A RECENT survey of 500 business firms concerning their efforts at innovation confirmed what we in the Congressional Commission on Science, Technology and Engineering (Comste) have been calling our government’s attention to: Companies in the country are not averse to innovation, but two main constraints hinder their activities. They lack government support, and the linkages among the government, universities and industry—the three main actors in an innovation system—are weak.

According to the 2009 Survey of Innovation Activities, many establishments in the country are innovation-active. The study disclosed that between 2009 and 2010, more than half (54 percent) of the establishments surveyed have introduced significant improvements to their products and services or the processes behind them, or have engaged in innovation projects, such as R&D and training.

While this is good news, the rest of the statistics in the study are far from satisfactory. First, only a few (21 percent) of the firms surveyed said they received government assistance or support for innovation. Medium and large firms have more access to these services (28.8 percent and 26 percent, respectively) in contrast with micro and small enterprises (both 15 percent).

Second, the survey showed weak linkages among government, universities and industry. Only a third (34.5 percent) of innovation-active firms in the country have cooperation agreements on innovation activities. They often partner with clients, suppliers and other establishments within the enterprise, and are less likely to collaborate with universities and government institutions.

Few establishments consider universities and higher education institutions, as well as the government and public R&D institutes, as important sources of information. Only 10 percent and 7 percent of the firms surveyed rated universities and the government as important information sources, respectively.

Further, many in the industry don’t perceive government support programs as crucial to their innovation activities. Less than 20 percent of the establishments surveyed considered R&D funding, subsidies, and loans and grants important. Roughly a third, on the other hand, said the training, tax rebates, technical support and infrastructure support they receive are essential to innovation.

The survey shows how little we have achieved in creating an environment conducive to innovation, and that we are even doing exactly the opposite of what successful countries in the region have done to leapfrog their way to economic growth.

Taiwan’s experience, for instance, shows that government support is crucial in achieving rapid technological catch-up. The large-scale development of public-research institutes in Taiwan helped small and medium enterprises absorb and assimilate existing technologies that they cannot invest in by themselves. Through its Industrial Technology Research Institute (Itri), Taiwan has facilitated successful public and private partnerships that helped its SMEs become IT industry leaders in the world.

Like Taiwan in the 1970s, the high cost of doing innovation is a big barrier. And like Taiwan back then, we have limited resources for innovation. Facilitating synergy and linkage among the government, industry and universities are thus crucial to a successful commercialization of innovative products and services.

Comste, of which I’m chairman, helped establish the Philippine Industrial R&D Institute (Pirdi), an institute similar to Taiwan’s Itri. Hopefully, Pirdi will be able to do what Itri did for Taiwan: spur the necessary research and development, and link it to industries to produce innovative products and services. We’re also pushing for innovation clusters in the country, a strategy that has been proved invaluable in the success of Taiwan, Korea and Singapore. With the cooperation of the Department of Science and Technology and the Commission on Higher Education, we will be creating five area-based innovation clusters in the country—Algae Research and Commercialization; Disaster Science and Management; ICT for Cloud Computing and Software-as-a-Service; Responsible Mining Technologies; and Precision Farming and Smart Agriculture.

Such a national innovation program will address our inherent weakness in R&D and innovation through the provision of funding to R&D and the promulgation of innovation-friendly policy guidelines.

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