ABOUT 10 years ago, I helped a young woman from the barrio relocate from a tech job in the US Midwest to a tech job at Silicon Valley, one of the technology giants with campuses in that sprawl of Northern California. She knew I hated traveling and leaving my farm work to others, but her lure was hard to ignore. "Old man, here is your chance to witness the post-First World employment order first-hand. You can't eternally write about post-First World jobs from a vacuum."
That was 10 years or so ago, before the self-immolation of Elon Musk, the jobs bloodbath at the Valley, the drop in the market caps of the tech giants and ChatGPT.
Indeed, with her "blue pass," everything from food to laundry to bus rides was free 24/7. In the open space where she worked, the pantry had coffee blends from Sumatra to Peru. The freezer was fully stocked with Haagen Dazs,
Ben and Jerry and a dozen other ice cream brands. A huge pile of food containers was in a corner as take-outs were encouraged. During the relocation period, she and her French American husband stayed at a hotel-like building where newly hired workers can stay for a full month (rent-free) while scouting for permanent housing. Immigrants like her who came on H1-B visas were even encouraged to bring their visiting next of kin into the campus for tours — and partake of the freebies.
Still, some things I witnessed in the general environment of Silicon Valley did not sit well with my deeply ingrained sense of country. First and foremost, the bumper stickers of the pricey European cars (the dominance of Teslas was to come later in these campuses ) that tooled in and out of the Valley The bumper stickers carried the names of famous engineering and tech schools in the US and... IIT. IIT Madras, IIT Bangalore, IIT Delhi, IIT Bombay, IIT ad infinitum.
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No bumper stickers saying " UP" or "Ateneo" or "De La Salle" or "UST." Not a single one. During the few days that I was there, the foreign universities represented in the bumper stickers were the many campuses of the Indian Institute of Technology spread across the vastness of India. The creation of an excellent technology and engineering-oriented school for young Indians meant to supply India and the rest of the world with tech and engineering talent was the idea of an unapologetic socialist, Jawaharlal Nehru, and that led to the creation of IIT.
The immense pool of Indian tech talents turned out by an excellent university system is the main driving force behind these:
– At least 15 corporations in the S&P 500 are led by Indian-born CEOs. India-born CFOs, CTOs and CIOs in the same corporate giants are dime a dozen.
– The pool of talents is partly the reason why India toppled Britain from being the 5th largest economy in the world this year.
The former colony bumping off the colonizer, and more, the current prime minister is the son of Indian immigrants.
– In the reconfiguration of the global supply chain that involves companies moving their assembly/manufacturing sites out of China into other locales because of Covid concerns and geopolitical reasons, one of the top five countries of choice for those relocating is India. The movement out of China into India would mean lots and lots of fresh investments via new factory/assembly sites and the complementary job creation. This is on top of India's sustained run as the destination of substantial foreign direct investments.
– Cornering a substantial chunk of FDI year after year.
Which has been the elusive dream of a succession of Philippine governments, that reached fever peak during the Duterte administration. Which is also the highest dream of the administration of President Marcos Jr.
The lesson from India's limitless pool of highly-educated, highly skilled nomads is this. We are taking the wrong approaches on investment attraction and generation, the Philippines' policy priority.
Our core strategies center on the following. First, we announce to all and sundry that we are open for business. We do plenty of shout-outs to the world at large centered on the thesis that this is a country that warmly welcomes investments.
Second, we do it via legislation and executive fiats. During the Duterte administration, the House of Representatives even passed a draft law that voids all the equity provisions in the Constitution to ensure 100 percent foreign ownership even in patrimonial economic sectors, clearly an illegal and irresponsible move. Some of the core institutions of the polity even assault the Constitution just to proclaim the openness of the country to foreign investments. There is an ongoing Cha-cha hearing by a Congress that has never learned.
We also passed a law on sweeping corporate tax cuts amid diminishing revenue just to attract fresh investments.
In a few years, the corporate tax rate will hit a bottom 20 percent.
The problem is all these legislative and executive efforts never work. Investors will always ask this question: Where are your fundamentals?
The fundamentals that investors require before putting in their investment money have been spelled out clearly by Treasury Secretary Janet Yellen in talks before finance ministers of the G7 and OECD economies. Legislating investment attraction was not one of them. In fact, Secretary Yellen has railed against the use of massive corporate tax cuts as part of a country's investment attraction strategies. She calls corporate tax cuts via legislation as a "race to the bottom."
According to Yellen, these are the fundamentals sought by investors:
First, good governance; second, a skilled workforce; and third, a culture of innovation.
By fulfilling the second and third requirements through a massive pool of skilled workers trained at the IIT and elsewhere, India has shown the way in these two critical areas. Exporting tech talents that have scaled CEO, CFO, CIO and CTO level. Alphabet and Microsoft are led by Indian-born talent, so was Twitter before Elon Musk's acquisition. Then building cutting-edge tech centers within India itself that has been attracting foreign investments. All the fruits of a good educational system and training world-class tech and engineering talen.
The dear lesson here is this. We can't generate FDI on a massive scale by legislation that says we are open for business.
Or legislation that offers corporate tax cuts. Or, saying over and over again that the Philippines is an investment-friendly country and there is an entire body of laws and rules that say so.
The first step, if we are really serious about attracting investors is this: Excellerate the educational system dramatically.
This will yield a substantial pool of skilled and tech/ engineering-savvy workers. This will eventually lead to a deeply ingrained culture of innovation.
Fulfill these and we won't even need a show horse called Maharlika Investment Fund. We won't even need to network at Davos.
I will paraphrase something from the movie " Field of Dreams." Build an impressive educational system and develop a culture of innovation and the investors will come.
Jeffrey D. Haskell, J.D., L.L.M.
