Study Cebu’s creative sector

Friday, July 15, 2011

HIGH costs and the lack of understanding are some of the reasons companies in Cebu see no need to innovate, a survey on innovation revealed.

Joan Jaque, of HydroNet Consultants, presented results of a 2009 survey on innovation activities in Cebu yesterday during a consultation with stakeholders at the Department of Science and Technology.

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Metro Cebu was one of four areas picked for the country’s pilot survey on innovation.

The other areas included in the survey were in Quezon City, Davao City and Peza-areas of Laguna and Cavite.

Undersecretary Fortunato dela Peña explained they picked the manufacturing and services sectors as pilot areas for the survey. They decided to pick companies in food manufacturing and processing, electronics and information technology.

He admitted there were calls for a survey that would include more sectors and more areas, but said that a survey on such a scale would be expensive.

Still, he said the intention was to find out the level of innovation activities that some companies in the country were employing.

Tradition

Jaque said that respondents of the Cebu survey who did not innovate no longer saw the need to do so if their companies already dominated the market. Others were uncertain if there was a demand for the innovations in goods and services.

Stakeholders who were gathered for discussions on the survey cited the lack of exposure to international markets, the preference to stick with traditional methods and the “bahala na” attitude or fatalism as additional barriers to innovation.

The survey targeted 129 establishments in the cities of Cebu, Mandaue and Lapu-Lapu.

Of the 129 establishments, 35 percent are large companies, 23 percent are micro enterprises, 25 percent are considered small enterprises and 17 percent are under the medium-sized category.

0Based on their findings, Jaque said 55.8 percent of the respondents were “innovation active”, with medium enterprises as the highest innovators. Of the number of establishments that innovated, 38 percent chose to innovate in their products.

Jaque admitted that for Cebu, the figures should have been higher. During focus group discussions, many cited that the figures were low because creative industries, such as furniture and fashion accessories, were not included in the survey, a sector that is strong in Cebu.

The survey also showed that companies that spend for innovation put their money on training of personnel and the purchase of new equipment, machinery, or software.

Free information
They spend the least on outsourcing research and development and in acquiring external knowledge. During focus group discussions, Jaque said those present cited the availability of free information on the Internet made companies decide against spending for these.

Factors that drive large companies to innovate are their goals to enter a new market and increase market share. For micro and small enterprises, they innovate to improve on the quality of their goods and services and increase their capacity for production.

Not many innovate because they want to reduce the use of materials and energy.

A low eight percent of the respondents were able to avail of government services, citing the “cumbersome” processes and bureaucracy that entrepreneurs had to go through just to avail of these services.

To encourage the culture of innovation, respondents recommended that a regular survey be done every two years and for government to promote innovation and the best practices adopted by companies be recognized.

They also asked that the survey be expanded to include creative industries, tourism, maritime industry and those specific to micro, small and medium enterprises.