MANILA, Philippines – Metro Manila can prosper as a startup city if not for the excessive bureaucratic processes for setting up a new business.
Jay Fajardo, executive director of QBO Innovation, said on Rappler’s Be The Good that aired on September 13, that hurdles brought about by the government bureaucracy dissuade founders from registering their businesses.
Startups are growing businesses and ventures with the potential to expand from a small customer base to large-scale users, reaching up to a hundred thousand, in a small amount of time. This ability to rapidly scale up is enabled by technology, particularly software platforms, and applications that can reach broader audiences.
Fajardo brings up the process of applying for business permits in cities or municipalities, which in the Philippines tend to take inordinately long. He differentiates this from Singapore, where it only takes one day to incorporate.
“This is also why Singapore’s innovation quotient is very high. There are actually so many people who are operating here but are registered there,” said Fajardo during the interview.
He also points out rules like the requirement for every business to have a fire extinguisher, and the prohibition against multiple companies using the same address, a restriction that makes co-working spaces tricky to set up.
“Those things are not compatible with the nature of the dynamics of fast-moving startups,” he said.
Fajardo believes that these hindrances could be resolved through a partnership with the local government units (LGU), leading to easier development of startups and encouraging more emerging entrepreneurs to start their businesses. This is likewise the core objective of the new government and private sector initiative: Strategic and Collaborative Alliance for Leveraging Ecosystems of Startups – National Capital Region (SCALE NCR).
Mapping up opportunities for startups in Metro Manila
SCALE is a program initiated by the Department of Science and Technology to enhance the startup ecosystem by collaborating with Technology Business Incubators (TBIs) at universities in Metro Manila. Together, these various institutes aim to equip startup founders with the knowledge and connections to make their businesses succeed. The group also aims to partner with Metro Manila LGUs to simplify business registration processes and link startups with the LGU’s resources and programs meant to foster local businesses. The goal is to create an environment that fosters the success and growth of startups.
Among the ongoing programs of this initiative is the mapping out of 16 cities and one town in Metro Manila in terms of opportunities and support for startups. This, moreover, aims to develop a five-year “Startup Development Roadmap” for the capital region.
This roadmap, set to be released in 2025, involves creating content, mentoring, engaging with LGUs, and continuously enhancing the program.
Fajardo said that they also submit recommendations to LGUs’ regarding government requirements, incentives, and talent supply to address the problems impacting startups.
“We create a report, and then we actually give it to the LGU, so they themselves have the study that they can use, so they can fill the gaps,” he said.
SCALE NCR also makes it their goal to expedite the application for business permits. By the end of the five-year roadmap, they seek to cut down the processing time to a week, or three days.
“You know what, I think it’s acceptable at this point to maybe have it even in a week, and then you’re done, but three days would be great.”
What lies ahead for Metro Manila starups
The fast-paced economy in Metro Manila can only be good for startups, said Fajardo.
Some strengths of the capital region include its young, digitally-savvy population who tend to spend more compared to consumers in the provinces.
“And [Metro Manila is] also the landing point for foreign investors. So, just like Singapore is the entry point for [venture capitalists] in Southeast Asia, we’re the entry point here in the Philippines,” he said.
Through the five-year roadmap, SCALE aims to register and incubate more startups while improving the city’s ranking among emerging startup cities.
“If the growth of startups in a certain LGU is significant, then [the LGU is] doing [its] job,” he said.
Other cities show great promise for startups, said Fajardo, naming Cebu City.
“Cebu has always been very exciting and dynamic with regards to startup ecosystems, and that even started way back in 2013,” he said.
He spotlights “Geeks on a Beach,” a regional startup conference organized by a group of entrepreneurs from Cebu that provides a platform for startup founders from across the country to congregate. This conference began in Cebu and has since been held in various locations, including Bohol.
For Fajardo, startup founders should be assured in launching their business ventures given the favorable conditions in the country, like the large and digitally engaged population.
“My advice is really to recognize that and start now. Don’t overthink your product. Try to let it hit the market as fast as possible to validate it and reach product-market fit. That’s the formula to increasing success for a startup.” – Vic Arroyo/Rappler.com
Vic Arroyo is a Rappler volunteer from the University of the Philippines Visayas. He is a fourth-year student taking a BA in Communication and Media Studies.
Urban prosperity for all is part of what is needed to make cities more liveable. Rappler has a space dedicated to stories about improving quality of life in Philippine cities. Check out the Make Manila Liveable page here.