The country’s chief economist has underscored the need for local businesses to innovate, as the Philippines builds its science, technology and innovation (STI) ecosystem in a bid to harness the opportunities brought by the Industry 4.0.
“Technological disruptions have reached our shores for some time now. While Industry 4.0 technologies will drive the Philippine industries forward, any significant digital transformation will require new business models and workforce re-skilling,” Socioeconomic Planning Secretary Ernesto Pernia said during the recent inclusive innovation conference.
Pernia cited key legislations that have recently been enacted that will provide “further impetus” to the establishment of the STI ecosystem, including the Philippine Innovation Act and the Philippine Innovation Start-up Act.
The latter law aimed to create opportunities for entrepreneurs with innovative ideas to gain access to capacity building, exchange programs, and link them to potential investors, collaborators and markets, both local and overseas.
Pernia, Director-General of the National Economic and Development Authority (NEDA), said the government also anticipated a scaling up of Regional Inclusive Innovation Centers (RIICs) across the regions, apart from those already established in four pilot cities –Bicol, Cebu, Cagayan de Oro and Davao.
“By providing physical infrastructure, and critical support, such as access to venture financing, these centers will hopefully extend practical support to our start-ups,” he said.
In terms of making businesses more innovative, the NEDA chief cited the 2015 Survey on Innovation Activities conducted by the Philippine Institute for Development Studies (PIDS) indicating that large establishments were more inclined to conduct activities that would improve products or enhance their operations and systems.
This includes embarking on daring projects that disturb the status quo and investing in research and development (R&D).
Pernia said the study, however, pointed out that small firms hardly access technical assistance from the government and research institutions.
“This is something that both the government and the private sector can work on given that we share the same goals,” he added.
He further stressed the need to improve the country’s overall digital adoption, noting the potential for e-commerce in the country is “high”.
However, Pernia said online participation of both business and consumers is hampered by digital connectivity problems.
He said the high cost of broadband and internet services explains the low business density in the digital space and untapped potential for enhanced consumer participation.
“What we need is to establish secure infostructure (or information infrastructure), and strengthen our critical support services by bringing logistics costs down. Emerging technologies will be needed to relevantly situate our country in the ever competitive global value chain,” he added.