Measuring and Examining Innovation in Philippine Business and Industry

Abstract

Innovation involves implementing new or significantly improved goods and services, production processes, marketing, or organizational methods for adding value. The measurement of innovation provides a mechanism for benchmarking national performance, and for examining innovation and its relation to economic growth. Further, examining determinants and bottlenecks to innovation among firms provides inputs to mainstreaming of policies on innovation. In this paper, results of the 2015 Survey of Innovation Activities (SIA), conducted by the Philippine Institute for Development Studies (PIDS), are described and discussed. Survey results suggest that less than half of firms in the country are innovators, with larger-sized firms innovating more than micro, small, and medium establishments (MSMEs). The most innovative behavior among firms in process innovation. Effects of innovation are observed to be largely customer-driven. Firms suggest cost factors to be the most important barrier to innovation. Knowledge and cooperation networks for innovation need strengthening. Government support and its role on innovation is also limited. Firms hardly access technical assistance from government and research institutions. Cooperation of firms on innovation activities with academe is also limited. Firms cooperate more internally with establishments within their enterprise, their customers and suppliers. Government needs to have a champion for developing stronger policies and interventions to support and encourage innovation. It is also important to improve information dissemination on public programs available to assist firms in innovating. Networking, linkages, and collaboration among the government, industry associations, and universities and research institutions also require further enhancement.