(Published in the Manila Standard Today under the “Greenlight” column, December 10, 2007)
“Filipinnovation” is the catchword of the recently held Philippine National Innovation Summit, which was organized by the Department of Science and Technology (DOST), IBM, Asian Institute of Management’s Policy Center and the Intellectual Property Office, in cooperation with other private organizations and government agencies. Not only does the new word show the natural innovativeness of Filipinos in wordplay, but more importantly it captures the soul of the Philippines’ national innovation strategy – that we Filipinos need to embrace innovation as a way of life in order to stay competitive in the global economy.
Presenting a framework for focusing energies
The summit is laudable as it was able to cover three major aspects of the national innovation strategy - human capital, industry and public policy - each one having specific directives. This will serve as a road map for the stakeholders in the Philippines’ National Innovation System. A national innovation system (NIS) is the flow of technology and information among people, enterprises and institutions that are crucial to achieve an effective innovative process on the national level.
In the human capital aspect, the agenda includes technology forecasting, academic capabilities, and addressing “brain drain” or the exodus of skilled workers from the Philippines to other countries. The industry aspect covers private sector partnership, best practices comparison and public management. Under the public policy aspect, areas that need to be addressed are sharing of experiences and expertise in government offices, and performance assessment and certifications.
“Filipinnovation” is the catchword of the recently held Philippine National Innovation Summit, which was organized by the Department of Science and Technology (DOST), IBM, Asian Institute of Management’s Policy Center and the Intellectual Property Office, in cooperation with other private organizations and government agencies. Not only does the new word show the natural innovativeness of Filipinos in wordplay, but more importantly it captures the soul of the Philippines’ national innovation strategy – that we Filipinos need to embrace innovation as a way of life in order to stay competitive in the global economy.
Presenting a framework for focusing energies
The summit is laudable as it was able to cover three major aspects of the national innovation strategy - human capital, industry and public policy - each one having specific directives. This will serve as a road map for the stakeholders in the Philippines’ National Innovation System. A national innovation system (NIS) is the flow of technology and information among people, enterprises and institutions that are crucial to achieve an effective innovative process on the national level.
In the human capital aspect, the agenda includes technology forecasting, academic capabilities, and addressing “brain drain” or the exodus of skilled workers from the Philippines to other countries. The industry aspect covers private sector partnership, best practices comparison and public management. Under the public policy aspect, areas that need to be addressed are sharing of experiences and expertise in government offices, and performance assessment and certifications.
Such elements in the NIS serve as a framework for which to focus our energies on as a country in drawing up implementing guidelines and tactics to truly realize the vision of Filipinnovation.
Hence, a follow through of the innovation summit is requisite. But the key questions that need to be asked and answered are: In what areas do we innovate, products and/or services or process? Do we focus on radical innovations or incremental ones? In what industries or sectors do we focus?
Approaching innovation differently
Such questions are relevant because, as a developing country, we need to approach innovation unlike developed economies. This is the thesis put forward by Professor Charles Edquist of Linköping University, Sweden for the UNIDO World Industrial Development Report in 2001.
Take the aspect of product and/or service versus process innovation. Product innovations may be goods or services - it is a matter of what is being produced. On the other hand, process innovations may be technological or organizational and it concerns how goods and services are produced. As an example, an industrial robot is a product when it is produced and a part of the process when it is utilized in production.
Edquist argues that product or service innovations are more important for developing countries because these are the main mechanism behind changes in the production structure. In other words, the vision and creation of a new product or service will ultimately lead to changing the mode of creating the product. Therefore, a developing country will benefit from the domestic and international consumption of a new product as well as from the new ways of producing these products, which may lead to productivity and efficiency gains; thus, a doubly positive impact to the firm.
One good example is the Filipino innovation – the electronic load. This service, pioneered by Smart Communications, is a way of “loading” one’s cellphone with credits via texting a purchased code to the telco service provider. This service has revolutionized the way a telco service is produced and distributed, eliminating costly physical distribution infrastructure because it is fully electronic.
Another approach that our country can adopt is to focus on incremental innovations rather than radical/breakthrough innovations. The incremental mode involves a step-wise approach of gradually improving existing products or processes. This is a much easier path for developing countries because it entails relatively less investment and faster turnaround of “improved” products.
In the electronic load example, this service has been used by telco service providers in the country to develop other services such as those in money transfers, mobile commerce, and the like.
Another aspect that needs to be considered on a country level is in what industries or sectors do we focus our innovation efforts. This is relevant because no single country provides the optimal mode of innovative competitiveness in every industry. Furthermore, there are differences in the relative innovative capabilities between industries, as this is function of the distinctive technological capability of each industry.
This is exemplified by the strong innovation systems of Japan in automobiles, the United Sates and other countries in information technology, and India in the business process outsourcing sector.
Focusing on our strength
So in what sectors do we, as a country focus? One obvious strength of Filipinos is in the creative industries. Our country is well known globally in many creative industries such as music, arts and dance, crafts, and design. Filipinos are naturally creative as evidenced by the Ifugaos’ widely known Rice Terraces and the “I love you” computer virus created by a Filipino programmer.
A growing industry that uses the creative talent of Filipinos is the information and communication technology industry. We have witnessed the growth of sectors in the ICT such as animation, gaming and content development and software development. Related to these is our country’s strength in the business process outsourcing sector wherein players can develop “innovative” service offerings to foreign clients that harness our natural creative talents. These include illustrations, editing, photography, screenwriting, creative writing, proofreading, cover design, journalistic writing, graphic design, storyboarding, video editing, instructional design, and music composition.
Underlying all these considerations in the implementation of a national innovation strategy is the importance of the participation of the private sector. Firms are the main drivers of innovation as they are the ones that produce products and services.
But firms do not innovate in isolation. That is why collaboration among various groups – among firms, with customers, suppliers, the government and academic institutions – is crucial to ensure the success of any innovation strategy.
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Reynaldo C. Lugtu, Jr. teaches management and marketing courses in the MBA Program of De La Salle Professional Schools. He may be e-mailed at rlugtu2002@yahoo.com or visit his blog at http://rlugtu.blogspot.com/.
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