[Acknowledgements]
Ladies and gentlemen, magandang hapon po sa inyong lahat.
The COVID-19 pandemic has shown how resiliency is essential for enterprises and the national economy.
At the height of the onset of the pandemic in the 2nd quarter of this year, majority of businesses stopped operations as we urgently needed to contain the spread of the virus. By the 3rd quarter, around a quarter of total businesses in the country closed their operations, 50% were in partial operation, and the remaining quarter were operating at full capacity. At present, we are further increasing the allowable enterprises and their operating capacity, so all businesses can get back in the market and intensify our economic recovery.
Despite the restrictions put in place and the limitations to public gatherings and movement in public places, our enterprises found innovative ways to thrive amidst the pandemic. Many made the transition to e-commerce. As of this quarter, online business registration has exceeded 80,000 from just less than 2,000 in the 1st quarter of this year.
On-demand service delivery is also booming, with various apps and platforms providing tele-services – like grocery, food, medicine delivery, and health consultation – in various parts of the country. Even in our household I received almost everything deliveries from various e-commerce apps and sites. Teleworking has also become a viable option for many businesses to continue their operations without the need for employees to be physically present in their offices.
For the industrial sector that require workers to be present in factories and production areas, health and safety protocols have been implemented DOLE-DTI issued such workplace protocols. Adjustments to manufacturing operations have also been made to achieve a balance between health and livelihood.
As in the past, when we were battered by numerous typhoons, earthquakes, and other natural disasters, we have demonstrated our resiliency in the face of adversity.
Our experience during the pandemic has driven home a major imperative for our times: we need to embrace digital transformation. The increased adoption and utilization of advanced digital technologies will be our means to recovery, stronger economic growth, and sustained national competitiveness in the years ahead.
A study commissioned by Cisco Systems reveals that we can increase our annual domestic output by at least US$26 billion to US$28 billion by 2024 through the digitalization of our small and medium enterprises. The 2020 Asia-Pacific Small and Medium Business Digital Maturity Study notes that our SMEs are prioritizing customer experience, service delivery, and marketing and sales in their digitalization journey. They are also mostly employing artificial intelligence, analytics, and cloud technologies for improving these business operations.
In the World Bank’s report on our digital economy, they affirm that fostering innovation and improving the business environment in the country will be critical in speeding up our recovery and mitigating the adverse impact of the pandemic. The Philippine Digital Economy Report 2020 notes that the use of digital technologies, such as digital payments, e-commerce, telemedicine, and online education, is rising in the country. This has also helped individuals, businesses, and government observe public health and safety protocols while ensuring business continuity and the delivery of public services. However, the Report stresses that we need to address the country’s “digital divide” if we are to enhance our resiliency and generate more economic opportunities for our people.
How, then, are we responding to the need for economic resilience and the imperatives of digital transformation? Our answer is our version of Bayanihan for inclusive innovation or Filipinnovation. Science and Technology Secretary Fortunato De La Peña puts it succinctly when he defines Filipinnovation as not just a whole-of-government, but a whole-of-society approach. This approach to inclusive innovation ensures policy coherence, alignment of priorities, and effective coordination and delivery of government programs and services.
Filipinnovation is essential in our Inclusive Innovation Industrial Strategy (or i3S). As the Department of Trade and Industry (DTI) aims to grow globally innovative and competitive manufacturing, agribusiness, and services industries, we rely on the strong collaboration between and among government, industry, and the academe at the national and regional levels. This will bridge the gaps in our innovation and entrepreneurship ecosystems, improve the environment for the growth of our firms and industries, and prepare our people and enterprises for the demands of the economy of the future.
The latest edition of the Global Innovation Index (GII) validates Filipinnovation. For the first time ever, the Philippines has reached the top 50 of the annual ranking of 131 countries in terms of their innovation performance. At 50th in 2020, this is 4 notches higher from last year’s ranking and a significant accomplishment considering that the country was ranked at 100th place in 2014.
The GII further recognizes the Philippines as an “innovation achiever” for the second year in a row. This means that the country has been outperforming peer economies in the East and Southeast Asian regions.
Among the GII’s seven pillars, the country’s rankings significantly increased in four: market sophistication; business sophistication; knowledge & technology outputs; and creative outputs. It identifies the following indicators as the Philippines’s strengths: e-participation; trade, competition and market scale; firms offering formal training; knowledge absorption; high-tech imports; utility models by origin; productivity growth; knowledge diffusion; high-tech net exports; ICT services exports; and creative goods exports.
Nonetheless, we have much to do in terms of pushing our performance in the institutions, human capital and research, and infrastructure pillars of the GII so that we can rank higher in the coming years. Improvements in these pillars take time and more investment, which various concerned agencies are continuously working on.
In order to strengthen the country’s national innovation and entrepreneurship ecosystem, the following factors are crucial: reliable and robust internet connectivity and digital infrastructure; digitalized ease of doing business and electronic delivery of government service; higher education institutions training aspiring innovative entrepreneurs and continuously engaging industry; conducting market-driven research and commercializing technologies which is what DTI and DICT collaborating on; promoting and protecting intellectual property rights; and the business sector investing more in R&D and the skills training of their workers. Updates in these areas will be provided by our guest panelists this afternoon.
While the pandemic might have disrupted our efforts and tempered our country’s progress, we are adapting to changing conditions. Moreover, we are finding ways and moving forward with a firmer commitment to fostering inclusive innovation.
We have the manufacturing repurposing program in DTI and the Board of Investment (BOI). It was initiated in response to the pandemic. Consistent with i3S, government partnered with our enterprises in the garments, textile, electronics, aerospace, chemicals, plastics, and beverage industries. These enterprises helped us in the production of urgently needed personal protective and critical care equipment and supplies. Our local companies, such as the members of the Confederation of Wearable Exporters of the Philippines (CONWEP), made adjustments in their factories and repurposed some of their equipment and operations. Meanwhile, other partners from the transport and logistics sector provided support in the sourcing and the delivery of raw materials and final products.
We are also aiming for greater inclusion through another project supported by the UNDP Philippines. This is the Enhanced Manufacturing of Protective Wear and Equipment for COVID-19 Response in the Philippines (or EMPOWER PH) Project.
EMPOWER PH seeks to gather suppliers, manufacturers, and even buyers and consumers of medical and non-medical grade PPEs on a common electronic platform. This initiative would facilitate the production of these medical supplies while sustaining the livelihood of participating Micro SMEs.
The development of the platform has been done in consultation with concerned government agencies, like the Department of Health (DOH), the Food and Drug Administration (FDA), and the Department of Science and Technology (DOST). We will also have the technical support of experts from the private sector. We will be launching the EMPOWER platform next month.
Our Regional Inclusive Innovation Centers (RIICs) in the pilot regions of Bicol, Central Visayas, Northern Mindanao, and Southern Mindanao continue to foster the collaboration among regional stakeholders from government, industry, and academe. These are a network of innovation agents that collaborate in order to commercialize market-oriented research towards competitiveness in the regions. It is a government initiative in cooperation with the industry and the academe to generate employment opportunities, entrepreneurial activities, and sustain economic prosperity in the country’s regions.
To date, with technical assistance from the USAID Science, Technology, Research and Innovation for Development (STRIDE) Program, over 60 MSMEs across these RIICs are substantively engaged with other local partners. These cover initiatives such as research partnerships with a local State University or College (SUC), technology deployment in the market, and product development. Some of these engagements have translated into formal proposals for funding from DOST. Others have qualified for local grants-in-aid and a number are being funded by the firms themselves.
For instance, in Northern Mindanao, they have the Optimizing Regional Opportunities for Business Excellence through Science, Technology, and Innovation (OROBEST) Innovation Program, that is in the area of Cagayan de Oro. Meanwhile, in Southern Mindanao, they have their Innovation through Science & Technology and Risk Resilient-based Initiatives towards the Knowledge Economy (or i-STRIKE Davao). These programs facilitate the gathering of innovation agents and mobilize them to work collaboratively towards their shared aspirations for their region.
With the positive developments in our experience with the pilot RIICs, we are moving forward with replicating this initiative in other regions in the coming months, including in Cagayan Valley, up north in Central Luzon, Calabarzon, and Zamboanga. We are glad to see this effort is receiving support from the regions’ business groups and MSMEs, local SUCs, and regional offices of national agencies.
On industry transformation with regard to our programs to promote the adoption of Industry 4.0 technologies among MSMEs and large enterprises, we are moving forward with our partnership with Siemens to drive the digital transformation of the country’s industrial sector.
This collaboration includes the utilization of the Smart Industry Readiness Index (SIRI) to assess the digital readiness of enterprises and the development of a digital transformation roadmap for selected firms.
Supplementing our partnership with Siemens is our project with UNIDO called the “Leveraging the Fourth Industrial Revolution (4IR) Technologies and Business Models for Inclusive and Sustainable Industrial Development (ISID) in the Philippines” (or Leveraging 4IR Project). One of the components of this project is conducting a feasibility study for the establishment of an Industry 4.0 Pilot Factory in the country. An Industry 4.0 SME Academy will complement the pilot factory by providing relevant training and capacity-building activities.
Aside from the implementation of these projects that would facilitate the digital transformation of local enterprises, we are also in the midst of formulating an Artificial Intelligence (AI) Roadmap for Industry. This Roadmap will cover the agribusiness, manufacturing, and services industries, and will have five key dimensions: regulation, research, skilling, adoption, and international collaboration. A number of interviews, consultations, and focused group discussions (FGDs) with stakeholders from government, industry, and the academe are being conducted across the country. We hope to implement the Roadmap by next year 2021.
Lastly, we are in the process of developing our own Philippine Skills Framework to reskill and upskill our workers so as to better prepare them for Industry 4.0 technologies, including AI. We are doing this in cooperation with SkillsFuture Singapore and in collaboration with Technical Education and Skills Development Authority (TESDA), the Department of Labor and Employment (DOLE), and other concerned agencies. Among the priority sectors for the development of the skills frameworks are manufacturing, construction, logistics and supply chain, health and wellness and the like.
Moving on to the development of our startup ecosystem, we are lining up a number of programs to support the growth of local startup enterprises.
We will soon implement the Strategic MSMLE and Startup Link (or SMART Link) project to match startups with commercially-viable products to Micro MSMEs, including large enterprises. The project enables the startup to grow while at the same time facilitating the digital transformation of enterprises.
We are also devising what we are calling as StartupAID, or Startup Acceleration and Innovation with DTI.
For selected startups, we are preparing a Global Acceleration Program (GAP) that aims to help accelerate the growth of viable technological startups by immersing them in the global ecosystem.
At present, while the pandemic limits travel and public gatherings in person, we have also been holding virtual meetups and events such as these. These are being done in collaboration with foreign missions in the country as well as with our Philippine Trade and Investment Centers (PTIC) worldwide. These are the foreign trade service corps.
In addition to our IRIS program, we are also taking on the development of the country’s creative industries. Considering the abundance of talent and creativity of our people, we believe that with support and cooperation from stakeholders, the creative industries can be a significant growth driver of the economy.
The potential of the creative sector has been highlighted under the pandemic. The prolonged lockdowns and quarantine restrictions increased the demand for entertainment online. This provided an opportunity for the film, animation, game development, and even software development sectors.
The increasing demand for high-quality distance learning solutions also provides opportunities to expand our creative services to help improve the distance learning experience. These can range from the creation of learning modules and materials, to building the actual platforms for the delivery of lessons.
As such, we envision our creative industries to thrive amidst digitalization and contribute to the post-pandemic recovery.However, this will rely heavily on their ability to constantly discover, integrate, and scale up technologies to cope up with the ongoing shift to convenient, consumer-centric consumption patterns.
To provide strategic direction for our creative industries, we are partnering with stakeholders in government and from industry to advance the creative economy agenda and develop a Creative Economy Roadmap. I must make special mention to the Congress for congressional efforts led by Congressman Toff De Venicia for making a very active role in this creative sector. Among the projects we plan to carry out include a capacity-accelerating program for performers and entertainers, establishing shared digital services facilities, and developing creative services special zones.
Innovation is key to entrepreneurship or what I will say is core to entrepreneurship as it enhances firm, industry, and national competitiveness and points of differentiation. Advancing Filipinnovation will be indispensable for achieving industrial resilience, inclusive growth, and sustainable development in our country.
More importantly, by promoting innovation and enhancing the competitiveness of the businesses, we can generate more jobs and employment as well as attract more investments to create a virtuous cycle in the country. This, in turn, will realize the dream of President Rodrigo Roa Duterte of giving a better quality of life, more comfortable life for our people even as we build a more inclusive nation in the post-COVID future.
Maraming salamat po at mabuhay tayong lahat. ♦
Date of Release: 22 October 2020