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Roger D. Posadas, Ph.D.**
Good morning, distinguished officers and personnel, ladies and gentlemen of the Philippine Navy and other branches of the AFP. I would like to express my appreciation to the Philippine Navy through its Center for Naval Leadership and Excellence for inviting to give a talk during the Eighth Leg of the Philippine Navy’s Governance Forum Series. It is truly a distinct honor and privilege to be able to talk to some of the top brass of the AFP on an advocacy that I have been writing and lecturing about for thirty years now – the need for technonationalism and technology management for building a rich Philippine nation and a strong Armed Forces of the Philippines.
* Invited talk delivered on 09 November 2012 for the Ninth Leg of the Philippine Navy’s Governance Forum Series under the auspices of the Center for Naval Leadership and Excellence, Philippine Navy.
** Professor of Technology Management, Technology Management Center, University of the Philippines-Diliman, Quezon City.
It has become a consensus that the Philippines was second only to Japan in East Asia in industrial, technological, and economic development in the 1950s. Since then, however, the Philippines has been overtaken by its neighbors in East Asia with the exception of Vietnam, Myanmar, Laos, and Cambodia.
So why has the Philippines been left behind by its East Asian neighbors? Why has the country remained underdeveloped scientifically, technologically,
economically, and militarily? Why has it failed to become a newly industrialized country like South Korea, Taiwan, and China up to now? Why has the Philippines
ended up as a “poor nation with a weak military”? Is it because our country has been implementing protectionist, nationalist policies for too long and has failed to adopt open, liberal policies soon enough, as most mainstream liberal economists have been declaring? Or is it because our country has failed to emulate the East Asian model of technonationalist catch-up industrialization as exemplified by the economic miracles of Japan, South Korea, Taiwan, and China? In this talk I will try to explain why the Philippines has remained backward and dependent scientifically, technologically, economically, and militarily up to now and what must be done to enable our country to catch up scientifically, technologically, economically, and militarily. Section 2 first gives a brief overview of the extent to which the Philippines has been left behind in terms of per capita GDP from 1950 to 2008. Then Section 3 presents an updated review of the weak and dependent state of Philippine technological capabilities. Next Section 4 traces the colonial-cultural roots of Philippine underdevelopment by contrasting Filipino attitude toward Western technology with Japanese and other East Asian attitudes. Then Section 5 discusses how Philippine underdevelopment has been given economic ideological reinforcement by the liberal economic ideology and technoliberal thinking that have
held sway in our country since 1986. Section 6 then discusses how the technoliberal policies of successive Philippine governments have entrapped our economy in a vicious circle of technological laggardness and dependence. Then Section 7 proposes a way out of this vicious circle through the pursuit of a "technonationalist, catch-up oriented", and "capability-based” approach that draws from the successful national catch-up experiences of East Asian newly industrialized countries and seeks to achieve rapid national economic and technological catch-up for the purpose of transforming our country into a rich nation with a strong military. Next Section 8 explains how this technonationalist approach can be successfully implemented through the use of technology management. Finally, Section 9 will close my talk with some concluding remarks. 2. Overview of the Extent to Which the Philippines Has Been Left Behind Based on GDP per capita (PPP dollars), the Philippines was actually No. 4 in 1950 among East Asian countries, ranking below Singapore, Japan, and Malaysia as shown in Table 1. Nevertheless, in 1950 the per capita GDP of the Philippines was slightly higher than those of South Korea and Taiwan, about 1.5 times those of Thailand and Indonesia, and more than 2.5 times that of China. The Philippines, however, was overtaken by Taiwan in 1960, by South Korea in late 1960s, by Thailand in the early 1980s, by Indonesia in the late 1990s, and by China in 2000, and it is about to be overtaken in the next five years by Vietnam as indicated in Table 1 and shown dramatically in Figure 1. These facts and figures cannot be disputed; they imply very clearly that there is something drastically wrong with the development strategies and economic policies of the Philippine government. Since there is now a consensus that
economic development is a catch-up process and that catching up requires building up technological capabilities, it follows that the Philippine economy has been left behind because it has failed to upgrade its technological capabilities to globally competitive standards. So we now examine the technological capabilities of the Philippines.
TABLE 1: THE GROWTH IN GDP PER CAPITA BY PPP$ OF THE PHILIPPINES AND OF ITS NEIGHBORS
Country Singapore Japan Taiwan Korea, Rep. Malaysia Thailand China Indonesia Philippines Vietnam 1950 3,533 2,645 1,064 1,054 1,940 712 418 704 1,149 579 1960 3,426 5,489 1,679 1,513 1,904 940 592 834 1,584 696 1970 6,994 13,375 3,300 2,674 2,587 1,477 665 986 1,893 641 1980 14,104 18,488 6,995 5,076 4,550 2,227 868 1,549 2,549 660 1990 23,143 25,870 13,361 10,739 6,386 4,039 1,465 2,097 2,386 894 2000 2008
36,835 45,295 28,559 31,823 23,094 28,560 17,543 23,824 10,161 12,794 5,578 2,564 2,715 2,598 1,577 7,776 5,520 3,708 3,279 2,576
3. Overview of Philippine Technological Capabilities The extent of technological development of a firm, industry, or country can be gauged in terms of two dimensions:
1. Technological Capability -- the level of technological skills and know-how of a firm, industry, or country 2. Technological Sophistication – measure of proximity to the state-of –the-art of the key technologies being used by a firm, industry, or country.
Taiwan Korea, Rep. Malaysia
Thailand China Indonesia
0 1950 1960 1970 1980 1990 2000 2008
Figure 1 Graph of the Growth in GDP per Capita by PPP$ of the Philippines and of its Neighbors
The most important gauge of a firm's, industry's, or country's level of technological competitiveness is its level of technological capability. Depending on what it is capable of doing with products and processes, a firm's technological capability can be identified with one of the rungs in the following ladder of technological capabilities from the lowest to the highest level:
Acquisitional Capability – the ability to assess, select, and acquire appropriate technologies from external sources. Operative Capability – the ability to implement, operationalize, and repair an externally acquired technology. Adaptive Capability – the ability to adapt an external technology to local conditions through the modification of its scale, capacity, inputs, and peripheral components. Integrative or Investment Capability – the ability to assemble a complex technological system or commission a production facility on a self-reliant basis. Duplicative Capability – the ability to reverse engineer and make a duplicate of an externally acquired product or process technology. Improved-Design Capability – the ability to improve the design of an existing product in terms of performance, architecture, or aesthetics without changing the existing technology. Reproductive Capability – the ability to reproduce the core component(s) of an externally acquired product technology. Innovative Capability – the ability to design and commercialize an incremental but significant improvement of the core or basic technology of an existing product or process.
Creative Capability – the ability to create a radically novel, breakthrough technology through endogenous research and development and to commercialize it into a new-to-the-world product or process.
On the other hand, the levels of technological sophistication can be categorized roughly into 1. First-Wave Technologies – the pre-industrial, craft or artisan technologies which are based on empirical know-how rather than scientific knowledge 2. Second-Wave Technologies – the industrial technologies which are based on the classical scientific knowledge of the bulk or macroscopic properties, structures, behaviors, and interactions of matter. 3. Third-Wave Technologies – the post-industrial or high technologies which are based on the latest scientific knowledge of the structure, properties, behaviors, and interactions of molecules, atoms, nuclei, and fundamental particles.
Examples of these three broad levels of technological sophistication for various types of technologies are shown in Table 2.
TYPES OF TECHNOLOGY MATERIALS TECHNOLOGIES INSTRUMENT TECHNOLOGIES ENERGY TECHNOLOGIES INFORMATION TECHNOLOGIES MEDICAL TECHNOLOGIES AGRICULTURAL TECHNOLOGIES MANUFACTURING TECHNOLOGIES MILITARY TECHNOLOGIES
FIRST WAVE TECHNOLOGIES Copper, Bronze, Iron, Ceramic Plow, Saw, Spinning Wheel Firewood, Watermill, Windmill Printing Press, Pens, Books Traditional Medicine, Herbal Medicine Traditional Agriculture Craft-Based and Guild Manufacturing Sword-and-Shield, Bow-and-Arrow
SECOND WAVE TECHNOLOGIES Steel, Aluminum, Petrochemicals Engines, Motors, Machine Tools Steam Engine, Turbogenerator Typewriter, Radio, Telephone, TV Immunization, Modern Surgery Mechanized Agriculture, Green Revolution Factory-Based, Mass Production Guns and Explosives Tanks and Airplanes
THIRD WAVE TECHNOLOGIES Semiconductors, Composites Lasers, Robots, Micromachines Photovoltaics, Nuclear Fusion Computers, Internet, Mobile Phone MRI, Biotech Medicine, Smart Drugs Biotech Agriculture, Precision Smart Farming CAD/CAE/CAM, FMS Robotic Factories Space Wars, Electronic Battlefield
Table 2. Examples of Levels of Technology
Our country’s level of technological capabilities can be gauged roughly from our economy’s exports and imports: The Philippines exports mostly low value added products such as garments; assembled integrated circuits or ICs; fashion accessories; gifts, toys, and houseware; fresh and processed fruits; tuna, shrimp, and seaweed; furniture; and low-end software; and contract workers. Our country, in turn, imports high-tech products such as power-generating machineries, specialized machines, heavy equipment, transport engines and equipment, telecommunications equipment, computing equipment, machine tools, chemicals, bulk pharmaceuticals, IC wafers, etc.
Although the Philippines today is one of the major exporters of high technology products (principally, electronic products) from the developing world, it is a well known fact that it is able to achieve this high electronic export performance by importing the core components (the IC wafers) and other raw materials from abroad and then assembling them into finished electronic products with the use of cheap labor but with very little value added (Mani, 2002; Salazar, 1998). Based on the personal observations and assessments of Posadas and Roque (1994), Philippine domestic firms, except for a handful, have not been able to develop technological capabilities beyond the adaptive levels with respect to foreign-sourced technologies, even those that are already mature and declining . In general, domestic firms acquire the technologies they need through licensing, joint ventures, turnkey projects, and other modes of international technology transfer and simply implement these foreign technologies without attempting to reverse engineer these technologies, master them, and improve them. Since none has reached duplicative and higher technological capabilities (except for one or two), almost all Philippine domestic firms have remained mere technology importers, consumers, and users that are highly dependent on the acquisition of foreign technologies to meet their technical needs. As a consequence, the Philippine economy has remained a mere importer and consumer of industrial and high technologies and has not yet learned to become a producer and exporter of advanced technologies. Philippine technological capabilities are still largely backward and dependent, being mostly adaptive relative to industrial 20th century technologies, and merely theoretical or at most operative relative to 21st century high technologies.
An egregious yet typical example of the weak and dependent technological capabilities found in almost all Filipino-owned firms is the National Power Corporation (NPC or NAPOCOR), which has remained at the operative level in electric power generating capabilities since 1972 due to this company's continuing dependence on foreign firms for the design and construction of power plants. In stark contrast, its South Korean counterpart, KEPCO, has successfully attained innovative capabilities and global competitiveness in electric power generation technologies, including nuclear power technology. Another glaring example of Philippine technological weakness is the jeepney which some Filipinos like to claim as the embodiment of Filipino ingenuity but which to me exemplifies Filipino inability to achieve self-reliance in designing and manufacturing an internal combustion engine – a hundred-year old technology that Koreans, Malaysians, and Chinese have learned to design and produce on their own. Thus, the Philippine economy can be characterized as having very low levels of technological capabilities; being highly dependent on the importation of technologies though various modes of international technology transfer from technology purchase, licensing, subcontracting, turnkey projects, joint ventures, and foreign direct investments; having no motive or effort to learn and master the imported technologies or to move up the ladder of technological capabilities; being averse to local technology sourcing or technology transfers from domestic R&D laboratories;
lacking competence in technology management and making do with poor product and process technologies; and
lacking technology-based global competitiveness.
4. Colonial Cultural Roots of Philippine Underdevelopment
One of the major differences between East Asians (i.e., Japanese, Koreans, Taiwanese , and Chinese) and Filipinos is their contrasting attitudes towards Western technology and their own national culture. After U.S. Commodore Perry had forced Japan in 1853 to open its doors to foreign trade by demonstrating the superiority of Western (military) technology, some Japanese samurai decided to overthrow the feudal Tokugawa Shogunate and replace it with a modernizing Emperor–led regime that could industrialize Japan and enable it to catch up with the US and European powers economically, technologically, and militarily. So when they succeeded in putting the young Emperor Meiji on the throne in 1868, they immediately carried out an industrialization program under the basic formula of “Japanese Spirit, Western Technology”, that is, upholding Japanese values, culture, and nationalism while mastering and leapfrogging Western technologies. Later this formula was directed towards the specific twin goals of building a “Rich Nation, Strong Army”. This motto -- “Rich Nation, Strong Army”— which was the inspiration for the title of this talk, was also the title of a book by Richard J. Samuels (1996) that tells the story of how the Meiji regime was able to achieve industrial and technological catch-up by 1903 such that in the 1904-1905 Russo-Japanese War the Japanese imperial navy and army, using Japanese-built battleships and warships and
weapons, were able to defeat the Russian armed forces. “Rich Nation, Strong Army” was a simple yet powerful motto that was based on the recognition by Japan’s Meiji leaders that the West was strong because their industry, science, and technology produced weapons that Japan and other Asian countries did not have. From the 1960s onwards this successful Japanese model of nationalist industrial and technological catch-up would become the inspiration for the successful industrialization efforts of other East Asian countries like South Korea, Taiwan, China, and Malaysia. These newly industrialized countries (NICs) basically
followed the Japanese formula of “Asian Spirit, Western Technology” and pursued the Japanese motto of “Rich Nation, Strong Army”. In other words, they upheld nationalist values in order to master, catch up on, and leapfrog
Western technologies for the purpose of building a rich economy and a strong military. In contrast, after the Filipino revolutionaries were defeated in the 1898-1901 Philippine-American War due mainly to the superiority of US military technology, our grandfathers and great grandfathers did not follow the Japanese formula of “Filipino Spirit, Western Technology”. Instead, they adopted the reverse formula of “Western Spirit, Filipino Technology”, that is, they opted to emulate Western values and culture, imbibed a colonial mentality, neglected to master Western technologies, kept a low level of technological capability, and continued to be mere importers and users of technology. And so unlike our successful East Asian neighbors, we Filipinos continue to have low levels of scientific and technological capabilities and we ended up with a poor nation and a weak military that can be bullied by other nations.
5. The Economic Ideological Reinforcement of Philippine Underdevelopment The economic and technological backwardness and dependence of the
Philippines are also being reinforced and perpetuated by the economic ideology of liberalism, which is being propagated and taught by the country’s mainstream economists, practiced by most local businessmen, and implemented by successive Philippine governments since 1986. Liberalism refers to the economic ideology that advocates laissez faire, free trade, free markets, free enterprise, a minimal role for the state in the economy, privatization and deregulation, and comprises the neoclassical economic theories of Adam Smith, David Ricardo, Friedrich Hayek, and Milton Friedmann. After the establishment of the Bretton Woods institutions (the IMF and the World Bank), GATT, and the World Trade Organization, liberalism came to be known as “neoliberalism” and since the 1990s became synonymous with the so called “Washington Consensus”, i.e., the economic policy consensus and prescriptions of the IMF, the World Bank, and the U.S. Treasury Washington, D.C. Liberalism holds that the solution to the underdevelopment of our country’s economy and technology is to make all economic, business, and technology decisions conform to market needs, problems, and opportunities and to the "principle of comparative advantage." The latter principle holds that a firm, industry, or country should specialize on production technologies and systems that can make maximum use of its current endowments or its comparative advantage. The application of this neoclassical economic principle of comparative advantage to the selection, acquisition, and exploitation of technology is called which are located in
technoliberalism which holds that a firm should not design and produce its own technology if it does not have the comparative advantage to do so or, in other words, if it is easier and more cost-effective to buy or lease the technology. Thus, technoliberalism is the economic reason behind the NPC’s unwillingness to design and produce its own power plants, turbines, and generators and its continuing addiction to the importation of power plants and power equipment through turnkey projects. Technoliberalism is the reason why most Filipino-owned firms have remained technologically backward and dependent, have continued to be mere users and importers of foreign technology, and have not attained technological capabilities beyond adaptive levels. It is technoliberalism that has been preventing our economy from industrializing, keeping our economy stagnant and dependent on OFW remittances, allowing our neighbors overtake us in terms of GDP per capita, and perpetuating the AFP’s laggardness in military technology and dependence on old, hand-medown weapons and equipment from the U.S. military Neoliberalism and technoliberalism are flawed ideologies that are refuted by the fact that their adoption by successive Philippine governments since 1986 has kept our economy and technology underdeveloped while their rejection by Japan, South Korea, Taiwan, China, and Malaysia enabled these countries to achieve rapid industrial, technological, and economic catch-up. In fact, these late industrializing countries deliberately defied the principles of comparative advantage to create globally competitive industries in steel-making, shipbuilding, transport vehicles, IC fabrication, mobile communications, machine tools, heavy equipment, power generation, etc.
Although Dr. Bernardo Villegas (2009), one of the most vocal advocates of liberalism in the Philippines, has recently blamed our country’s continuing underdevelopment on the anti-market, protectionist, import-substituting policies adopted by the government since 1945, the fact is that liberalism has been the dominant economic ideology of our country for the past 27 years which was also the period when we were overtaken by Thailand, Indonesia, and China. In the past five years, the ideological hegemony of neoliberalism itself has been undermined by the consensus, among critics and proponents alike [such as J. Stiglitz (2004), D. Rodrik (2006), and S. Radosevic (2009)], that the Washington Consensus is a failed recipe for economic development. In fact, development economists are now working out a post-Washington Consensus that appears to be more open to the emerging alternative economic paradigm known as “innovation economics.”
6. The Vicious Circle of Technological Laggardness and Dependence The adoption of technoliberalism has made our national economy dependent on the import of foreign technologies and effectively eliminated demand for domestically created technologies. This almost zero demand in turn has reduced pressure on the government and industry to make substantial investments in the national development of science and technology or S&T. This underinvestment in S&T in turn has rendered local S&T underdeveloped and incapable of meeting the technological needs of local industry. And this local technological incapability in turn has reinforced the dependence on technology importation, resulting in a vicious circle of S&T and economic underdevelopment and dependence, as
depicted in Figure 2 and Figure 3.
WEAK S&T RESOURCES & CAPABILITIES
LOW LEVEL OF PUBLIC & PRIVATE SUPPORT FOR S&T
CONTINUING TECHNOLOGICAL DEPENDENCE
WEAK EFFECTIVE DEMAND FOR LOCAL S&T
FIGURE 2. MACRO VIEW OF THE VICIOUS CIRCLE OF PHILIPPINE S&T AND ECONOMIC UNDERDEVELOPMENT AND DEPENDENCE
LOCAL FIRM’S LACK OF DRIVE TO CONDUCT MOT, R&D AND TECHNOLOGICAL INNOVATION
LOCAL FIRM’S BACKWARD TECHNOLOGIES AND WEAK TECHNOLOGICAL CAPABILITIES
LOCAL FIRM’S IMPORTATION OF TECHNOLOGIES FROM ABROAD
LOCAL FIRM’S LACK OF DRIVE TO UPGRADE ITS TECHNOLOGIES TO GLOBAL STANDARDS
LOCAL FIRM’S INABILITY OR UNWILLINGNESS TO MASTER THE IMPORTED TECHNOLOGIES
LOCAL FIRM’S SATISFACTION WITH DOING BUSINESS IN THE DOMESTIC MARKET
LOCAL FIRM’S LACK OF GLOBAL TECHNOLOGY-BASED COMPETITIVENESS
LOCAL FIRM’S CONTINUING ADDICTION TO THE IMPORTATION OF MATURE TECHNOLOGIES
FIGURE 3. MICRO VIEW OF THE VICIOUS CIRCLE OF PHILIPPINE S&T AND ECONOMIC UNDERDEVELOPMENT AND DEPENDENCE
This vicious circle is the basic central problem of the Philippines that has perpetuated the underdevelopment and dependence of our country's economy and S&T system. It explains why Filipino-owned firms like NAPOCOR have remained dependent on technology importation up to now, why the Philippines has failed to
industrialize and catch up, why the AFP has lagged behind its counterparts in Asia in modernization, and why many of our neighboring countries have overtaken us. With the identification of our country's basic central problem, its solution becomes obvious. What needs to be done is to cut this vicious circle of S&T and economic laggardness and dependence and to replace it with a virtuous circle of S&T and economic innovativeness and competitiveness geared towards rapid national economic and S&T catch-up and even leapfrog in certain sectors. To achieve this, our national government will have to discard the failed and
discredited economic ideologies of neoliberalism and technoliberalism and adopt an alternative approach which I will explain in the next section.
7. The Technonationalist, Catch-up Oriented, Capability-Based Approach What I have been advocating for the past twenty-five years as an alternative to the prevailing neoliberal and technoliberal approaches is the technonationalist, catch-up oriented, capability-based approach that makes use of the precepts of the successful East Asian models of industrial and technological catch-up and development or what has been called the East Asian Consensus.
It is based on what has been called "technonationalism" which holds that long-term strategic national interests should take precedence over short-term comparative advantages on matters involving technology selection, acquisition, and exploitation, that achieving technological self-reliance in strategic technologies is a matter of national security, and that building up a country’s scientific and technological capabilities to the highest world-class levels is a national imperative for building a rich nation and a strong military. The essence of technonationalism
can be captured in the formula, “Nationalist Culture, Advanced Technology”, which is adapted from the Meiji formula of “Japanese Spirit, Western Technology” and which would seek to acquire, learn, master, and leapfrog the latest technologies in order to advance national goals and interests. This alternative approach is also “catch-up oriented” because it aims to achieve rapid industrial, S&T, and economic catch-up, if not leapfrogging, in certain selected sectors of the economy through the adoption of a development strategy of cluster-based industrialization. This strategy would identify appropriate industries to be created in every district of the country and then develop these selected industries into globally competitive industrial clusters. The industrial clusters to be developed could range from shipbuilding clusters, electric vehicle clusters, gun making clusters, aerospace clusters, materials clusters, heavy equipment clusters, machine tool clusters, electrical equipment clusters, furniture clusters, pharmaceutical clusters, cutflower clusters, food processing clusters, appliances clusters, nanotechnology clusters, information technology clusters, etc. The approach is also “capability-based” because it is geared towards the rapid development of the technological capabilities of Filipino-owned firms to global competitiveness and the build up of the country's scientific capabilities to world-class levels of excellence. Moreover, it follows more or less the “East Asian Consensus” or what Lee and Mathews (2009) prefer to call the “BeST Consensus”, after Beijing, Seoul, and Tokyo ─ the set of industrial catch-up precepts that has enabled East Asian countries to achieve rapid industrialization, technological catch-up, and economic progress or what has been called "The East Asian Miracle".
As expounded by Lee and Mathews (2009), the basic components of the “East Asian Consensus” are
A. Creating the two principal agents of economic growth
1. Creating firms and building their capabilities (e.g., family-owned conglomerates or chaebols like Samsung in South Korea or government spin-out companies like Lenovo of China and Taiwan Semiconductor Manufacturing Company of Taiwan)
2. Creating and relying upon the “pilot” or coordinating State agencies to guide industrialization (e.g., MITI in Japan, Economic Planning Board in South Korea, Central Economic Planning Board in Taiwan, and National Development and Reform Commission in China)
B. Setting into motion the process of capability enhancement 3. Arranging firms to access and leverage advanced knowledge through various modes of international technology transfer 4. Promoting export-based engagement with the global economy to discipline firms and expand markets 5. Targeting industries/technologies for (initially import-substituting) development 6. Sequential upgrading of the leading sectors and activities to secure dynamic comparative advantages
C. Creating an economic environment in which capability development will proceed 7. Building broad-based education, from primary education to tertiary education 8. Creating a financial system that is catch-up friendly but cautious about external financial liberalization 9. Establishing stable macroeconomic settings 10. Gradual phasing out of non-market interventions
8. The Nature and Importance of Technology Management While technonationalism will serve as the basic strategy and principle for attaining the twin national goals of a rich nation and a strong military, the precepts, methods, and techniques of technology management will be needed to implement the technonationalist program. Although the formal recognition of technology management (or management of technology) as a distinct field of management came about only in the last 25 years, the practice of technology management at the firm and national levels has long been pursued as far back as the Industrial Revolution in the mid-18th century. In Asia, the Japanese have been using technology management competently and effectively in their successful drive towards industrialization and technological catch-up since the Meiji Restoration in 1868. Then following this Japanese model of technology management, the Koreans and Taiwanese succeeded in
industrializing their economies, becoming export tigers, and attaining catch-up competitiveness within 30 years. Technology can be defined in a narrow sense as "the engineering knowledge needed to create and produce a new product or process" or in a broader sense as "the means for accomplishing a specific task". In terms of Michael Porter's valuechain model of a firm (Porter 1985), we can define a firm's or organization’s technologies as the ways in which it performs its value-chain activities, as depicted in Figure 4 and Figure 5.
HUMAN RESOURCE MANAGEMENT TECHNOLOGY DEVELOPMENT PROCUREMENT
M AR GI N
N IG RA
MARKETING AND SALES
Figure 4: Michael Porter’s Value-Chain Model of a Firm
FIRM INFRASTRUCTURE HUMAN RESOURCES MANAGEMENT TECHNOLOGY DEVELOPMENT
Information System Technology Planning and Budgeting Technology Office Technology Training Technology Motivation Research Information Systems Technology Product Technology Computer-aided Design Pilot Plant Technology Software Development Tools Information Systems Technology
MA RG IN
Information System Technology Communication System Technology Transportation System Technology
Transportation Technology Material Handling Technology Storage & Preservation Technology Communication System Technology Testing Technology Information System Technology
Basic Process Technology Materials Technology Machine Tool Technology Material Handling Technology Packaging Technology Maintenance Methods Testing Technology Building Design/ Operation Technology Information System Technology
Transportation Technology Material Handling Technology Packaging Technology Communication System Technology Information System Technology
Media Technology Audio & Video Recording Technology Communication System Technology Information System Technology
Diagnostic and Testing Technology Communication System Technology Information System Technology
N GR I AM
MARKETING AND SALES
Figure 5: Representative Technologies in a Firm’s Value Chain
It is clear, therefore, that technology, broadly defined, pervades all the activities of a firm or organization. And so a firm or organization can create competitive advantages for itself --- whether in terms of lower costs through the use of better process technologies or of distinct and better products through the use of better product technologies --- by making appropriate technological decisions for each value-chain activity as to the selection, sourcing, acquisition,
generation, exploitation, assimilation, improvement, or abandonment of technology. The integrated and consolidated set of technology decisions for all of the firm's or organization’s value-chain activities will constitute the firm's or organization’s technology strategy. Technology management at the level of a firm or organization can now be defined as the strategic formulation and operational implementation of a technology strategy that informs, and conforms with, the firm's or organization’s competitive strategy. Technology management can be pursued through an exogenous innovation cycle from the acquisition to the learning and mastery of an externally sourced technology or through an endogenous innovation cycle from in-house research and development (R&D) to technology commercialization or through a judicious combination of these two approaches as depicted in Figure 6. If we define a firm's competitiveness as its ability to get customers to choose its product(s) or service(s) over competing alternatives on a sustainable basis, then it is obvious that technology management is strategically important to competitiveness for it can improve the firm's product technology (i.e., the design of novel or better products) or its process technology (i.e., the efficient production of products). The first step in technology management is the technology audit of a firm or organization, i.e., the assessment of the firm's or organization’s strengths and weaknesses for each of its technologies in terms of two measures: (1) the specific technology’s level of technological sophistication or the extent of its proximity to the technological frontier or state-of-the-art; and (2) the firm’s or
organization’s level of technological capability or the extent of its technological mastery relative to that specific technology.
Figure 3: Technology Management Framework in Terms of an Endogenous Innovation Cycle or an Exogenous Innovation Cycle
The first step in technology management is the technology audit of a firm or
Figure 6: Technology Management Framework in Terms of an Endogenous Innovation Cycle or an Exogenous Innovation Cycle
Technological catch-up by a firm in a particular technology is the attainment of innovative to creative levels of technological capabilities in the technology through a process of technological learning, assimilation, and mastery from “behind-the-technology-frontier”. “Catch-up competitiveness” can be defined as the ability of a firm to catch-up technologically with the world’s technology leaders and to compete in international markets. As explained by the Asian Development Bank (2003), “catch-up competitiveness is based on ‘behind the frontier’ innovations, involving constant improvements to process and products (and their interfaces), supported by various kinds of technical and engineering capabilities… [and it] depends on entrepreneurship and educational provision, as well as market-friendly institutions and sound macroeconomic management.” We can also use the term “catch-up technology management” to refer to a firm’s effective selection, acquisition, development, exploitation, learning, and mastery of the technologies needed to catch-up with the world’s technology leaders in its chosen industry. In short, catch-up technology management is technology management geared and oriented toward technological catch-up and global competitiveness. At the national or governmental level, technology management has been defined by Khalil (2000) as “A field of knowledge concerned with the setting and implementation of policies to deal with technological development and utilization, and the impact of technology on society, organizations, individuals and nature. It aims to stimulate innovation, create economic growth, and to foster responsible use of technology for the benefit of humankind.”
Thus, national technology management is concerned with the formulation and implementation of national science and technology strategies, policies, plans, roadmaps, and programs. In the Philippines, I had for many years wanted to find a way, a medium for advocating and propagating the concepts, principles, and methods of technonationalism and technology management among Filipino businessmen, managers, and government officials so that a new generation of technonationalist managers, administrators, and policy-makers could be developed to counter the prevailing economic ideologies of liberalism and technoliberalism. In February 1995 I succeeded in pioneering the institutionalization of technology management when I was able to get the U.P. Board of Regents to approve the establishment of the Technology Management Center (TMC) in U.P. Diliman. Since June 1996, TMC has been offering the country’s first and only Master of Technology Management Program and admitting more than 60 students every year from various industries including the pharmaceutical,
information and communications technology, banking, fastfood, food processing, electronics, transportation, energy, agriculture, etc. Since 1998, TMC has already produced around 300 MTM graduates. Several of our MTM alumni are from the Philippine Army and the Philippine Air Force.
I hope that the Philippine Navy will also send some of its officers to the TMC in UP Diliman to get a Master in Technology Management. I also hope that the Philippine Navy will establish its own Office of Naval Technology Management which will be responsible for carrying out technology audit, technology benchmarking, technology intelligence, technology foresight, technology
assessment, technology acquisition, and technology implementation for the Philippine navy’s modernization program.
I will now close my talk by giving some concluding remarks that are centered on the formula, “Filipino Nationalism, Advanced Technology”, which is an adaptation of the Japanese Meiji formula of “Japanese Spirit, Western Technology”. If we just focus on the first part of the formula (Filipino Nationalism) and ignore the second part (Advanced Technology), we get all these speeches and writings about the need for patriotism, nationalism, good citizenship, good leadership, and good governance which are heartening and spirit lifting but which will not be of much value in defending our country or developing our economy unless supported by high levels of technological capabilities for economic development and national defense. Therefore, Filipino Nationalism – Advanced Technology = Technologyless Development a Poor Country + a Paper Army.
On the other hand, if we just focus on acquiring the second part (Advanced Technology) without the guidance of the first part (Filipino Nationalism), we get Technoliberalism and end up trapped in a vicious circle of economic and
technological laggardness and dependence that has allowed our Asian neighbors to overtake us economically, technologically, and militarily. Therefore, Advanced Technology – Filipino Nationalism = Technoliberalism a Weak Army. a Poor Country +
So what our country needs in order to achieve the twin goals of a Rich Nation and a Strong Military is the combination of Filipino Nationalism and Advanced Technology, i.e., Technonationalism with Technology Management. In other words, Filipino Nationalism + Advanced Technology =
Technonationalism + Technology Management Military.
Rich Nation + Strong
I dream of a future scenario in which our country will have its own thriving defense industries that will be able to produce Filipino-designed warships, aircraft carriers, frigates, destroyers, robotic boats, unmanned aerial vehicles, stealth submarines, robotic minisubs, supersonic fighters, torpedoes, cruise missiles, other missiles of various types, amphibious combat vehicles, battle tanks, new weapon systems, cyberwarfare systems, etc. Like all of you here, I dream of a future Philippine Navy that has the capability to defend our territories and stand up to foreign naval bullies. This is not an impossible dream. This can be realized in 30 years or less if we undertake a paradigm shift from economic liberalism and technoliberalism to economic nationalism and technonationalism and use technology management to upgrade our technological capabilities to innovative and creative levels, to carry out cluster-based industrialization, and to transform our country to first world status. Thank you very much and good day!
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