability of workforce; ease of doing business; and a decent peace and order situation.

The city recently ranked the fifth city nationwide and 21st in Southeast Asia for startups, based on the Global Startup Ecosystem Index of StartupBlink for the year 2022.

The city’s national ranking dropped by one spot trailing behind Naga City, which ranked fourth. The regional ranking of Davao City in Southeast Asia also fell by two spots from the Top 19 in the 2021 data.

Despite this, Candice Lleses, the regional startup ecosystem lead of Innovation and Development Accelerators Consortium for Startups in Davao Region (Ideas-Davao), said Davao City’s current startup ecosystem has been progressing compared to the previous years when it was not even “on the map.”

“I’d say in the past three to five years, we’ve grown to be almost at par with many metropolitan cities in the Philippines,” Lleses said during the Wednesdays at Habi at Kape media forum on July 20, 2022.

She said the progress of the startup scene in Davao City is mainly motivated by the cumulative effort of the academe to create different startup projects and support startup entrepreneurs.

Lleses cited startup incubators Upgrade InnoLab from the University of the Philippines in Mindanao (UP-Min), AGILabs from the University of Southeastern Philippines, and UMasenso Hub from the University of Mindanao that support and provide opportunities for startups.

The support from the government through various agencies also paved the way.

“In the past few years, there have been a lot more initiatives such as startup grant funds which give more established startups the funding they need for research and development and other initiatives,” Lleses said

According to StartupBlink, the top industries in Davao City are software and data with two startups, marketing and sales, and fintech with one startup each but Lleses said UP-Min is currently incubating five startups in social enterprise and tech-based industries.

Ideas-Davao, in partnership with DTI, is working on a Davao startup ecosystem mapping to connect different startup entrepreneurs, incubators, accelerators, government agencies, and other entities to visualize the growing startup scene in the city.

Davao-Israel Innovation Night

The Embassy of Israel, in partnership with UP-Min and Ideas Davao, hosted Davao-Israel Innovation Night in line with the first-ever Davao Start-Up Week on August 11.

Israel is known as a start-up nation, which houses over 9,000 startups.

With this, the Israeli government wants to expand its partnership in Davao City through startup innovations.

“We are here to create bridges between Israel and the Philippines. These bridges can be in our government, doing businesses, organization, and between people. Also, one important thing is the bridges of innovation,” Nir Balzam, Deputy Chief of Mission of the Embassy of Israel in Manila, said in an interview.

Balzam said Davao City is one of the premier cities to have innovation promoted. He added the startup scene in the city, he said, is promising considering the growing number of startup innovators.

In addition, he said they also saw a growing potential of other places in the country as another potential startup hub.

For Itamar Gero, Vice President for External Affairs of the Israel Chamber of Commerce, the partnership between two areas is also a way for the parties to share their best practices for innovation, particularly in the field of agriculture and food production.

Israel being dubbed as a “startup nation,” Gero said they hope to share their country’s success story and create partnerships with the innovation community in the country.

Miguel Carlo S. Guillermo, Project Leader of the IDEAS Davao, said innovation night is one of the events wherein premier startups are highlighted in the region.

“The startup ecosystem now has grown over the years, especially with some of the startups in Davao Region now being assisted by the technology business incubators,” he said.

He said the start-up scene in Davao City and neighboring regions in Mindanao has been thriving discreetly.

However, he said due to a lack of support over the past years, several startups struggled to succeed, while some ideas for impactful ventures have materialized without public knowledge.

Guillermo said the city government and other concerned agencies had been addressing the gap by building infrastructures and creating an environment for budding enterprises, in a bid to put the city on the “startup map in the Philippines and the world.”

He said that creating a startup ecosystem is a great way of addressing the existing social problems.

“This is the drive that we need from our Filipino people. We believe we can create this ecosystem [where] all of our society’s pressing problems can be addressed,” Guillermo said.

A total of 10 Davao-based start-ups joined the event and were given an opportunity to pitch their ideas to local investors and government officials.

Balzam said, through the event, they want to connect more with the industry, building more engagement to have Filipino start-ups collaborate with Israeli start-ups. RGL

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