Innovation: Key for economic recovery
Innovation will be at the center of the coronavirus disease outbreak recovery and to also stimulate competitiveness in the Philippines
Innovation is the key for Filipino companies to overcome economic downturn due to the pandemic, and boost export sophistication and competitiveness.
“Innovation will be at the center of the coronavirus disease outbreak recovery and to also stimulate competitiveness in the Philippines,” said Jaime Frias, senior economist at the World Bank.
He said that even before the Covid outbreak, the Philippines has been unable to leverage the full benefits of global value chains or GVC.
“Per capita GDP (gross domestic product) is low relative to the sophistication of its exports, suggesting that leveraging of the full benefits of GVC participation was below potential,” Frias explained.
Citing the result of an earlier study, he said absence of substantive innovation seems to be limiting the country’s potential for upgrading GVC participation.
Product innovation
“Absence of substantive ‘product innovation’ seems to correlate with Philippines’ relative specialization in low value-added manufacturing,” he said.
“Process innovation is the primary way of innovation for Philippines’ supplying firms, with little or no product level innovation,” he added.
According to Frias, most manufacturing exporters depend on external sources of knowledge for innovation.
“There is an opportunity of course to increase the competitiveness of exports. Typically, this is driven by the
lack of awareness in terms of the opportunity by firms so there is an issue about what is feasible,” he said.
According to him, important innovation policy pertains to absorption or building technological capacity of firms.
“Vast range of policies — some relates to the extension and the absorption that usually would include technology extension services or business advisory services, technology centers, universities and knowledge providers,” he added.