In the past seven weeks, I wrote about the numerous changes happening in the local business scene. The changes make the present different from the past, and future changes will relegate the present to the past.
So many changes are happening, such as the transformation of the retail business from a few square meters of a sari-sari store to hectares of shopping malls, the wave of global brands sweeping our shores, or the rise of the Philippines to star status in the investment community.
I have seen, and even participated in, these changes, so I am in a good position to analyze the developments that have happened in the past several decades.
In the Philippines, as well as in other countries, we saw the rise and fall of big companies. Enron, which began trading natural gas in the late 1980s, became the biggest in its business in the US and in the United Kingdom, until it went bankrupt in 2001.
Everybody knows about Sony, once the world’s electronics leader, which is currently trying just to survive. Nokia, once the biggest name in cell phones, has sold its handset business, overtaken by newcomers Samsung and iPhone.
During the mid-1950s, four out of five cars in the world were made in the US, and half of them (about 4 million) by General Motors. Toyota, on the other hand, produced just 23,000 cars in 1955.
In 2013 Toyota sold more than 9.9 million cars, beating GM by more than 200,000, to keep the Japanese company’s title as the world’s No. 1 carmaker.
When I was young, the household names when it comes to retailing were Good Earth Emporium, Aguinaldo’s Department Store, Oceanic Commercial and Syvels, among others.
At that time, Shoe Mart was what its name suggests: a shoe store. Today, SM is the retail leader, and the other household names in shopping have been replaced by Robinsons and Ayala, among others.
Acme Savings Bank, one of the smallest banks in the country with two branches in 1968, was bought by a certain Henry Sy. Acme became BDO Unibank, now the biggest in the country, dislodging traditional and much older leaders like Bank of the Philippine Islands.
Ayala Land, which was untouchable as a leader in the real-estate industry, is now being challenged by SM Prime.
Compared to other countries like the US, the changes in business leadership in the Philippines have not been as dramatic. For a long, long while, the big business groups have been headed by the same names – Sy, Gokongwei, Consunji, Ayala, Yuchengco and Aboitiz. The biggest local banks are still controlled by the same families. Of course, time dictates the inevitable passing of the torch from the first to the second generation, which sometimes results in the partition of some groups, sometimes leading to decline, and in other cases, resulting to stronger companies.
During the 1950s, 1960s, 1980s and the 1990s, we saw sunrise industries that eventually became sunset industries, although some managed to be revived. In a way, business is like politics: it will be the same and will be different at the same time, because of competition. New companies will rise, while others will fall. This is the message I want to impart to would-be entrepreneurs, small businessmen wanting to become big, or even to the executives of mid-sized companies. Sometimes, when people talk about business, the feeling that surfaces is that big business groups have gobbled up all the opportunities, leaving nothing for aspiring businessmen.
Seeing the numerous mergers, acquisitions being made by big business groups, one would think that the good opportunities have been depleted. But that’s not true, as history tells us. Based on the examples I cited earlier, we have seen in our lifetime very big companies that were seemingly untouchable being relegated to insignificance, or at least to minor roles in their industries.
Forbes magazine recently named the 12 Filipino billionaires who were included in the magazine’s list of the world’s richest people. The names on the top slots have been there for several years, but new billionaires have joined the list. Ten years or 20 years from now, we don’t know who will be No. 1 on Forbes’s list. It could well be someone just starting his own company right now. I firmly believe opportunities abound for entrepreneurs or small businessmen who want to become big. Compared to developed countries, or even to some emerging economies, we still have few industries.
This is because the pace of change in the Philippines is much slower, because our development in the past 40 years has been slow. But I am confident that going forward, we will be moving faster.
Actually, I think we are in the faster stage now, we have started the momentum. Ten years from now we can have a new set of industries, and 20 years from now, another set. The number of big companies in the Philippines can double, triple, even quadruple moving forward.
Instead of being daunted, the success of today’s business leaders should inspire aspiring entrepreneurs to be keen in identifying opportunities and working hard to transform these into vehicles for their own success.