Great Speeches: ENTREPRENEURSHIP: KEY TO POVERTY ALLEVIATION

From the Author: Nowadays, speeches are commonly accompanied by powerpoint presentations. This speech will provide a good format for such speech.

(SLIDE 1)

Ladies and gentlemen, good afternoon!

Let me begin this session by congratulating the organizers – the Colombo Plan Staff College for Technical Education– for choosing and highlighting the theme on poverty alleviation. I am encouraged by the active participation of those who have come to attend this session that tackles a very important and timely topic for discussion.

This Forum is a reaffirmation of our unwavering commitment to public-private partnership in our mission to alleviate poverty in this country. The presence of many of the stakeholders here is heartening to note and reflects the keen interest that has been aroused by the topic. It is clear that our work for today will require the pooling of collective energies and forging of partnerships in fulfilling our desired goal of fighting the scourge of poverty.

(SLIDE 2)

Addressing the widespread poverty problem is the single most important policy challenge facing the Philippines. Not only is poverty high when benchmarked with other countries in Asia, but also its reduction is slow. While economic growth in most East and Southeast Asian countries has been remarkably rapid during the past 25 years, the same cannot be said for the Philippines. The country’s economic growth has been quite anemic, barely exceeding the population growth rate, which has continued to expand rapidly at 2.3 percent a year for most of the past two decades.

The glaring fact remains that in our country today, we still have a minority that has too much and a majority that has too little. This is evidenced by the fact that income inequalities have been rapidly increasing. As the old line goes, the rich are getting richer and the poor are sinking deeper into poverty. In 2006 alone, the US$ 12.4 billion net worth of the Philippines’ top 10 richest is equivalent to the combined annual income of the poorest 9.8 million households. Add to this the fact that according to the latest Family Income and Expenditure Survey (FIES) which revealed that the richest 20% of the population account for 53% of the total national income while the bottom 20% got only about 4.83%. This basically says that the income of the richest 10% of households is 21 times that of the poorest 10%.

We are very much aware of the ill effects that grinding and widespread poverty can bring to our country and its people. It can engulf communities and social sectors and maybe transmitted from one generation to another. It shortens life spans, dissipates the human spirit, erodes family and community values, and ultimately destroys the social and economic fabric of a nation.

On a side note, let me underscore, that as of December of last year, the SWS self-rated poverty incidence among Filipinos went down to 46% from 52%. This 6% decline in the country’s poverty was the lowest in 20 years. This is a solid proof that GMA’s administration has been doing its best and that anti-hunger and anti-poverty programs are on the right track. The crucial thing now is to focus our efforts on ways and means to spread the payback of this huge economic turnaround among the people, especially the poorest of the poor. These positive developments should trickle down. They should feel the benefits of the growing Philippine economy.



(SLIDE 3)

My presentation today will diverge from the usual discussions on why there is poverty in the country. Instead what I will accomplish is to introduce the concept of “entrepreneurship” as the key to alleviating poverty.

The concept of entrepreneurship is now attracting worldwide attention, as it has become one of the main drivers of economic growth. Entrepreneurship as I define it is simply the capacity to see an idea, an opportunity, and bringing in the capital, knowledge, partners and the managerial skills needed to develop and then making it sustainable.

The people that live in abject poverty on this planet is at 1.2 billion. If we are to attempt to address the issue of poverty with some degree of success, I believe history will tell us that we have no choice but to turn to and actively encourage entrepreneurial ventures. In the United States in the 1990’s, jobs were created not by large corporations but, rather, by entrepreneurs. From the economic development standpoint of advanced and developing countries including Japan, it explicitly indicates the decisive roles that entrepreneurship continue to play in economic growth.


(SLIDE 4)

There is a relationship between a country’s level of economic development and its level and type of entrepreneurial activity. At low levels of per capita GDP, the country’s industry is composed mainly of small-scale enterprises. When the per capita income increases, the industrialization and economies of scale will then allow larger and established firms to satisfy the increasing demand of growing markets.

Entrepreneurship -- through innovation -- contributes concrete and significant improvements in the quality of life. We must keep in mind that entrepreneurship does not just help at a micro level, in terms of creating stable and sustainable employment for individuals. At a macro level, it impacts positively in a nation's GDP. While entrepreneurship can deliver very positive changes in the lives of people at the grassroots level.


ENTREPRENEURSHIP: KEY TO POVERTY ALLEVIATION


(SLIDE 5)


In his book, The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits, C.K. Pralahad argued that by regarding the world's masses, who he terms "the bottom of the pyramid," as potential customers, businesses and the poor will be better off. To quote “For more than 50 years, the World Bank, donor nations, various aid agencies, national governments, and lately, civil society organizations have all fought the good fight but have not eradicated poverty ... If we stop thinking of the poor as victims or as a burden and start recognizing them as resilient and creative entrepreneurs and value-conscious consumers, a whole new world of opportunity will open up. Four billion poor can be the engine of the next round of global trade and prosperity ... [and] a source of innovations.”

Prahalad pegs the value of their purchasing power at around $13 trillion annually, an amount that exceeds the GDP of Japan, Germany, France, the United Kingdom, and Italy combined. As it exists today, the poor are essentially an under served market. Bringing them the products and services that they demand will not only be worthwhile to the companies providing these products and services, but will give the poor recognition that they lacked as a part of "the masses;" respect in the form of the dignity of attention and choices previously reserved for the middle-class and rich; and fair treatment in being freed from having to pay the “poverty penalty” whereby the poor have to pay a premium for the same products and services offered to the rich. Prahalad argues that "building self-esteem and entrepreneurial drive at the [bottom of the pyramid] is probably the most enduring contribution that the private sector can make" to poverty alleviation. Ignoring the poor does not help. Corporations and policy makers alike need to listen and respond to their needs instead of making assumptions about how they feel and what they require.

(SLIDE 6)

History is littered with examples of remarkable individuals who have turned possibilities into concrete success stories. In the Philippines, one such individual is PCCI’s very own Alfredo Yao who has overcome poverty through entrepreneurship.

PCCI’s ALFREDO YAO: FROM POVERTY TO ENTREPRENEUR

As an entrepreneur, Alfredo Yao has overcome challenges from competition, economic difficulties, technological obstacles, and personal limitations through courage and innovation. He turned every obstacle into opportunities and make realities out of dreams. He created business breakthroughs, thinking in terms of the service he could provide to help others uplift their lives. Over the years, he has helped produce new jobs, new products and new opportunities that have greatly influence the way we live.

Life dealt him a cruel hand early on, but he held on to his dreams, played his cards masterfully, and ended up with a winning hand. His father died when he was only 12 years old and his mother’s income as a sidewalk vendor could not support the family’s needs. As the eldest of six children, he was forced to work at an early age to augment the family income. He was able to go through elementary and high school with help from a relative. He dreamed of being a lawyer but poverty prevented him from pursuing a legal career. In fact, he was too poor to even complete a four-year chemical engineering degree. On his second year in college at the Mapua Institute of Technology, he needed to stop but this became a challenge for him. Rather, it made him stronger and more resourceful individual.

With his attitude, he kept his eyes open for opportunities that would help improve his family’s situation. He did odd jobs and worked at a warehouse of a packaging company. On one of his many trips to a printing press where his cousin worked at a warehouse, inspiration hit him. He saw potential in packaging business and decided to invest in a printing press. His mother loaned from a bank to buy a printing press for cellophane wrappers of biscuits and candies when he was only 17 years old. His printing business which he named after his mother Solemar grew steadily during its first 20 years and by 1966, he switched to plastic packaging.
At an exhibit in Germany in 1979, he was introduced to a new technology in packaging called “doy packs”. He saw great potential in the technology and bought one, but local juice manufacturers thought otherwise. Stuck with what seemed to be a useless piece of equipment, he decided to turn the situation into a golden opportunity. He came up with his own home-made juice products which were formulated literally in his own kitchen sink.

In Mach 1980, Zesto was launched. The unusual packaging caught the public’s interest and consumers thought the juice drinks were imported. In no time, demand for the products exceeded supply, and to stall delivery requests, he had to pretend that addition supplies were being held at customs.
Now, Zest-O is the worlds second biggest producer of natural fruit juice concentrate in doypack next to Capri Sonne, with flavors in orange, strawberry, pineapple, guyabano, mango, mango-orange, apple, grape, mango-calamansi, mango-lemonlime and calamansi.

The Philippine company is likewise expanding elsewhere in the fast-growing Asian region, particularly in China, Indonesia and Vietnam. Prior to the Dubai deal, Zest-O has earlier purchased another beverage company in China.

Today, Zesto juice drinks have a total of 12 different flavors and includes in its product line fruit sodas, purees, and kitchen condiments. It commands 80% of the total market for ready-to-drink juices in the country. The company also produces popular products like One Tea, Sunglo Juice Drink, Big 250 Juice Drink, and Plus! Juice Drink. It also exports mango purees to China, Australia, New Zealand, Korea, Singapore, the US, and Europe. It also produced sodas in can, from root beer to cola, but it is with fruit sodas that Zesto made its mark.

(SLIDE 7)

THE NEED FOR AN ENTREPRENEURSHIP REVOLUTION

I noticed that there is a bias against entrepreneurship in the Philippines. One of the reasons is that there is a lack of entrepreneurial mindset among Filipinos. We were told by our parents to study very hard so that one day we can get a job. And we tell our children to study very hard so that they can have a job, the children of our children. We tell the children that they should study to have a job. And this is passed on from generation to generation to generation, and that is why we have become a nation of employees. We like to serve. We like to be employed. If we cannot find employment in the Philippines, then we go out of the country. And there, in the other countries, we try to find employment.

Among us Filipinos, at the age of 30, we are asked, why haven’t you got a job? But among the Chinese, they are asked, why haven’t you got a business, yet?

These bottleneck can be addressed by sparking a revolution- not the type wherein you will seize a hotel and call for the government to step down- but an entrepreneurship revolution.

Let me now turn to the last part of my presentation. This will focus on what the PCCI is doing to foster entrepreneurship in the country.

Slide 8: PROPEL

The PCCI has initiated strong partnerships with government in “promoting regional opportunities for enterprise and livelihood development” or PROPEL.

Slide 9: Organizational Structure/Program Advisory Committee

Working closely with government, we established PROPEL’s Program Advisory Committee with the Department of Trade & Industry, Senator Kiko Pangilinan and the PCCI, as members.

The PROPEL Project envisions to create globally competitive SMEs which shall showcase the country, its people and its rich natural & human resources.

Slide 10: PCCI Initiatives

The project shall promote the opportunities available for creating and offering products and services to the global market through the transfer of technology, skills and management training, establishing and strengthening the supply chain, improved access to finance and capacity-building for business support organizations.

Slide 11: PCCI’s Advocacy and Networking

The PCCI’s focus is to make members of the organization become world-class businessmen. It will do so by making Philippine business globally competitive by resolving the issues of…
• COST of doing business
• Access to MARKET
• Access to FINANCE / FUNDS
• Access to TECHNOLOGY
• Access to INFORMATION / KNOWLEDGE
• Access to TQM in entrepreneurship
• ENVIRONMENT of doing business.

I have shared with you, at length, the economic benefits of encouraging entrepreneurship. We must realize, however, that entrepreneurship has elements that go beyond simple economics. We must always remember that entrepreneurship is more than just an economic term -- it is a way of thinking. Creating jobs, empowering people and giving individuals access to better lives for themselves and their children is a wonderful gift. A happier, fulfilled individual implies a happier fulfilled society. Entrepreneurs have the power to achieve great things. We must provide them the thrust. Entrepreneurs will emerge as the well-oiled wheels that will keep the economy going and the society efficiently running.
Indeed, entrepreneurship is not simply a notion. Today, it has become a dynamic, developing part of the economy. Entrepreneurship is a way of inspiring creative individuals to pursue opportunities despite its risks.

In ending, let me challenge the Colombo Plan Staff College for Technical Education leadership to take up the lead in accelerating our economic and social reforms through entrepreneurship. Let me challenge you to blaze a trail to prosperity that will be sustainable. Let me challenge you to dedicate your time, talent and your energies- to this crusade we would like to begin- to win for our people the good and prosperous society they deserve- and for our country to regain a respected and enhanced position in the world community.

Thank you and mabuhay po tayong lahat!