Creating an ‘innovation climate’

THE Philippines needs to beef up its innovation capacity. It has not scored well in the Global Innovation Index (GII), ranking fifth among seven member-states of the Association of Southeast Asean Nations (ASEAN) and 73rd among 127 countries.

According to Philippine Institute for Development Studies (PIDS) Senior Research Fellow Jose Ramon Albert, this poor performance can be attributed to the low amount of public expenditures on research and development (R&D), inadequate number of research scientists and engineers, inadequate infrastructure, restrictive regulations that hamper research, and the weak linkages of firms engaged in innovation activities with government and the academe.

“While the Philippines has had a slight increase in R&D expenditure as a percentage of the gross domestic product (GDP) in recent years, it spends only less than a fifth of one percent of the GDP,” Albert explained during a recent seminar on Measuring and Examining Innovation in Philippine Business and Industry.

The United Nations Educational, Scientific, and Cultural Organization recommends that developing countries spend one percent of their GDP on R&D, Albert said. The Philippines’ spending level falls below that of Singapore (2.4%) and Malaysia (1.3%) and even that of Thailand (0.5%) and Viet Nam (0.2%).

Familiar issue

Albert noted that the low spending issue on R&D activities is an old concern that reflects the little priority given to science, technology, and innovation in the country.

To foster innovation in the Philippines, Albert, citing his 2015 Survey of Innovation Activities, stressed the importance of human capital investment. “R&D spending will have little impact without a vast pool of well-trained engineers and scientists, and human resources. For instance, China’s progress can partly be attributed to its decision to open up to innovation and invest in human capital,” he said.

Albert also recommended giving assistance to micro, small, and medium enterprises (MSMEs) in terms of financial and training support. But this should be targeted because helping MSMEs without focus can be a recipe for disaster, he emphasized.

Strengthening linkages between knowledge producers and users can also improve the innovation climate in the country. According to Albert, the government will need to actively promote the free exchange of ideas and flow of knowledge from outside companies.

“Establishments, especially large firms, need to be stimulated to cooperate for innovation rather than being averse to networking with their competitors. Improving networking and promoting linkages and collaboration among the government, industry associations, and universities and research institutions must be pursued vigorously and should be given far better budgets than what is currently available,” he said.

Focus on public good

Albert proposed that government look into regulatory frameworks, as regulators may have a tendency to focus more on implementing regulations (that may not be always applicable to changing environments) than prioritizing the ultimate goal of public welfare.

“National government agencies, local government units, and legislators need to work in tandem with academe and the business sectors to foster innovation. The government needs to provide more leadership in bringing people and institutions together, and it is important to have one voice over the cacophony of discordant voices we may hear from various government entities,” he pointed out. (PR)
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