Innovation-driven growth

Our Asian neighbors used to come to the Philippines to acquire a wide range of skills, from English proficiency to producing high-yield rice and constructing public works infrastructure.

The high level of development of the Philippines was surely among the reasons why the Asian Development Bank decided, over three rounds of voting from November to December 1965, to set up its headquarters in the Philippines instead of in Japan, the main proponent of the creation of the ADB. (The Philippines edged out Japan by one vote.) Manila also bested the other contenders: Bangkok, Colombo, Kabul, Kuala Lumpur, Phnom Penh, Singapore and Tehran.

So it’s disheartening to see our country lagging behind most of its Asian peers in this year’s Global Innovation Index. Faced with the challenges of the COVID pandemic, the Philippines fell by eight notches in the 15th edition of the GII, which is drawn up by the World Intellectual Property Organization. The WIPO focused on the future of innovation-driven growth in the time of COVID (and now the Russia-Ukraine war). I guess the Philippines’ StaySafe PH and ayuda weren’t innovative enough.

By region, South Korea at sixth place overall is now ranked as the most innovative economy in Southeast Asia, East Asia and Oceania, with Singapore (seventh place) and China (11th) rounding out the top three. (In movies / TV series alone plus IT gadgets and household electronics, I fully agree with South Korea’s ranking.)

By income groups, China, Bulgaria and Malaysia (36th overall) are the highest ranked among the upper-middle income economies. Among the lower middle-income including the Philippines, the top three are India (40th), Vietnam (48th) and Iran (53rd).

Thailand, classified as upper middle-income, was also ranked ahead of the Philippines at 43rd place. At 59th place among 132 economies, at least we were ranked ahead of Indonesia, which placed 75th. But Indonesia now belongs to the Group of 20 largest economies and currently holds its rotating chair. In 1976, the Association of Southeast Asian Nations also chose Jakarta for the headquarters of the ASEAN secretariat.

Never mind Singapore and the tigers of Northeast Asia; how did Thailand and Vietnam overtake us in innovation? These days we regularly import massive amounts of rice from them, with the prices cheaper than comparable varieties produced locally.

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Many reasons have been put forward by players in the different sectors of agriculture to explain why domestic production of basic commodities from rice to sugar to salt and onions is disappointingly low.

But there has been little emphasis on the weak capability to innovate and harness technology to boost agricultural production and make agrarian reform work to lift peasants from poverty.

Industry players complain that we lack an accurate inventory of agricultural production and other relevant data. In other countries, drones are being used to monitor farms, record relevant data to enhance production and maintain accurate inventories of various crops.

We need not import drones for such uses. Filipinos have developed satellites; surely there are Filipinos who can develop drones for agricultural and industrial uses.

In our country, a pest infestation can decimate many adjacent trees. The entire tree is also treated with pesticide in amounts based on guesswork, which also risks killing the tree. Again citing my favorite innovators, the Israelis, they developed a device with smart sensors. It is attached to a tree for precise and early detection and extermination of the pest before it can destroy the tree.

New Science Secretary Renato Solidum, better known for his expertise in seismology, has said he wants to provide more government support for innovators and start-ups in science, technology, engineering and mathematics. Let’s hope he gets the needed resources and political support for this.

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One problem is that our culture does not reward innovation. Funding access – a critical component for R&D and start-ups – can be complicated by the lack of confidence among lenders in the viability of out-of-the-box products and services. There is no tradition in our country for venture capitalists and angel investors.

Instead what is rewarded is herd mentality, copycat mentality, conformity and going with the flow. It can be tougher if the boat an innovator is inadvertently rocking with his new ideas is controlled by the influential and well connected.

The rent seekers are strongly resistant to change; they want to preserve the status quo that benefits them, including keeping the majority undereducated and below the poverty line to sustain dependence on patronage that keeps political clans in power.

This mindset has retarded many aspects of national life, from agricultural production to public education, entrepreneurship and culture.

The same mindset has undermined efforts to use technology to cut red tape, reduce graft and boost efficiency in the bureaucracy.

In drawing up the GII, the WIPO puts emphasis on the importance of innovation for growth, especially as the world emerges from the COVID pandemic and faces new challenges.

Our innovation ecosystem, sadly, has been in the ICU even before the pandemic.

Perhaps being left behind by our Southeast Asian peers will galvanize us into action to push innovation.