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Positioning Co-ops in a Digital Economy

Trade & Industry Undersecretary  for Competitiveness & Innovation Rafaelita Aldaba shared with the NATCCO Leaders’ Congress that it is important for co-ops  to understand how you can position cooperatives in the new digital economy, take advantage of the opportunities and address challenges and know the role of the government agencies like the Department of Trade & Industry in helping cooperatives prepare for the new digital era.
 
Here is her abridged speech: 
 
First, let me brief you of the Philippine economy.
 
Amid the economic and global uncertainty, the Philippine economy grew 6.4% from 2010 to 2017.  In 2018, we grew 6.2%, ahead of Indonesia’s 5.2% but behind Vietnam’s 7.2% and China’s 6.6%.
 
Manufacturing has driven the economic growth in Asia.  Philippine growth was also driven by rising costs in China, a young English-speaking workforce, a growing middle class with purchasing power, resulting in a growing domestic market.
 
There’s already a growing global support for platform cooperatives, computing platforms and websites, and mobile apps for sale of goods and services.  The main difference is that traditional cooperatives don’t use digital technologies, but what we want to happen is for the transformation to happen.  Transforming from using traditional processes in our co-ops’ operations to digital technologies.  
 
We have a few successful cases:
 
Fairmondo is an online marketplace for ethical goods and services, considered as a cooperative alternative to Amazon and e-bay.  
Loconomics is a worker-owned online and mobile marketplace in the US that allows customers to find freelance labor to small everyday tasks like babysitting, pet care, etc.  
 
Stocksy is a platform co-operative that uses a website with a collection of royalty-free stock photos, and the members are actually photographers.
E-commerce offers tremendous opportunities for co-ops.  Digital technology can boost sales, reduce cost, and provide access to a larger (even worldwide) market.
 
One new area is digitization is the Distributed Ledger Technology (DLT).  BlockChain is a form of distributed ledger that can virtually handle the entire e-commerce experience, including product searches and selection, payment processing, and post-sales customer care.
In the Philippines we haveTraxion, SEA Coop, and CashCart.
 
We also have fintech, which encompasses technologies used in the financial services sector disrupting traditional financial services.  Fintech industry includes mobile payment, money transfers, loans, fund raising and asset management.  There is PesoNet, InstaPay, and of course, Kaya Payment Platform of NATCCO.
 
How to take your co-op’s business online?
 
Adopt Fintech to document business operations and track sales, produce and utilize financial reports, and make transactions faster.    Fintech also helps to establish your brand.
 
Tap Existing e-commerce Platforms.  There are already several existing e-commerce platforms operating in the Philippines that you can partner with.  These have established infrastructure and operations  offering online storefront, payment and settlement, and order fulfillment.  This is also the cheaper option.
 
Set up Your Own Website.  If you insist on going your own way, this can be challenging but gives your business to flexibility to be creative.
E-commerce is heavily dependent on the availability and quality of internet connection.  So your Government aims to make broadband use more affordable, boost education and training systems to deliver the skills required in the digital economy.  
 
While many products are delivered digitally, we expect rapid growth in shipments of small parcels and low-value goods.  Having the infrastructure ready for that is in the best interest of small and medium enterprises.
 
With this, you can market your products online!  
 
Government has identified priority products like coffee, processed vegetables, aerospace parts, electronics, tourism, coconut, processed meat, furniture, cacao, processed fruits, seaweed, rubber, and agribusiness products.
 
In closing, let me quote ACDI MPC Chairperson Gilbert Llanto when he learned that President Duterte had placed the Cooperative Development Authority under the DTI: “Co-ops have to be successful enterprises engaged in productive pusuits, capitalizing on its cooperative ventures, geared towards satisfying national and regional (global) needs.  Co-ops need to slug it out in the competitive world of commerce and not confine itself purely to the sector’s needs.  We have to be diverse in our pursuits as well as specialists in our field.  Under DTI, we will undoubtedly grow!”
 
Rafaelita M. Aldaba is Undersecretary for Competitiveness & Innovation of the Department of Trade & Industry (DTI).  She fulfills a key role in the formulation and implementation of the Inclusive Innovation Industrial Strategy which puts innovation at the heart of the country’s new industrial policies.  Aldaba is also a member of the Board of Governors of the Philippine Board of Investments (BOI).  Apart from manufacturing resurgence and industry roadmaps, she is leading DTI’s initiatives in entrepreneurship ecosystem development under the Inclusive Filipinnovation and Entrepreneurship Roadmap.
 
 
 
 

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