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The Philippine ICT Industry and the Middle Income Trap

Chapter
Part of the New Frontiers in Regional Science: Asian Perspectives book series (NFRSASIPER, volume 17)

Abstract

This chapter constitutes a macroanalysis of the Philippine Information and Communications Technology (ICT) sector, which has come to be a critical part of the country’s economic development. It investigates the role of this sector in relation to the (lower) Middle Income Trap (MIT), which is considered as a major factor for the generally poor performance of the Philippines since the end of the world war. The analysis focuses on two structural phenomena that have been associated with the MIT: early deindustrialization and product trap. To this end, the ICT sector is divided into the soft portion corresponding to the services sector and the hard portion corresponding to the manufacturing sector. The soft portion analysis uses the three Kaldorian laws to investigate whether or not the early deindustrialization is premature (bad) or precocious (good). The hard portion analysis uses product space proximity and input-output tables to assess the nature of the product trap in the Philippines. The general conclusion is that there is a need for a strategic look at the ICT sector, especially with regards to the very real possibility that the ICT industry poses the risks of slowing down the growth of the Philippines through premature deindustrialization and a product trap.

Keywords

Philippines Middle income trap Product trap Early deindustrialization Kaldor/Kaldorian law 

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Copyright information

© Springer Japan 2017

Authors and Affiliations

  1. 1.Department of EconomicsTemple UniversityTokyoJapan
  2. 2.Sekiguchi Global Research AssociationTokyoJapan

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