Interview: Jaime Augusto Zobel de Ayala
What is hindering sustainability among businesses?
JAIME AUGUSTO ZOBEL DE AYALA: The first challenge is operational: companies have to contend with affordability and access issues in low-income markets. Lower disposable income limits both the amount and the variety of products that can be purchased. The second challenge is cultural: few corporate decision-makers come from the lower-income segment of the corporate ladder, so they are removed from the realities of these communities. Businesses must develop an understanding of what their target markets truly need. The unpredictability of regulation and its poor enforcement also increases the risks of doing inclusive business. Some irresponsible business practices may even persist because of this.
I believe many Filipino firms operate in line with sustainability principles, such as ensuring employees are accorded dignity and respect in the workplace, or continuously improving and creating products for the benefit of consumers. Perhaps what is missing is an understanding of the complete concept of sustainability and how it can contribute to traditional and non-traditional business outcomes. Many in the Philippines still view sustainable activities through a philanthropic or corporate social responsibility lens. Companies should recognise it is in their interest to contribute to the progressive development of the markets they serve.
How can conglomerates encourage disruptive startups to move towards sustainability?
ZOBEL DE AYALA: Engaging with start-ups is a way for conglomerates to tap into new sources of innovation, creativity and expertise. This may be particularly useful for established businesses that have a problem with adapting to new demands. To complement the innovation of start-ups, large organisations can offer extensive resources and networks, capital and deep industry knowledge. This kind of collaboration can create fresh, at-scale solutions, while helping conglomerates diversify their thinking and approach to innovation.
How will technology play a role in achieving the UN’s Sustainable Development Goals (SDGs)?
ZOBEL DE AYALA: Technology can be harnessed to find solutions to sustainable development challenges. With the cost of solar panel technology falling, it may soon be a viable alternative for the electrification of isolated communities. More readily available access to the internet and communications technology can help empower female entrepreneurs, and boost their economic freedom. Big data and automation can support the aggregation and analysis of information across a wide variety of sectors and geographies, and identify problems. Meanwhile, mobile technology allows the geographical hurdles associated with the Philippines’ archipelagic makeup to be overcome.
Where is infrastructure investment most needed?
ZOBEL DE AYALA: Infrastructure investments are critical in a modern economy, more so in an emerging market. Not only does infrastructure make the country a more competitive destination for investment, it also acts as a valuable conduit for ensuring that innovative ideas and actions have free flow of movement throughout the country. The Philippines has a relatively high level of urbanisation. This is a positive trend, as urbanisation is associated with higher levels of productivity, efficiency, creativity and innovation. At the same time, its benefits can only be fully maximised when transport and telecommunications infrastructure help to facilitate mobility and connectivity.
Private sector players are doing their part, and the government has implemented a plan to increase infrastructure spending to 7% of GDP by 2020. Moreover, the government is building infrastructure for a digital nation through the National Broadband Plan, which has the goal of ensuring universal, affordable and fast internet access nationwide. I also believe that the government and private sector should stimulate research and development across a wide variety of sectors.
Read More from OBG
