PHL firms lack innovation —survey

A comprehensive study on innovation activities in the Philippines has shown that there is a need to further strengthen the policy framework for innovation and to articulate the country’s innovations strategy to local firms. This conclusion was based on the government-funded Survey on Innovation Activities (SIA) 2009, which was spearheaded by the Department of Science and Technology (DOST) in partnership with the Philippine Institute of Development Studies (PIDS) and the International Development Research Centre (IDRC). The results of the report were discussed by its proponents in a press briefing on Monday at the Dusit Hotel in Makati City. According to the study, around two-thirds of medium and large establishments surveyed can be considered “innovation active", compared to half and one-third for small and micro-establishments, respectively. Only one in 20 firms reported that they received public support for their innovations. The survey also noted that establishments in the Philippine Economic Zone Authority (Peza) areas lead in innovation activities, with an average expenditures of P25.6 million. “Firms in Peza, all other things equal, are more likely to be innovators than firms in other areas," the report said. Contrary to the notion that big companies are generally immobile, the study said employment size matters for process innovation. “The larger the firm, the more likely it is a process innovator." The main barrier to innovation, according to the report, is the direct cost associated in implementing changes in the system. Knowledge networks are also rather weak, the study said. “Firms do not access technical assistance from the government and research institutions. Cooperation is also low between the firms and the academe." The term innovation, traditionally associated with research and development, has evolved to mean the implementation of new or significantly improved goods and services, production process, and marketing organizational methods in a firm. In 2007, a number of representatives of government, academe, and industry, led by IBM Philippines, formulated a national innovation strategy called “Filipinnovation". The national strategy involves developing partnership toward making the Philippines competitive with its Asian neighbors and at par with innovation leaders in the region. The goals include strengthening human capital, supporting business incubation and acceleration, regenerating the innovation environment, and upgrading the Filipino mindset to be open to new ideas. The survey was conducted in order to understand the dynamics of innovation with economic growth as well as to provide indicators for benchmarking national performance. In particular, the objectives the study were: describe the types of innovations engaged in by the firms, provide information regarding the environment in which the innovative activities are conducted, and determine the factors that drive their innovative performance, as well as the barriers and the effects of innovation on the firms. The survey targeted 500 establishments across four study areas: Quezon City, Metro Cebu (Cebu City, Lapu-Lapu City, and Mandaue City), Davao City, and the Peza areas in Cavite and Laguna. It covered three major industries: electronics manufacturing, food manufacturing, and information and communications technology. Senator Edgardo J. Angara, who was a guest at the event, urged the government to implement a nationwide initiative on Science and Technology (S&T) innovation to spur economic growth and enhance the country’s competitiveness. “There is not a single government agency that singularly pushed for innovation. This is why we perform so poorly compared to our neighbors," explained Angara, chair of the Congressional Commission on Science, Technology and Engineering (Comste). The legislator said the survey was “a timely, relevant piece of input to governance and public policy, pointing out that around 54 percent of the firms interviewed were innovators." “Unfortunately, the study also shows that in terms of innovation, government is a very passive, indifferent actor," said Angara. “But now we ought to wake up and demand that government must commit to implementing a national innovation program in a coordinated, single-minded and dedicated manner. There must be financial and policy support to generate a local pool of trained S&T professionals. Government should begin to incentivize innovation in the country," he stressed. — Newsbytes.ph