Telecommuting From The Philippines

March 5, 1997

Written by request for the Office of Senator Gloria Macapagal Arroyo by Don A. Herrington, CEO Online Workers, Inc. NGO

Telework [known as outsourcing now] and the Emergence of the Internet from the Philippine Perspective.

I. Telework

A. What is Telework and how does it relate to the Internet?

Telework is the biggest change to working practices to since the industrial revolution. It is a relatively new way of doing work by computer, telephone, fax, e-mail and other electronic data transfer equipment. It is the act of performing work at a site remote from the employee. The Internet is allowing this new “distance,” employment to flourish.

Labor and commercial rental costs, pollution concerns, traffic considerations, employee health and workers compensation and concern about family and culture are some of the major forces driving telework. Telework may be the only solution to these serious and growing challenges.

The Internet, the world’s the newest and most powerful communication system, is changing the way the world communicates. This economical and almost instant communications system allows anyone who has a telephone and a computer to connect with universities, libraries, governments, businesses, and private individuals anywhere in the world, fast and cheap. It is what makes telework now feasible. For the Philippines, an English speaking country with an educated population and serious unemployment, it is a blessing that can bring employment and foreign exchange to the doorsteps of millions of Filipinos.

B. The Future of Telework and the Internet in the Philippines

The Internet is big and growing. In the United States there are an estimated 50 million users and in the rest of the world approximately 10 million. New users are being added every day to the system at an estimated rate of one million per month. It is in every country of the world. Billions are being spent to improve and expand the Internet and the infrastructure that supports it. Teledesic and Iridium two major satellite communications efforts have just entered the field. Iridium already has five of its 51 satellites up and they will be operational in 1997. These two companies have combined budget is more than 20 billion dollars. Their satellites will bring the Internet at super speeds to the major metropolitan areas. And the access will also be available from the smallest, remotest nipa house in the Philippines, even without a telephone. Internet II is another major private development project presently under construction that will speed and spread the service.

C. The Ability of the Philippines to Compete

Telework is in its infancy. No nation has yet become positioned as “the” nation of teleworkers. It is possible, if not likely, that one of the economically developing English speaking countries like the Philippines, who can compete comfortably in the international markets, will become central sources for teleworkers. This paper addresses the opportunities and problems in achieving a world teleworking presence on the Internet for the Philippines.

The Irish Telework Plan under the section titled “Global Competition” cites as competition “Asian and Pacific Rim countries whose (sic) labor costs are a fraction of the Irish costs; however, they tend to be short on European language skills and their telecoms infrastructures range from excellent to erratic. The transfer of British Airways reservations call center to Delhi sounded a warning bell to many European call centers.” With the Philippines English language skills educational level and low labor rates, that same bell sounds loud for big opportunities for the Philippines.

Is often said that the Internet will level playing field for businesses. That the smallest company can now compete in the same level as the large companies. This applies as well to nations. Telework is the means by Filipinos can compete in the international labor market as they have done so successfully in the past, but now without leaving their country, friends, family and culture.

There are other major players in the international telecommuting arena. One is India, long active in software development and a partner with Microsoft. They too have a lower employee cost of living and telework prices will have to be competitive with the India’s. Pakistan a nation with known telecommuting accomplishment and high ambitions. With new translation software, China could be a competitive soon.

The oldest and perhaps most insightful Internet Joke is about two dogs talking. One says to the other “On the Internet, they don’t know we are dogs.” But on the Internet, people do know if you are educated and if you are comfortable with the English language, and they can tell if you do produce. That is the bottom line of Filipino competitiveness

D.  What Kinds of Telework are there?

Telework is one of the many subdivisions of telecommuting. Some employees perform part of their jobs by telework and others perform all of their work from a site remote from their supervisors. Most often these later employees are independent contractors, freelancers and go from one job and one employer to another. They may never see their employer at all. But they may communicate with that employer by computer ten or twenty time or more in one day.

One can argue that teleworkers are not employees at all, but in the truest sense private contractors. They usually receive no benefits or tenure. They are usually professional employees hired only for the duration of a contract. Successful teleworkers, unlike permanent employees, are constantly searching for the next job(s) and always involved in the self promotion required to get the next job.

E. Work or Service Business

It is hard to distinguish a teleworker from a service business. Consider a graphic artist offering services by telework. This can be a company or individual. It can be one person alone or with many associates, employees or partners. The graphic artist can be considered as an employee or a shopkeeper, depending on the relation established with the employer. Since there is little of an employment relationship, no benefits, no long term agreement, no tenure, telework is more easily defined as a service business than employment.