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IN FOCUS: Improving economic productivity through innovation
Although the Philippines has recorded a high-growth path in the past years, many analysts contend that the country could achieve more if it can improve its innovation capacity, which, inarguably, remains wanting. In the 2016 Global Innovation Index (GII) Report, co-published by Cornell University, INSEAD, and the World Intellectual Property Organization, the Philippines ranked 74th among 128 countries. Compared with its Southeast Asian neighbors, it is trailing behind Singapore (6th), Malaysia (35th), Thailand (52nd), and Viet Nam (59th). Indonesia and Cambodia ranked 88th and 95th, respectively. Amid its growing potentials, the Philippine innovation sector continues to lag behind due to poor investment in research and development (R&D). Philippine investment in R&D hovers at a level of 0.12 to 0.14 of the gross domestic product (GDP), which is one of the lowest in Asia. In contrast, other developing countries (e.g., Japan, United States, Republic of Korea, and Germany) invest more than 2 percent of their GDP in R&D activities. A pressing concern is also increasing the country’s S&T human resource pool to offset the continuing migration of S&T graduates abroad, owing to more lucrative economic and professional opportunities. State think tank Philippine Institute for Development Studies (PIDS) has conducted numerous studies on the close link between innovation and productivity. According to Gilberto Llanto and Fatima Lourdes del Prado, PIDS president and former research specialist, respectively, aside from physical and human capital, firms need to invest in innovation. They also argue that in designing development agendas, policymakers, donors, and the stakeholder community usually consider the promotion of innovations as a tool to develop the capacity of small and medium enterprises to generate higher value addition and greater job opportunities. Their research also shows that firm size, age, and foreign equity are important factors leading firms to innovate. Moreover, a case study on the automotive manufacturing industry by Francis Quimba and Maureen Ane Rosellon, PIDS research associates, reveals that the difficulty lies in translating the awareness of the importance of knowledge and technology into actual firm innovation. Meanwhile, a volume of work by Epictetus Patalinghug, Jose Ramon Albert, Rafaelita Aldaba, and Fatima del Prado shows a range of factors that determine or impede decisions to innovate. These factors include incentives, firm capabilities and resources, market factors, and the investment environment. Patalinghug, a PIDS consultant, notes that policymakers must create incentives like a stronger intellectual property rights law, standardized quality system, and the availability of technology transfer programs. Meanwhile, Albert, Aldaba, and del Prado emphasize the need to ease barriers to trade. According to them, the government has to be vigilant about stamping out anticompetitive practices. At the same time, it needs to address issues of inadequate physical and institutional infrastructure. Currently, R&D investments are shouldered by a large margin by the Filipino taxpayers. Troublingly, despite government efforts to encourage firm innovation through initiatives like the Small Enterprises Technology Upgrading Program, Albert and his co-researchers note that the influence of government R&D and technology resource centers is still very weak. The case for building an innovation-centered mindset does not rest alone on the cooperation between the private and public sectors. Strong linkages and coordination among research institutions, universities, and industry associations should be established, and collaborations to share knowledge and translate that knowledge into useful technologies should be encouraged. These should be complemented by well-crafted and implemented technology promotion and utilization programs that facilitate easy access to technology for the majority of the population. You may access these and other PIDS studies on Innovation from the SocioEconomic Research Portal for the Philippines. Simply type the relevant keywords in our Search box.
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March 30, 2017 February 28, 2017 February 21, 2017 February 9, 2017 ---------------------------------------
PIDS ranked among world's best think tanks for fifth consecutive year
For the fifth time since 2012, state think tank Philippine Institute for Development Studies (PIDS) has been ranked one of the world's top think tanks. In the 2016 edition of the Go To Think Tank Index Report released by Think Tanks and Civil Societies Program (TTCSP) of the University of Pennsylvania, PIDS ranked 38th among the 100 top think tanks in Southeast Asia and the Pacific. It has also retained its rank as number one social policy think tank in Southeast Asia and 37th among the top 100 in the world under this category. PIDS also performed well in five other categories. It maintained its rankings as among the top international development think tanks (70th among the top 130) and among the top education policy think tanks (33rd among the top 65). PIDS also made it to the list of best government-affiliated think tanks and think tanks with the best external relations/public engagement program. CLICK HERE FOR THE FULL ARTICLE
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RESEARCH PAPER SERIES
ECONOMIC ISSUE OF THE DAY
POLICY NOTES
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The Philippines needs to develop an enabling "ecosystem" of policies and institutions to scale up social enterprises. In a recent study released by state think tank Philippine Institute for Development Studies, authors Marife Ballesteros and Gilberto Llanto remarked that social enterprises can be an important force in addressing the gaps between the country's paradoxical experience of positive growth and persistent poverty. READ MORE |
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If properly implemented, the government's National Greening Program (NGP) can help in reducing poverty and preserving the environment. In a policy note released by state think tank Philippine Institute for Development Studies, Senior Research Fellow Danilo Israel said there is high probability the expected outcomes of the NGP will be attained, if it is implemented efficiently and effectively and as planned. The NGP was a priority program of the Aquino administration aimed at poverty reduction, food security, environmental stability and biodiversity conservation, and enhancement of climate change mitigation and adaptation. READ MORE |
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State think tank Philippine Institute for Development Studies disproved arguments against the sex education provision of the Reproductive Health (RH) Bill in a paper written by Michael Abrigo and Vicente Paqueo. Critics of the RH bill have lobbied that age-appropriate health and sex education in schools will lead young people to have sex much earlier and will increase rates of sexual activity. Abrigo and Pacqueo cited studies showing not only the lack of evidence for these claims but also the evidence for the opposite. READ MORE |
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A study by state think tank Philippine Institute for Development Studies disclosed the unintended consequences of open access fishing and fishing ban policies in the Zamboanga Peninsula, the country's sardine capital. Authors Danilo Israel, Milva Lunod-Carinan, and Vicente Paqueo said the Philippines has reached its maximum economic yield (MEY) as early as the 1960s. For instance, fish stock harvest from 1998 to 2001 was 30 percent higher than they should be. Having gone beyond the MEY, the fishery sector has not only depleted the economic value of its livelihood source but has also caused alarming damage to the environment. The economic losses from overfishing are estimated at PHP 6.25 billion. READ MORE |
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A recent paper released by state think tank Philippine Institute for Development Studies recommends the setting up of a dedicated organization that will oversee the development of policies and implementation of strategies regarding catastrophic health. At present, various forms of financing for catastrophic expenditures are being provided by different public and private institutions, each of them having its own rules and procedures on how to avail them. The Philippine Health Insurance Corporation, Philippine Charity Sweepstakes Office, Department of Social Welfare and Development, Philippine Gaming Corp., and some members of Congress are among the government entities that provide financial support to patients faced with catastrophic health problems. READ MORE |
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The government has been able to provide water and sanitation to communities that needed them the most. According to a new study by state think tank Philippine Institute for Development Studies, the expansion of water supply and sanitation services has benefited more than 3 million people under both the Arroyo and Aquino III administrations. However, authors of the study, Alma Porciuncula, Doreen Carla Erfe, and Adoracion Navarro, noted that there is still room for improvement in terms of policy and program design of the government's water supply and sanitation programs. Thus, they argued that it is important to revisit the old programs and evaluate them to ensure the success of similar projects in the future. READ MORE |
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EMPLOYMENT
The annual employment rate for 2016 was reported at 94.5 percent, while the unemployment rate was 5.5 percent, based on the 2016 Labor Force Survey. The labor force participation rate was estimated at 63.4 percent while the proportion of underemployed persons (or those employed persons who expressed desire to have additional hours of work in their present job, an additional job, or a new job with longer working hours) was estimated at 18.3 percent. (Note: Estimates based on the average of the four rounds—January, April, July, and October.) To download the time-series (quarterly) data on employment, please click this link: http://econdb.pids.gov.ph/tablecategories/index/82. Source of data: Philippine Statistics Authority |
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Need help? Have feedback? Feel free to contact us. © 2017 Philippine Institute for Development Studies.
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Long-term national development relies on innovation. Progress in science and technology (S&T) infused with innovation is necessary to achieve sustained economic growth. Innovation improves firm competitiveness and enables access to global markets. Simultaneously, innovation helps expand job opportunities and introduce new industries to the economy. 
