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Chapter 14Vigorously Advancing Science,Technology, and InnovationScience, Technology and Innovation (STI) plays an important role in economicand social progress. It is a key driver of the long-term growth of an economy.Technology adoption allows the country’s firms and people to benefit frominnovations created in other countries, and allows it to keep up and even leapfrog obsolete technologies. This can lead to significant improvements in theproductivity of firms in agriculture, industry, and services.On the other hand, long-term investments in building the local capacity fortechnology generation can lead to innovations that will give firms a competitiveadvantage. This can result in the creation of new firms and even entirely newindustries that can provide high-quality jobs. Due to the long gestation period fordeveloping this capacity, it is important to start planting the seeds early.Just as important, STI can lead to the creation of new public goods and services(or new methods of delivering public goods and services) that will help addressthe needs of society, especially of the disadvantaged, including in the areas ofhealth, education, energy, disaster resiliency, and climate change adaptation,among others.This chapter discusses the priority strategies and outcomes needed to increasethe country’s potential growth though innovation, which will build the foundationfor a globally competitive knowledge economy.Assessment and ChallengesThere is a low level of innovation in thecountry brought about by weaknessesin STI human capital, low research anddevelopment (R&D) expenditures andweak linkages in the STI ecosystem. In theGlobal Innovation Index1 (GII) Report of2016, the Philippines ranked 74th among128 economies in innovation2, garneringa score of 31.8 out of 100. This is a slightimprovement from the score of 31.1, ranking83rd out of 141 economies in 2015.The country also ranked 5th out of the sevenmembers of the Association of SoutheastAsian Nations (ASEAN) in the survey,ahead of Cambodia (95th) and Indonesia(88th), but behind Singapore (6th), Malaysia(35th), Thailand (52nd), and Vietnam (59th).1The Global Innovation Index captures the multi-dimensional facets of innovation in 128 economies. The index is composedon seven pillars namely: institutions, human capital & research, infrastructure, market sophistication, business sophistication,knowledge & technology outputs and creative outputs. It is co-published by Cornell University, INSEAD, and the WorldIntellectual Property Organization (WIPO).2The overall GII is the simple average of the input and output sub-index scores.Chapter 14 Vigorously Advancing Science, Technology, and Innovation 213
The factors behind the weak performance ofthe STI sector are as follows:Weak STI culture. There is a lack ofpublic awareness and interest in STI.Many sectors do not recognize, appreciate,and understand the use of technologyand science-based information in theirdaily activities. Weaknesses in social andprofessional cultures (i.e., research culturein universities, commercialization of resultsfrom public research, and awareness ofintellectual property rights) in the researchcommunity and the general public persist.Despite their availability, there are reportsthat the technologies are not widelyused among micro, small, and mediumenterprises (MSMEs) and sectors likeagriculture and fisheries. This can beattributed to the lack of awareness on theavailable technology outputs (technologies,processes, or services) derived from publicR&D activities, and the various governmentincentives to support innovation andfurther spur its growth. Other reasons areweak links between technology generatorsand users, capacity constraints of users, andinadequate local government unit support.Low government spending on STI.Investments in R&D are central to enhancingthe country’s innovation ecosystem. STImonitoring and evaluation of expenditureson R&D and innovation activities, as well assupport for human resources development inthe various fields of science and technology(S&T) indicates low government spending.While nominal R&D expenditures increasedby 80 percent to P15.92 billion in 2013,the proportion of R&D spending to GrossDomestic Product (GDP) stood at only 0.14percent. This is substantially below the 1percent benchmark recommended by theUnited Nations Educational, Scientific, andCultural Organization (UNESCO) and theglobal average of 2.04 percent. It is also lowcompared to other ASEAN countries, suchas Vietnam (0.19 %), Thailand (0.36%),Malaysia (1.09%), and Singapore (2.0%)3.The country’s relatively low ranking in theGII Report was pulled down by weaknessesin human capital and R&D, with a score of22.7 out of 100, ranking 95th. This is due tothe low public and private expenditure oneducation and R&D, as well as low tertiaryinbound mobility4.The bulk of R&D spending (60%) comesfrom the public sector. This was used foragricultural and industrial production andtechnology, protection and improvementof human health, control and care of theenvironment. Most of the R&D activities inthe country are concentrated in the NationalCapital Region (NCR), Region IV-A(CALABARZON), and Region III (CentralLuzon).Inadequate S&T human resources engagedin STI R&D. Another indicator measuringthe capacity for technology generation is thenumber of S&T human resources engagedin R&D. As of 2013, the country has a totalof 36,517 R&D personnel, of which 26,495are key researchers (scientific, technological,and engineering personnel), and the rest aretechnicians and support personnel. Thismeans that there are only 270 researchersfor every one million Filipinos, whichfalls short of the UNESCO norm of 380per million population and the 1,020researchers per million population averageacross developing economies of East Asiaand the Pacific.Of the total researchers in the countryfrom the government, higher educationalinstitutions (HEIs) and private non-profitsectors, 14 percent have PhDs, 38 percenthave Master’s degrees, and 34 percent haveBachelor of Science (BS) degrees up to post-UNESCO Institute for Statistics. Retrieved from http://data.uis.unesco.orgTertiary inbound mobility refers to the number of students from abroad studying in a given country, as a percentage of thetotal tertiary enrolment in that country.34214 Philippine Development Plan 2017-2022
BS degrees. The low number of researchersin the country reflects the propensity of theeducational system to produce graduatesoutside of Science, Technology, Engineering,and Mathematics (STEM) programs, whichare the disciplines where R&D flourishes.Nevertheless, the latest GII Report indicatesthat in terms of graduates in science andengineering, the country garnered a score of25.5 out of 100, ranking 26th.Difficulty in increasing employmentopportunities and retaining S&T humancapital. An assessment of the country’sinnovation system conducted by theUnited States Agency for ch and Innovation for Development(USAID-STRIDE) Program revealed thatthe supply of STEM graduates exceedslocal demand. As a result, there is an outmigration and underemployment of manyskilled, locally-trained scientists andengineers. The report also cited a shortagein training in fields that are critical toinnovation, particularly in informationtechnology. This situation makes it difficultfor firms to find workers with the requiredskills.Brain drain contributes to the problemas researchers, scientists, and engineers,who are the key actors for the innovationecosystem to flourish, prefer to seekemployment overseas where there are bettereconomic opportunities and potentialfor advancement. Since knowledge andtechnology are mostly embodied in humanresources, the problem stresses the urgencyto accelerate the development of R&Dhuman resource.Absence of a vibrant intellectual propertyculture. The output of R&D is commonlymeasured in terms of patents applied andgranted to Filipino residents. However,reports show that many universities do nothave the expertise to market their patentportfolios for commercial use. Furthermore,technology generators face persisting issuesin technology ownership, while researchersare constrained by the “publish or perish”phenomenon. This situation results in aweak technology transfer system in thecountry.From 2005 to 2015, there was an annualaverage of 209 patents, 599 utility modelsand 598 industrial design applications.In the same period, an annual average of54 patents, 446 utility models, and 502industrial designs were granted. In 2016,the World Economic Forum (WEF) rankedthe Philippines 86th out of 128 economiesin the number of patents filed under PatentCooperation Treaty per million population.Invention patents granted to local inventorsrepresent the smallest share in the numberof intellectual properties granted from 2001to 2013. Industrial design and utility modelsconsistently comprise the majority of theintellectual properties granted.The country also needs to catch up inresearch publications since the number ofscientific publications in peer-reviewedjournals per million population stands at 55,substantially below that of ASEAN memberstates Singapore (10,368), Malaysia (1,484),Thailand (478), and Vietnam (105).Weak linkages among players in the STIecosystem. The 2009 Survey of InnovationActivities and the 2014 USAID-STRIDEAssessment of the Philippine InnovationEcosystem show that innovation actorshave weak cooperation, partnerships, andtrust among them. Most HEIs perceivecollaboration with companies as outsidetheir core missions and as potentialexploitation of their product or ideas. Firmsreport that convincing HEIs to collaboratewith them is difficult because of resentment,suspicion, and distrust. Hence, firms endup with little technical assistance from thegovernment and research institutions.Chapter 14 Vigorously Advancing Science, Technology, and Innovation 215
Restrictive regulations that hamperthe implementation of R&D programsand projects. The tedious governmentprocurementprocesshamperstheimmediate acquisition of equipmentand other materials for research, whichin turn delays the implementation ofR&D programs and projects. This wasconfirmed by the USAID-STRIDE study,which shows that restrictive regulationsmake the procurement of equipment andconsumables for research extremely slowand unnecessarily complex. They decreaseresearch productivity, publication potential,and speed to market innovations. In addition,the report says that government researchgrants do not compensate universities forthe salary of faculty members’ researchactivities. This practice is rarely seen outsidethe Philippines.Inadequate STI infrastructure. The countrydoes not have enough STI infrastructuresuch as laboratory facilities, testing facilities,and R&D centers. Those that exist needupgrading. The situation contributes tothe lack of absorptive capacity in researchinstitutions. The USAID-STRIDE reportnotes that public institutions failed toprovide young researchers, particularlythose returning from PhD studies abroadwith more advanced research agenda, withthe necessary equipment. The Philippines’leading research institutions also remainconcentrated in Luzon.The government continuously engages in technology-intensive research and capacity building projects toimprove the quality of its service to the people.Some successful examples are the following:Nationwide Operational Assessment of Hazards (NOAH) Project NOAH was initiated in June 2012 to help manage the risks associated with natural hazards anddisasters. The project developed hydromet sensors and high-resolution geo-hazard maps, which weregenerated by light detection and ranging technology for flood modelling. It provides timely warningwith a lead time of at least six hours during floods.Diwata-1 In April 2016, the country launched into space its first micro-satellite called Diwata-1. It was designed,developed and assembled by Filipino researchers and engineers, with support from Japaneseexperts. Diwata provides real-time, high-resolution and multi-color infrared images. They are usedin meteorological imaging, crop and ocean productivity measurements, and high-resolution imagingof natural and man-made features. It enables a more precise estimate of the country’s agriculturalproduction, provides images of watersheds and floodplains for a better view of water available forirrigation, power, and domestic consumption, as well as information on any disturbance and degradationof forest and upland areas.Intelligent Operations Center Platform The Intelligent Operations Center Platform was established through a collaboration between the localgovernment of Davao City and IBM Philippines. The Center resulted in the creation of a dashboard thatallows authorized government agencies (i.e., police, fire, and anti-terrorism task force) to use analyticssoftware for monitoring events and operations in real-time.Establishment of state-of-the-art R&D and testing facilitiesThe DOST in cooperation with HEIs and research institutions established state-of-the-art facilities thatseek to spur R&D activities and provide MSMEs access to testing services needed to increase theirproductivity and competitive advantage. These include the following:-Advanced Device and Materials Testing Laboratories – equipped with advanced equipment for failureanalysis and materials characterization to address advanced analytical needs for quality control,materials identification, and R&D216 Philippine Development Plan 2017-2022
-Electronics Products Development Center – used to design, develop and test hardware and softwarefor electronic productsHigh Performance Computing Facilities – perform tests and run computation-intensive applicationsfor numerical weather prediction, climate modelling, analytics and data modeling, and archivingPhilippine Genome Center – a core facility that combines basic and applied research for thedevelopment of health diagnostics, therapeutics, DNA forensics and preventive products, and improvedcrop varietiesDrug Discovery Facilities – address the requirements for producing high quality and globally acceptabledrugsNanotechnology Centers – provides technical services and enabling environment for interdisciplinaryand collaborative R&D in various nanotechnology applicationsRadiation Processing Facilities – used to degrade, graft, or crosslink polymers, monomers, orchemical compounds for industrial, agricultural, environmental, and medical applicationsDie and Mold Solutions Center - enhances the competitiveness of the local tool and die sectorthrough the localization of currently imported dies and moldsStrategic FrameworkSTI will contribute in the achievementof the overall PDP goal of establishingthe foundation for inclusive growth, ahigh-trust and resilient society and aglobally competitive knowledge economyby increasing the country’s potentialgrowth. This will be done by promotingand accelerating technology adoptionand stimulating innovation. IncreasingSTI in the agriculture, industry, andservices sectors as well as investments intechnology-based start-ups, enterprises andspin-offs will result to the promotion andacceleration of technology adoption. On theother hand, enhancing the creative capacityfor knowledge and technology generation,acquisition and adoption, and strengtheningopen collaboration among actors in the STIecosystem will stimulate innovation (seeFigure 14.1).Chapter 14 Vigorously Advancing Science, Technology, and Innovation 217
TargetsOver the next six years, the government will aim to achieve the targets indicated in thefollowing table.Table 14.1 Plan Targets to Leverage Science, Technology, and Innovation, 2017-2022INDICATORSBASELINEYEARVALUEEND OF PLANProportion of high-tech agriculture, industry and services valueadded in sectoral value added /1No datatbdShare of agriculture forestry and fisheries, and industry &services R&D to sectoral Gross Value AddedNo datatbdTotal number of Filipino patent registered20163142Total number of Filipino utility model registered20165558332016516691No datatbdtbdR&D expenditure as a proportion of GDP /220130.140.50Researchers (in full time equivalent) per million population /32013270300WEF-Global Competitiveness Report (GCR) Innovation Rankingamong ASEAN member countries20165/7ImprovedWED-GCR Technological Readiness Ranking among ASEANmember countries20164/7ImprovedWEF University-Industry Collaboration Index among ASEANmember countries20165/7ImprovedTotal number of Filipinoindustrial design registeredPercent of Technology Business Incubations locators thatgraduatedNumber of Technology Transfer AgreementsNumber of scientific articles published by Filipino authors218 Philippine Development Plan 2017-2022No datatbd2013tbd
StrategiesTo achieve the sectoral outcomes, the strategies as indicated in Figure 14.1 will be pursued.Figure 14.1 Strategic FrameworkChapter 14 Vigorously Advancing Science, Technology, and Innovation 219
Subsector Outcome 1: STI utilization inthe agriculture, industry, and servicessectors increasedSubsector Outcome 2: Investments inSTI-based start-ups, enterprises andspin-offs increasedPromotecommercializationandutilization of technologies from publiclyfunded R&D. The government will promoteand accelerate the dissemination, transfer,commercialization, and utilization ofknowledge, technologies, information andprocesses derived from publicly-funded S&Tactivities without prejudice to intellectualproperty rights. Those technologies withhigh commercial potential shall be givenpriority assistance. The application of theseknowledge, technology, information, andprocesses to the agriculture, industry, andservices sectors will be given priority toimprove productivity. This is expected totranslate to an increase in incomes andjobs, especially in the countryside. Thegovernment will also foster the developmentof networks and markets, and undertakeeffective marketing strategies throughthe extensive use of quad-media and theorganization of fora, fairs, and exhibits.Encourage more innovative financingmechanisms and private sector investments.The government will create an investmentenvironment that encourages more privatesector participation, including angelinvestments, venture capital, and crowdfund-sourcing for STI-based startups,enterprises, and spin-offs. The investmentprovided may be a one-time investment tohelp the businesses launch or a continuinginjection of support fund to help incubatestartups during the early stages of theirdevelopment (see Chapters 8 and 9 onincentives for prospective investors). Thegovernment will strengthen programsthat provide financing to commerciallyviable innovation projects to bridge the gapbetween R&D and commercialization.Develop a vibrant Intellectual PropertyRights (IPR) culture. The initiative toimprove patent applications performancethrough the Patent Incentive Package willbe strengthened. Likewise, the provision ofthe Philippine Technology Transfer Act of2009 particularly on ownership and revenuesharing will be institutionalized. Aggressiveand sustained advocacy to increase theappreciation and understanding of IPRshall be undertaken in order to leverageintellectual property protection as anessential component of the innovationecosystem. The government will alsoconduct information campaigns on theimportance of intellectual property rightsto strengthen public awareness and createan intellectual property culture amongFilipinos.220 Philippine Development Plan 2017-2022Provide support mechanisms for startups and MSMEs in the regions. Thegovernment will strengthen the policy andregulatory environment, and introduce newmechanisms to support technopreneurs,start-ups, spin-off companies, and MSMEs.It will provide platforms for technologycommercialization such as the establishmentof new technology business incubators in theregions in partnership with the private sectorand HEIs; promote available technologies;and extend consultancy and other servicesfor productivity improvement. Theseinitiatives are intended to encourage uptakeof innovation-based entrepreneurship.The Small Enterprise Technology UpgradingProgram will be expanded to enable moreMSMEs to access government assistancefor the provision of innovative and costeffective facilities, provision of technicalsupport for compliance with product andquality standards, packaging and labeling,
as well as training and consultancy services.Additionally, the Startup EcosystemDevelopment Program will be pursued tousher in a new breed of businesses that willthrive in an innovation economy. Underthe program, support for start-ups will bebolstered through government services,capital, and resources. In addition, a startup economic zone will be establishedand assistance in connecting start-upswith industries, including multinationalcorporations and potential markets, will beprovided.Subsector Outcome 3: Creativecapacity for knowledge andtechnology generation, acquisition andadoption enhancedSupport research and development agenda.The government will invest in building anefficient system of knowledge creation andtechnology generation. Among others,this will include basic research that needsrevitalization, promotion and developmentthrough a more rational share in the STIecosystem budget and infrastructure.As suggested in the Organisation forEconomic Cooperation and DevelopmentInnovation Strategy 2015, long-termfunding for curiosity-driven research mustbe preserved, as this has been the source ofmany significant innovations in the past andhas high social returns.Funding support will be provided forthe implementation of the HarmonizedNational R&D Agenda (HNRDA), whichdefines the country’s priorities and guidespublic investment in R&D. The agenda willconsolidate and promote basic and appliedresearch in agriculture, aquatic resources,natural resources, health and nutrition,drug discovery and development, industry,energy, defense and security, and emergingtechnologies.STI initiatives for the creative industries,tourism, and other services industries willalso be undertaken. Public investments willbe channeled to cybersecurity and othertechnology-related ventures. Furthermore,investments will be made in support of thegoal of Self-Reliant Defense Posture, whichdevelops a local defense industry to sustainthe material and non-material requirementsof the defense forces. Innovation activitieson the sectors covered by industry roadmapswill be supported. These roadmaps shallconsider the utilization of results ofresearches and their R&D requirements,which will be made part of the HNRDA.To keep up with the rapid globaltechnological trends and developments,the Philippines will engage in morecollaborative R&D activities and investin infrastructure buildup to develop itscapabilities and maximize the use of thefollowing core and emerging technologies:a) information and communicationstechnology; b) biotechnology for industry,agriculture, health, and environment; c)nanotechnology; d) genomics; e) nuclearscience for energy, health, agriculture, andindustry; f) artificial intelligence; g) spacetechnology; and h) disaster risk reductionand climate change adaptation, andmitigation.Increase funding for human resourcedevelopment.Increasing the numberand quality of researchers, scientists, andengineers is an essential strategy for theestablishment of a vibrant STI ecosystem.The target is to achieve and even surpassthe UNESCO norm of 380 researchers,scientists and engineers per millionpopulation by 2025 from its current levelof 270. This can be achieved by providingcontinuous support and funding to ongoingS&T scholarships such as the following: (a)Expanded Specialized Science SecondaryEducation Scholarship; (b) ExpandedUndergraduate S&T Scholarships forChapter 14 Vigorously Advancing Science, Technology, and Innovation 221
Inclusive Development; and (c) ExpandedS&T Graduate (Masters/PhD) Scholarships.Strengthening these S&T-based scholarshipprograms and providing specializedtraining and incentives will accelerate thedevelopment of the S&T human resourcesthat will be tapped to contribute to nationbuilding. A competitive work environmentwill be created and research as a career willbe promoted to help motivate competenthuman resources to stay in the country.Tap the expertise of foreigners andoverseas Filipinos (OFs). Mechanismswill be established to encourage overseasbased experts to share their knowledgeand specializations with the academeand industry through information andcommunication technology (ICT), suchas videoconferencing. The Balik ScientistProgram and other related initiativeswill be strengthened. The potential roleof OFs in developing the country’s STIcapability will be recognized and pursuedby providing opportunities for them. Thehiring of foreign scientists and experts willbe explored in areas where expertise is notavailable locally to leapfrog products andprocess development and build capacity inthe field. Institutional linkages through OFs,especially in ASEAN, will also be fosteredto encourage more R&D collaboration andcapacity building activities.Strengthen STI infrastructure. STIinfrastructure development will beundertaken across the country in order toaddress region-specific concerns. Nichecenters for R&D will be established to equipregional academic institutions and ion of existing R&D facilitiesand other STI infrastructures, both in thepublic and private HEIs, will be pursued toenable them to carry out higher-level R&Dactivities. The government will also invest inthe establishment of product developmentcenters, materials and product testing5facilities, and climate and disaster riskreduction facilities.Improvement of internet connectivity byputting in place a robust ICT infrastructure,particularly the national broadbandinfrastructure, will be given priority toboost productivity in research and other STIactivities. The government is preparing forthe rollout of its fiber optic cable networkunder the “Convergence Program” to linknational government agencies in a fiberoptic network and shared resources.Establish and promote innovation hubs andother similar mechanisms. Innovation hubswill be established in strategic locations inthe country to include food innovationcenters and shared service facilities. Thecountry will position itself to become theglobal hub for Disaster Risk Reduction andClimate Change Adaptation and Mitigation.The hub will provide a platform for sharingtechnologies, lessons and best practices inresponding and recovering from naturaldisasters such as typhoons, floods, andvolcanic eruptions.In addition, an innovation center will beestablished to promote not only innovation,but also design and creativity, and to providesupport for the creation of incubation centersfor MSMEs and start-ups. The Departmentof Trade and Industry will coordinate withthe Department of Science and Technology(DOST) and other government agencies,the academe, the private sector, and people’sorganizations on the necessary investmentsin scientific and technological research,as well as government support for scienceand technology parks and local R&D andtraining.5Moreover, existing services that will becontinued and bolstered, such as thefollowing: a) One Lab (HarmonizedLaboratory Testing Services); b) One Expert;and c) One Store.Foster an STI culture. The culture ofinventiveness and creativity (see alsoChapter 7 on advancing “pagkamalikhain” orcreative excellence) will be promoted in allBanatao, D. (2016). Creating an Innovative Mindset and Ecosystem. Manufacturing Summit 2016.222 Philippine Development Plan 2017-2022
sectors and as early as possible. Programsto boost the interest of young students topursue STEM courses and the creative artsas viable career options will be pursued.Communicating STI through variousmedia and in partnership with differentstakeholders will be carried out to increasepublic awareness and interest on theimportance of STI in daily life.An STI culture that fosters more effectivedecision making will be promoted amongpolicy makers and government officialsand employees. Being major users andconsumers of products and services,government offices will also serve asshowcase and promoter of innovative andSTI-based solutions. The government willalso support LGU-led innovation activities.Sub-sector Outcome 4: Opencollaboration among actors in the STIecosystem laboration in R&D based on the triplehelix model, which involves the coordinationand cooperation of university, industry, andgovernment, will be strengthened. It willbe facilitated through the elimination ofinstitutional bottlenecks for joint researchactivities, such as burdensome processesand administrative procedures, particularlyin public higher education and researchinstitutions. The government will alsoleverage public R&D grants, tax, and otherincentives to increase productivity.Intensify international cooperation inSTI. International cooperation will bepursued more aggressively to enhance theflow and benefit of a wide range of existingknowledge and technologies from othercountries. Existing fora such as the ASEAN,Asia-Pacific Economic Cooperation andother similar platforms for dialogue andcollaboration will be utilized.Public and private STI institutions will beencouraged to participate and collaboratewith international partners in researchplatforms that seek solutions to commonregional concerns such as food security,climate change, disaster risk n of resources and biodiversity.These research platforms necessitate specificand strong support for policies that can:(a) facilitate the mobi
Vigorously Advancing Science, Technology, and Innovation Science, Technology and Innovation (STI) plays an important role in economic and social progress. It is a key driver of the long-term growth of an economy. Technology adoption allows the country's firms and people to benefit from
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