The Philippines’ innovation system at a glance
Over the past decade, the Philippines has been growing not just economically but also in terms of its infrastructure, largely down to growth in the country’s information, technology and communications (ICT) offshoring industry.
The country’s average GDP growth of 6.8 per cent (which has held steady for several years) has been boosted by income from workers in the diaspora, and less by organic growth through innovation. The Philippines indeed has one of the world’s largest overseas populations; as of 2019, more than 12 million Filippinos were living abroad. However, spending on research and development in recent years is reported to be less than 0.2 per cent of GDP.
R&D output in the Philippines is hampered by a lack of facilities in its various research institutions. Many technologies rely on government funding to be developed, yet funding (including governmental) is lacking when it comes to scaling these technologies. The low level of angel investment in the Philippines can partly be attributed to a lack of stories of successful entrepreneurial developments, and insufficient focus on educating people on how to invest in innovation.
Another issue is that most local firms import mature technologies from other countries, lacking either the inclination or skillset (or both) to master or reverse engineer the imported technology for new, indigenous technology developments.
A 2013 study by the Philippines’ Commission on Higher Education (CHED) reported that only 17 per cent of undergraduates take courses in STEAM (‘Science, Technology, Engineering, Arts, and Management’) programmes, while just 9 per cent of postgraduate students choose STEAM courses, leading to few skilled innovators to teach these programmes. Just 12 per cent of STEAM faculty have doctorate degrees.
Nonetheless, over the last few years, there has been a rise in startup activity around the two prominent investing groups: Kickstart and Ideaspace. They provide mid-range investment to help budding startups grow, however their portfolio of investments is relatively niche: funding was initially focused on telecommunications technologies, with investments only recently expanding into other ventures.
It is also worth noting that on April 17, 2019, the Government of the Philippines enacted the Republic Act (RA) No. 11293, otherwise known as the 'Philippine Innovation Act' (the 'Act'), which has the objective to foster innovation in the country as a vital component of national development and sustainable economic growth.