Innovation index: PHL slips, but progress cited

DESPITE scoring better, the Philippines slipped by one notch to 51st rank out of 132 economies in the latest Global Innovation Index (GII) report, amid the challenges posed by Covid-19 and decreasing budget for research and development (R&D), the online launching of the report in the country disclosed on Tuesday.

According to the GII 2021 report prepared by the United Nations’ World Intellectual Property Organization (WIPO), the country scored 35.3, which is an improvement from last year’s 35.19. The current ranking, albeit lower, is better than 54th position in 2019 survey.

The world’s top innovators are Switzerland, Sweden, United States and United Kingdom. South Korea “jumped” to rank 5.

The Philippines ranked fourth among 34 lower middle-income group economies. It is at the bottom half among 17 countries in Southeast Asia, East Asia and Oceania at 11th rank.

However, the country’s GII 2021 performance is still considered “favorable” as it resulted in its inclusion on the list of five countries that made significant progress in the GII in the past years.

It is now in the league of China, Turkey, Vietnam and India, the GII report said.

WIPO noted that the Philippines, along with Turkey, Vietnam and India, is “systematically catching up” in the past decade, having jumped from 91st to 51st rank.

“It is challenging for emerging economies to consistently improve their innovation performance and systems to match high-income, more prosperous economies. Only a limited number of middle-income economies have managed to catch up in innovation, by complementing successful domestic innovation with international technology transfer,” the report said.

Along with Vietnam in the region, the Philippines was tagged as a “world leader” in high-technology exports. Electronics have been a key driver for the country’s export revenues, comprising over 60 percent of the total outbound shipments.

The Philippines also registered better performance for innovation outputs compared to innovation inputs.

“This means that we were able to produce more and higher-quality innovation outputs despite our limited innovation resources and pandemic-induced setbacks,” Trade Secretary Ramon Lopez said in an event on Tuesday. “This is reflected in the GII observation that the Philippines continues to be among the countries that perform above expectations given our current level of development.”

Lopez said the Department of Trade and Industry has been implementing its Inclusive Innovation Industrial Strategy, which highlights the importance of innovation to boost competitiveness. The initiative is expected to prepare the country is at navigates the Fourth Industrial Revolution.

“We have seen that with the right collaborators, our country’s entrepreneurial and innovative people can boost and optimize their discovery potential and serve as a primary engine of economic development especially amidst the Fourth Industrial Revolution,” Lopez said, adding that doing so will bring about new business ventures and generate more job opportunities.

‘Over-performing’

With the Philippines’s “consistent increase” in ranking over the decades, it is “still over-performing, and this is a recent phenomenon relative to its level of development. So please keep this up,” Dr. Sacha Wunsch-Vincent of WIPO said in his report of the outcome of the study at the webinar.

Wunsch-Vincent added that if the five Asian countries continue their upward trajectory in a decade, they “will change the innovation landscape.”

80 indicators

Using 80 indicators, the GII ranks the countries based on their innovation capabilities.

The GII is published yearly by the World Intellectual Property Organization (WIPO), an agency of the United Nations.

“The Philippines continues to lead by example to other developing countries in setting innovation as a national priority,” said WIPO Assistant Director General Marco Aleman in a recorded message at the online event.

“The entry into force of the 2019 Philippine Innovation Act proposing the GII as a measurement and assessment tool of the innovation performance of the country is the clearest example of the Philippine government’s effort to foster innovation in the economy,” Aleman added.

Science Secretary Fortunato T. de la Peña said, “Now, more than ever, the Filipino people are looking up to science, technology and innovation for solutions to their problems.”

“The demand drives the [Department of Science and Technology] further to continuously support our researchers, scientists and engineers, and the aspiring ones,” de la Peña said at an online news conference that was attended by government interagency officials.

Innovation input vs output

It should be noted that the innovation input or the investments for research, development and innovation (RDI) in the Philippines remain “low” in the last three years.

This made its input ranking slip two notches to 72 compared from rank 70 in 2020, and rank 76 in 2019, the report said.

Conversely, the Philippines is at rank 40 in 2021, a step higher from the 41st rank in 2020 in innovation outputs, or the resulting programs and technologies despite the low input.

Weak points

Wunsch-Vincent said the country’s knowledge and technology outputs “performed strongly,” which is partly linked to its “strong role” in information, communication and technology sector, and other assembly factors.

However, he advised the Philippines to increase its domestic capacity so that its economy would not suffer when a similar pandemic strikes.

“We have learned that if a pandemic strikes, global value chains collapse. Suddenly you were left with nothing for a while in terms of economic activity [at the start of the pandemic in 2020], so it is best to build this domestic innovation capacity,” he said.

He said the country’s “weakest sector” is its “market sophistication,” particularly in financial innovation and infrastructure in institutions, which have not changed.

He added that the entrepreneur environment is “still relatively weak.”

“We encourage [the country’s officials] to check this out. And make improvements in human capital and education,” he said.

On intellectual property (IP), Wunsch-Vincent noted progress in patent and trademark filings. But this could be reinforced with great work in the government’s IP office and relevant departments to work out until the first half 2022 ways to improve the usage of IP.

R&D budget

The country’s R&D budget since 2007 has dramatically increased and averaged about 0.65 percent of the national budget.

However, the share of R&D in the national budget in the last two years significantly decreased from 0.76 percent in 2019 to 0.39 percent in 2021.

Science Undersecretary for R&D Rowena Cristina L. Guevara said: “Our country’s modest investments in R&D can only go so far.”

As an initiative to sustain innovation efforts, the DOST is lobbying for the passage of the Science for Change Program (S4CP) bill.

“Approval of the [S4CP] bill would mean the continuation of the inclusive, equitable and sustained efforts for innovation, given the optimal use of our resources for R&D,” Guevara said at the online event.

She believes that despite slipping one step from the country’s upward GII trajectory since 2014, “we are still an innovation overachiever—delivering far more than is expected.

“We are truly an efficient innovator and I believe the pandemic has emphasized this characteristic of the Filipino—efficient Filipinnovation… Madiskarte talaga ang Pilipino [Filipinos are innately creative],” Guevara said.

She noted that even though the Philippines performed above the regional average in the two pillars of Business sophistication and Knowledge and Technology outputs, “these were not maximized due to our weaknesses in investments and credit.

To sustain innovation efforts, the DOST is lobbying for the passage of the Science for Change Program (S4CP) bill that was approved on second reading in the House of Representatives and is pending in the S&T Committee in Senate.

With the challenges presented by the pandemic, the bill seeks to address disparity in R&D funding in the regions and lack of R&D in the private sector, Guevara explained.

“Our goal is to put the Philippines within the United Nations Educational, Scientific and Cultural Organization benchmark for a developing country budget of 1 percent GDP Expenditure on R&D,” she said.

DOST’s experience

De la Peña said the pandemic has brought negative impacts in the implementation of the country’s science, technology and innovation activities, owing to the lockdown and the constraints in mobility that “limited our capabilities to continue the R&D initiatives.”

However, the DOST became flexible and has adopted timely strategies, enabling the country to respond to the situation at hand.

It focused its initiatives on R&D programs and projects that are extremely useful in this time of the pandemic like the development of diagnostic or test kits, biomedical devices, disease modelling and surveillance applications, heightened initiatives on food security and strengthened its collaboration with stakeholders that allowed value adding activities to ensure food resiliency in the new normal.

The pandemic also led to the speeding up of health research and development. The DOST’s Tuklas Lunas Program provided support to drug discovery and development, and to the soon-to-be established Virology and Vaccine Institute of the Philippines.

“Very soon, I hope, the Philippines would be able to develop its own brand of vaccines for use of the Filipinos and other nations as well,” de la Peña said.

The online news conference was also attended by secretaries and undersecretaries from the Departments of Trade and Industry; Information and Communication Technology; Health; National Defence; Agriculture; Energy; and Transportation; Commission on Higher Education; National Economic and Development Authority; and the IP Office of the Philippines, among others, who presented their respective innovations.

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