SCIENTIFIC AND TECHNOLOGICAL CAPABILITIES AND ECONOMIC CATCH-UP

by

Roger D. Posadas, Ph.D.
Professor, Technology Management Center University of the Philippines – Diliman

February 3, 2010

Topic Outline
1. Introduction and Overview of the Economic Underdevelopment of the Philippines 2. The Extent of the Country’s S&T Underdevelopment 3. The “Science-Push” Approach to the Development of the Country’s S&T and Economy 4. The “Market-Pull” Approach to the Development of the Country’s S&T and Economy 5. The Country’s Vicious Circle of S&T Underdevelopment and Dependence 6. The Alternative, Technonationalist, “CapabilityBased, Catch-up-Oriented” Approach to the Development of the Country’s S&T and Economy 7. Proposed National S&T Catch-up Agenda

Overview of the Economic Underdevelopment of the Philippines

OVERVIEW OF THE COUNTRY’S ECONOMIC UNDERDEVELOPMENT

In the early 1960s the Philippines was acknowledged to be 2nd only to Japan in Asia in terms of industrial, educational, technological, and economic develop- ment. Today or about 50 years later our country has been left behind by South Korea, Taiwan, Singapore, Malaysia, Thailand, China, a nd Indonesia as they became newly industrialized countries. And now Vietnam is about to overtake our country in the next few years as the next slides will show.

Table 1: THE GROWTH IN GDP PER CAPITA BY PPP$ OF THE PHILIPPINES AND OF ITS NEIGHBORS
Country 1950 1960 1970 1980 1990 2000 2008

Singapore
Japan Taiwan Korea, Rep. Malaysia Thailand China

3,533
2,645 1,064 1,054 1,940 712 418

3,426
5,489 1,679 1,513 1,904 940 592

6,994
13,375 3,300 2,674 2,587 1,477 665

14,104
18,488 6,995 5,076 4,550 2,227 868

23,143
25,870 13,361 10,739 6,386 4,039 1,465

36,835
28,559 23,094 17,543 10,161 5,578 2,564

45,295
31,823 28,560 23,824 12,794 7,776 5,520

Indonesia
Philippines Vietnam
Source: Gapminder.

704
1,149 579

834
1,584 696

986
1,893 641

1,549
2,549 660

2,097
2,386 894

2,715
2,598 1,577

3,708
3,279 2,576

Figure 1: GRAPH OF THE GROWTH IN GDP PER CAPITA BY PPP$ OF THE PHILIPPINES AND OF ITS NEIGHBORS
30000

25000

20000

15000

Taiwan Korea, Rep. Malaysia Thailand China Indonesia Philippines Vietnam

10000

5000

0 1950 1960 1970 1980 1990 2000 2008

OVERVIEW OF THE COUNTRY’S ECONOMIC UNDERDEVELOPMENT

The Table and Graph actually show that in terms of GDP per capita PPP the Philippines was No. 4 in 1950 behind Singapore, Japan, and Malaysia. Nevertheless, in 1950 the Philippines was slightly ahead of South Korea and Taiwan and its per capita GDP was about 1.5 times higher than 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.

The Extent of the Country’s S&T Underdevelopment

AN INTEGRATED FRAMEWORK FOR ASSESSING THE STATE OF PHILIPPINE S&T

SUPPLY

LINKAGE

DEMAND

NATIONAL S&T SUPPLY SYSTEM

NATIONAL TECHNO TRANSFER SYSTEM

NATIONAL PRODUCTION SYSTEM

 S&T Education and

 Technology

Training • Basic Research • Applied Research and Invention • S&T Services

Incubation  Technology Transfer • Technology Commercialization • Technology Diffusion

 Technology Implementation • Technological Learning • Technological Capability Building

THE STRONG INTERACTIONS AMONG THE SYSTEMS OF RESEARCH, TECHNOLOGY TRANSFER, AND PRODUCTION IN ADVANCED COUNTRIES

ASSESSMENT OF THE NATIONAL S&T SUPPLY SUBSYSTEM...1

PRINCIPAL INPUT INDICATORS OF THE NATIONAL S&T SUPPLY SUBSYSTEM: ● THE COUNTRY’S NO. OF FULL-TIME EQUIVALENT (FTE) RESEARCHERS PER MILLION INHABITANTS

● THE COUNTRY’S GROSS DOMESTIC EXPENDITURES ON R&D (GERD) AS A PERCENTAGE OF ITS GROSS DOMESTIC PRODUCT: GERD/GDP ● THE COUNTRY’S PER CAPITA GERD BY PURCHASING POWER PARITY (PPP)

ASSESSMENT OF THE NATIONAL S&T SUPPLY SUBSYSTEM...2

PRINCIPAL OUTPUT INDICATORS OF THE NATIONAL S&T SUPPLY SUBSYSTEM:

● PERCENTAGE SHARE OF THE COUNTRY’S ISI PUBLICATIONS IN THE TOTAL ANNUAL NO. OF ISI PUBLICATIONS
● NO. OF ISI PUBLICATIONS PER FTE RESEARCHER ● PERCENTAGE SHARE OF THE USPTO PATENTS GRANTED TO RESIDENT INVENTORS OF THE COUNTRY IN THE TOTAL ANNUAL NO. OF PATENTS GRANTED BY THE USPTO

ASSESSMENT OF THE NATIONAL S&T SUPPLY SUBSYSTEM...3

According to UNESCO, the Philippines has very few researchers ─ only 81 FTE researchers per million inhabitants in 2005 ― which is the lowest among the original ASEAN-5 and way, way below the UN standard of 380 that had been set as a 1980 target for developing Asian countries.

In absolute numbers, the Philippines in 2005 had a total of 6,896 FTE researchers and a headcount of 10,690 researchers.
How the Philippine figures compare with those of other countries is shown in Table 2.

Table 2: THE NUMBER OF RESEARCHERS IN THE PHILIPPINES AS COMPARED TO THOSE OF ITS NEIGHBORS
Country Singapore Japan U.S.A. Korea, Rep.
No. of FTE Researchers per Million Population Total No. of FTE Researchers Total Head Count of Researchers

6,088 a 5,573 a 4,663 b 4,627 a

27,301 a 709,974 a 1,425,550 b 221,928 a

31,657 a 883,386 a --289,098 a

China
Malaysia Thailand Indonesia

1,071 a
372 b 311 c 205 e

1,423,380 a
9,694 b 20,506 c 42,722 e

--19,021 b 34,084 c ---

Vietnam
PHILIPPINES
Source: UNESCO Institute for Statistics.

115 d
81 c

9,328 d
6,896 c

41,117 d
10,690 c

Superscripts: a = 2007, b = 2006, c = 2005, d = 2002, e = 2001

ASSESSMENT OF THE NATIONAL S&T SUPPLY SUBSYSTEM...4

The UNESCO also reports that the Philippines had a GERD/GDP of only 0.12% which is second to the lowest among the original ASEAN-5, a big drop from its value of 0.22% in the 1990s, and again way, way below the UN standard of 1% that had been set as a 1980 target for developing countries.

The Philippines also spent a per capita GERD of only $3.40 PPP in 2005, which is next to the lowest among the ASEAN-5 and way below the per capita GERD of $500-$1000 PPP spent by developed countries.
Table 3 compares the Philippine figures with those of other countries.

Table 2: THE PHILIPPINE EXPENDITURES ON R&D AS COMPARED TO THOSE OF ITS NEIGHBORS
Country Japan GERD as % GDP 3.45 a GERD Per Capita PPP$ 1,158.50 a

Korea, Rep.
U.S.A. Singapore China Malaysia Thailand

3.47 a
2.67 a 2.61 a 1.49 a 0.64 b 0.25 b

868.50 a
1,194.80 a 1,341.80 a 78.90 a 79.90 b 18.10 b

Vietnam
PHILIPPINES

0.19 d
0.12 c

3.10 d
3.40 c

Indonesia
Source: UNESCO Institute for Statistics.

0.05 c

1.60 c

Superscripts: a = 2007, b = 2006, c = 2005, d = 2002

Table 4: PHILIPPINE EXPENDITURES ON R&D UNDER THE GMA ADMINISTRATION

2002

2003

2005

GERD as % GDP

0.15

0.14

0.12

GERD Per Capita PPP$

3.60

3.50

3.40

ASSESSMENT OF THE NATIONAL S&T SUPPLY SUBSYSTEM...5

From the ISI-WOS Citation Databases, one can find that the Philippines in 2005 had only 520 ISI publications which constituted only a tiny share ─ 0.04%─ of all ISI publications that year and gave the country a world ranking of 72. In comparison, as shown in Table 5, Indonesia had 586 publications, Vietnam 590, Malaysia 1,596, Thailand 2,615, Singapore 6,528, Taiwan 16,147, South Korea 26,434, and China 70,962, Japan 77,263, all in 2005. Table 6 then shows the growth in ISI publications of some ASEAN countries during the period 1999-2005.

Table 5: COMPARATIVE STATISTICS ON WORLD SHARE OF ISI-WOS PUBLICATIONS AND NO. OF ISI-WOS PUBLICATIONS PER FTE RESEARCHER No. of Publications per Researcher
0.22 0.11 0.08 0.17 ---

Rank 1 2 5 11 18

Country U.S.A. Japan China South Korea Taiwan

No. of Publications 304,670 77,263 70,962 26,434 16,147

% Share 25.60 6.40 5.96 2.22 1.36

No. of FTE Researchers 1,393,520 a 677,206 a 926,252 a 156,220 a ---

30
43 50 66 68 72

Singapore
Thailand Malaysia Vietnam Indonesia Philippines

6,528
2,615 1,596 590 586 520

0.55
0.22 0.13 0.05 0.05 0.04

21,359 a
18,114 b 12,670 a 9,328 c 42,722 d 5,860 b

0.30
0.14 0.12 0.06 0.01 0.09

Sources: ISI-WOS Citation Database and UNESCO Institute for Statistics Data.

Superscripts:

a = 2004, b = 2003, c = 2002, d = 2001

Table 6: ANNUAL NO. OF ISI-WOS PUBLICATIONS FROM THE PHILIPPINES AND ITS ASIAN NEIGHBORS DURING THE PERIOD 1999-2005

Country

1999 3,129 1,076

2000 3,732 1,272

2001 4,249 1,466

2002 4,620 1,766

2003 5,218 2,100

2004 5,955 2,299

2005 6,528 2,615

TOTAL 1999-2005

Singapore Thailand

33,431 12,604

Malaysia
Indonesia

889
389

860
457

997
506

1,039
481

1,213
497

1,412
540

1,596
586

8,006
3,456

Philippines
Vietnam

343
271

387
328

366
377

451
376

467
510

475
464

520
590

3,009
2,916

Source: ISI-WOS Citation Database.

ASSESSMENT OF THE NATIONAL S&T SUPPLY SUBSYSTEM...6

The supposed Filipino “inventiveness”, often touted by Philippine media, is belied by the patent databases of the USPTO which show that the total no. of utility patents granted by the USPTO to Philippine-based inventors during the period 1988-2008 was only 355. This was more than Indonesia’s 178 and Thailand’s 303 but much less than Malaysia’s 947, Singapore’s 4,097, China’s 8,975, South Korea’s 57,968, Taiwan’s 70,643, and Japan’s 725,866, as shown in Table 7 and Fig. 2.

What is worse is that most of these seemingly Filipino inventions turn out to be inventions filed by Philippine subsidiaries of foreign multinational corporations,

Table 7: THE PHILIPPINES’ SHARE OF USPTO PATENTS AS COMPARED TO THOSE OF ITS NEIGHBORS
Country Total No. of Patents 1963-1987 % Share Total No. of Patents 1988-2008 % Share

U.S.A.
Japan

1,091,416
148,024

66.5
9.01

2,538,250
725,866

57.94
16.57

Taiwan
Korea, Rep. China Singapore Malaysia

1,306
343 519 76 34

0.08
0.02 0.03 0.005 0.002

70,643
57,968 8,975 4,097 947

1.61
1.32 0.205 0.093 0.022

PHILIPPINES
Thailand

132
19

0.008
0.001

355
303

0.008
0.007

Indonesia

75

0.004

178

0.004

Figure 2: INCREASE IN THE NO. OF USPTO PATENTS GRANTED TO NATIONALS OF SELECTED ASIAN COUNTRIES
9000 8000 1963-1987 7000 1988-2008 6000 5000 4000 3000 2000
947 4,097 8,975

1000
75

178

19

303

132 355

34

76

519

0 Indonesia Thailand Philippines Malaysia Singapore China

ASSESSMENT OF THE NATIONAL TECH TRANSFER SUBSYSTEM...1

The National Technology Transfer Subsystem of the Philippines is still in the embryonic stage as indicated by the following: ● The counterpart of the Bayh-Dole Act of the U.S. has not yet been enacted. ● Technology-business incubators and technology parks are still in the development stages. ● Activities involving technology entrepreneurship, or university spin-offs have not yet taken off.

ASSESSMENT OF THE NATIONAL TECH TRANSFER SUBSYSTEM...2

The National Technology Transfer Subsystem: (cont’d) ● The Philippine venture capital industry is still in its infant stage. ● A Triple Helix of Government – Academia Business interactions has not yet been formed.

● Technology commercialization activities leading to new or improved technology-based products, processes, or services are scarce among domestic firms.

ASSESSMENT OF THE NATIONAL PRODUCTION SUBSYSTEM...1

The nature and direction of technology demand in the Philippine production system can be gauged from what it exports and imports:
● The Philippines exports mostly low value added prod-

ucts 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.

● The country imports high-tech products such as powergenerating machineries, specialized machineries, transport equipment, telecommunications equipment, computing equipment, heavy equipment, machine tools, chemicals, bulk pharmaceuticals, IC wafers, etc.

ASSESSMENT OF THE NATIONAL PRODUCTION SUBSYSTEM...2

THE EXTENT OF TECHNOLOGICAL DEVELOPMENT OF A FIRM, INDUSTRY, OR COUNTRY CAN BE GAUGED IN TERMS OF TWO DIMENSIONS: 1. TECHNOLOGICAL CAPABILITY --- LEVEL OF THE 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.

FIRM-LEVEL TECHNOLOGICAL CAPABILITIES...1

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.

FIRM-LEVEL TECHNOLOGICAL CAPABILITIES...2

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 technology.

FIRM-LEVEL TECHNOLOGICAL CAPABILITIES...3

REPRODUCTIVE CAPABILITY -- the ability to reproduce the core component 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.

STATE OF PHILIPPINE TECHNOLOGICAL CAPABILITIES...1

The Philippines 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 largely adaptive relative to industrial technologies, and merely theoretical or at most operative relative to high technologies.

STATE OF PHILIPPINE TECHNOLOGICAL CAPABILITIES...2

The technological capability of the National Power Corporation (NPC or NAPOCOR) is a typical, egregious example of the low level of technological capabilities found in most Filipino-owned firms. For the past 38 years NPC has never learned how to design and construct power plants and has remained dependent on the expensive importation of power plants through turnkey projects. Thus, NPC is still stuck at the adaptive level of technological capability. Contrast NPC’s poor track record with that of KEPCO.

CHARACTERISTICS OF THE PHILIPPINE PRODUCTION SYSTEM...1

The Philippine production system can be characterized as ● Having low levels of technological capabilities. ● Being highly dependent on the importation of technologies though various forms of international technology transfer from technology purchase, licensing, and subcontracting to FDI and joint ventures. ● Having no motive or effort to learn and master the imported technologies or to move up the ladder of technological capabilities.

CHARACTERISTICS OF THE PHILIPPINE PRODUCTION SYSTEM...2

The Philippine production system can be characterized as (cont’d):

● Being averse to local technology sourcing or technology transfers from domestic domestic institutional inventors. ● Lacking competence in technology management and making do with poor product and process technologies. ● Being wanting in technology-based global competitiveness.

AN INTEGRATED FRAMEWORK FOR ASSESSING THE STATE OF PHILIPPINE S&T
VERY WEAK SUPPLY CONDITION NATIONAL S&T SUPPLY SUBSYSTEM ALMOST NON-EXISTENT LINKAGES EMBRYONIC NATIONAL TECHNOLOGY TRANSFER SUBSYSTEM VERY WEAK DEMAND CONDITION NATIONAL PRODUCTION SUBSYSTEM

 VERY FEW

• VERY FEW S&T LINKAGES

RESEARCHERS

AMONG ACADEMIA, GOV’T AND INDUSTRY • VERY FEW VERTICAL TECHNOLOGY TRANSFERS • VERY FEW TECHNOLOGY COMMERCIALIZATION PROJECTS

• VERY LITLE DEMAND FOR LOCAL TECHNOLOGY • STRONG ADDICTION TO TECHNOLOGY IMPORTATION
• LACK OF EFFORTS TO LEARN AND IMPROVE IMPORTED TECHNOLOGIES

• VERY FEW AND VERY POOR LABORATORIES
• VERY LITTLE FUNDING FOR RESEARCH

THE CONDITIONS AND RELATIONSHIPS OF THE SYSTEMS OF RESEARCH, TECHNOLOGY TRANSFER, AND PRODUCTION IN THE PHILIPPINES

The “Science-Push” Approach

THE PERSPECTIVE OF THE SCIENCE-PUSH APPROACH...1

The “Science-Push” approach holds that the solution to the underdevelopment of the country’s S&T and economy is to pour more resources (human, financial, etc.) into the national S&T supply subsystem. First expounded by Vannevar Bush in his 1945 Report to President Truman, Science The Endless Frontier.

Pushed by most foreign and local scientists. E.g., Dr. Flor Lacanilao thinks that S&T development is just a matter of doing research properly and publishing one’s research outputs in ISI journals.

THE PERSPECTIVE OF THE SCIENCE-PUSH APPROACH...2

Also advocated by Dr. Camar Umpa of MSU who said that since GERD/GDP is correlated with per capita GDP then the Philippine government should increase its GERD/GDP to first world levels of at least 1.0% in order to attain first world per capita GDP levels This approach is, of course, based on the naive, simplistic view of the technological innovation process as a linear, pipeline model:

basic research ➙ applied research ➙ invention ➙ technology transfer ➙ technology commercialization

THE PERSPECTIVE OF THE SCIENCE-PUSH APPROACH...3

This Linear Model of the innovation process has two main pillars:
● The Bush belief that “basic research is the pacemaker of technological progress”

● The Bush assumption that “those who invest in basic science will capture its return in technology as the advances in science are converted into technological innovation”

These seem to imply that all basic research results will sooner or later find an application and become a product or process innovation.

THE PERSPECTIVE OF THE SCIENCE-PUSH APPROACH...4

These beliefs, however, either ignore or are ignorant of the realities, difficulties, and frustrations of the technological innovation process that students of Technology Management are very familiar with. The reality is that only around 10% of inventions pass the tests of technical and commercial feasibility to be considered as possible product ideas, only about 10% of product ideas are successfully commercialized into product innovations, and only about 10% of commercially launched products become successful in the market.

THE PERSPECTIVE OF THE SCIENCE-PUSH APPROACH...5

In the Philippines, the Department of Science and Technology (DOST) is the principal government agency that has implementing the “Science-Push” approach for the past 51 years through its focus on the development the National S&T Supply Subsystem. Of course, the DOST has also been striving to address the problems and needs of the National Technology Transfer Subsystem and the National Production Subsystem (as demonstrated, for example, by its Technology Incubation for Commercialization Program or TECHNICOM), but it has not made much headway in transforming the other parts of the national S&T system.

THE PERSPECTIVE OF THE SCIENCE-PUSH APPROACH...6

In early 2007, a joint Congressional Commission on Science and Technology and Engineering (COMSTE) was created for the purpose of creating or repealing laws so as to make the country competitive in S&T. COMSTE, however, has also been focusing on ways of developing the National S&T Supply Subsystem and the National Technology Transfer Subsystem without intending to change the economic ideology and policies of the National Production Subsystem. Thus, COMSTE is another example of a “Supply-Push” agency that can easily be predicted to be another superfluous exercise in futilty.

THE PERSPECTIVE OF THE SCIENCE-PUSH APPROACH...7

Studies of Brazil and Mexico by Eduardo Viotti show that a country can have a high world share of ISI publications and a small share of USPTO patents, contrary to what would be expected from the Science-Push approach. South Korea provides a good counterexample to the Science-Push approach because, as pointed out by Linsu Kim, “research was not relevant to Korea’s Industrialization through the 1970s.” The Science-Push approach can at most be wasteful of resources but it is not as pernicious as the Market-Pull approach that I will discuss next.

The “Market-Pull” Approach

THE PERSPECTIVE OF THE MARKET-PULL APPROACH...1

The “Market-Pull” approach holds that the solution to the underdevelopment of our country’s economy and S&T is to make all economic, business, and technology decisions conform to market needs, problems, and opportunities and to comparative advantages. This is the approach advocated by mainstream (neoclassical, neoliberal) economists and favored by most businessmen and merchants. It is also the basic approach that has been adopted by successive Philippine governments for the past 24 years since 1986.

THE PERSPECTIVE OF THE MARKET-PULL APPROACH...2

The “Market-Pull” approach is based on two pillars of neoclassical economics: ● The Principle of Comparative Advantage, which holds that a firm, industry, or country should specialize on production systems that can make maximum use of its current endowments or its comparative advantage

● Neoliberalism or the Washington Consensus, which advocates free trade, free enterprise, free markets, FDI liberalization, deregulation, privatization, and minimal government intervention in the market.

THE PERSPECTIVE OF THE MARKET-PULL APPROACH...3

The application of these two pillars of neoclassical economics to the selection, acquisition, and exploitation of technology is known as technoliberalism. Technoloberalism 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, when it is easier and more cost-effective to buy or lease the technology.

THE PERSPECTIVE OF THE MARKET-PULL APPROACH...4

Technoliberalism is the reason behind the NPC’s unwillingness to emulate KEPCO and to design and produce its own power plants and power equipment and its continuing addiction to the importation of power plants through turnkey projects. Technoliberalism is the reason why most Filipinoowned firms have remained technologically backward and dependent, have continued to be mere users and importers of foreign technology, and have not attained technology-based global competitiveness.

THE PERSPECTIVE OF THE MARKET-PULL APPROACH...5

It is technoliberalism that has been preventing our economy from industrializing, making our economy stagnant, and allowing our neighbors overtake us. But Dr. Bernardo Villegas, one of the chief proponents of neoliberalism in the Philippines, has blamed our country’s continuing underdevelopment on the antimarket, protectionist, import-substituting policies adopted by the government for 30 years since 1945. Yet he ignores the fact that neoliberalism has held sway in our country for the past 24 years since 1986 which was also the period when we were overtaken by Malaysia, Thailand, Indonesia, and China.

THE PERSPECTIVE OF THE MARKET-PULL APPROACH...6

Technoliberalism is confuted by the fact that its adoption by our country has kept our economy and S&T underdeveloped while its rejection by Japan, South Korea, Taiwan, China, 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.

THE PERSPECTIVE OF THE MARKET-PULL APPROACH...7

The ideological hegemony of Neoliberalism itself has been undermined by the consensus, among critics and proponents (e.g. J. Stiglitz, 2004, and Dani Rodrick, 2006), that the Washington Consensus is a failed recipe for economic development. Development economists are now working out a postWashington Consensus that appears to be more open to the rising alternative economic paradigm known as “innovation economics” and to the “East Asian Consensus” or what Lee and Mathews (2009) prefer to call the “BeST Consensus”, after Beijing, Seoul, and Tokyo.

The Vicious Circle of S&T Underdevelopment and Dependence

AN INTEGRATED FRAMEWORK FOR ASSESSING THE STATE OF PHILIPPINE S&T
VERY WEAK SUPPLY CONDITION NATIONAL S&T SUPPLY SUBSYSTEM ALMOST NON-EXISTENT LINKAGES EMBRYONIC NATIONAL TECHNOLOGY TRANSFER SUBSYSTEM VERY WEAK DEMAND CONDITION NATIONAL PRODUCTION SUBSYSTEM

 VERY FEW

• VERY FEW S&T LINKAGES

RESEARCHERS

AMONG ACADEMIA, GOV’T AND INDUSTRY • VERY FEW VERTICAL TECHNOLOGY TRANSFERS • VERY FEW TECHNOLOGY COMMERCIALIZATION PROJECTS

• VERY LITLE DEMAND FOR LOCAL TECHNOLOGY • STRONG ADDICTION TO TECHNOLOGY IMPORTATION
• LACK OF EFFORTS TO LEARN AND IMPROVE IMPORTED TECHNOLOGIES

• VERY FEW AND VERY POOR LABORATORIES
• VERY LITTLE FUNDING FOR RESEARCH

THE CONDITIONS AND RELATIONSHIPS OF THE SYSTEMS OF RESEARCH, TECHNOLOGY TRANSFER, AND PRODUCTION IN THE PHILIPPINES

AN INTEGRATED FRAMEWORK FOR ASSESSING THE STATE OF PHILIPPINE S&T
EXTERNAL BRAIN DRAIN

PHILIPPINE S&T SUPPLY SYSTEM
SCIENTIFIC DEPENDENCE

FIRST WORLD S&T SUPPLY SYSTEM

EMBRYONIC PHILIPPINE TECHNO TRANSFER SYSTEM

FIRST WORLD TECHNO TRANSFER SYSTEM

LOW VALUE-ADDED EXPORTS

PHILIPPINE PRODUCTION SYSTEM

FIRST WORLD PRODUCTION TECHNOLOGICAL DEPENDENCE SYSTEM

THE DEPENDENT STATE OF PHILIPPINE S&T

THE CENTRAL PROBLEM OF S&T IN THE PHILIPPINES...1

The adoption of technoliberalism has made our national production subsystem dependent on the import of foreign technologies and 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 S&T development. The underinvestment in S&T in turn has rendered local S&T underdeveloped and unable to meet the needs of local industry.

THE CENTRAL PROBLEM OF S&T IN THE PHILIPPINES...2

WEAK S&T RESOURCES & CAPABILITIES

LOW LEVEL OF PUBLIC & PRIVATE SUPPORT FOR S&T

CONTINUING SCIENTIFIC & TECHNOLOGICAL DEPENDENCE

WEAK EFFECTIVE DEMAND FOR LOCAL S&T

MACRO VIEW OF THE VICIOUS CIRCLE OF PHILIPPINE S&T UNDERDEVELOPMENT AND DEPENDENCE

THE CENTRAL PROBLEM OF S&T IN THE PHILIPPINES...3
LOCAL FIRM’S LACK OF DRIVE TO CONDUCT MOT, R&D AND TECHNOLOGICAL INNOVATION LOCAL FIRM’S BACKWARD TECHNOLOGIES AND LOW-LEVEL OF 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

MICRO VIEW OF THE VICIOUS CIRCLE OF PHILIPPINE S&T UNDERDEVELOPMENT AND DEPENDENCE

THE CENTRAL PROBLEM OF S&T IN THE PHILIPPINES...4

This has perpetuated a vicious circle of S&T underdevelopment and dependence, which is the central problem of national S&T development in the Philippines.
This enables us to explain why the DOST’s thrusts, policies, and programs have turned out to be seemingly ineffective and futile up to now.

THE CENTRAL PROBLEM OF S&T IN THE PHILIPPINES...5

For the past 51 years the DOST has been mainly and vainly trying to address the National S&T Supply Subsystem instead of simultaneously and holistically tackling the supply side, demand side and linkage part of the national problem of S&T underdevelopment.
Despite well-intentioned efforts, the DOST has been stymied by the government’s neoliberal policies from effecting changes in the S&T demand subsystem and linkage subsystem and breaking the country’s vicious circle of S&T underdevelopment and dependence.

The Technonationalist Catch-up Oriented Capability-Based Approach

THE TECHNONATIONALIST CAPABILITY-BASED APPROACH...1

The alternative approach that I have been advocating to solve our country’s central S&T problem ─ the vicious circle of S&T underdevelopment and dependence ─ is a technonationalist, capability-based, and catchup-oriented approach. It is based on technonationalism which seeks to advance a country’s technological capabilities to the highest levels, achieve S&T self-reliance and competitiveness, and uphold long-term national interests over comparative advantages on matters involving technology selection, acquisition, and exploitation.

THE TECHNONATIONALIST CAPABILITY-BASED APPROACH...2

It is “capability-based” because it gives first priority to building up the technological capabilities of Filipinoowned firms to global competitiveness and second priority to developing the research and inventive capabilities of academic and government laboratories. It is “catch-up-oriented” because it seeks to achieve economic and S&T catch-up, if not leapfrogging. Moreover, it follows more or less the “East Asian Consensus” or the “BeST Consensus” which has enabled East Asian countries to achieve rapid industrialization, technological catch-up, and economic progress.

THE TECHNONATIONALIST CAPABILITY-BASED APPROACH...3

As expounded by Keun Lee and John 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
2. Creating and relying upon the “pilot” or coordinating State agencies guide industrialization

THE TECHNONATIONALIST CAPABILITY-BASED APPROACH...4

Basic components of the “East Asian Consensus” (2) B. Setting into motion the process of capability enhancement
3. Arranging firms to access and leverage advanced knowledge 4. Promoting export-based engagement with the global economy to discipline firms and expand markets

5. Targeting industries/technologies for (initially importsubstituting) development
6. Sequential upgrading of the leading sectors and activities to secure dynamic comparative advantages

THE TECHNONATIONALIST CAPABILITY-BASED APPROACH...5

Basic components of the “East Asian Consensus” (3) 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

THE TECHNONATIONALIST CAPABILITY-BASED APPROACH...6

Therefore, in my view what our country needs to achieve rapid national economic and S&T catch up is for the government
► to discard its failed and discredited economic ideo-

logy of neoliberalism and the Washington Consensus,
► to adopt the capability-based, catch-up-oriented pre-

cepts of the “East Asian Consensus”, and

► to use the principles of technonationalism and techno-

logy management to transform our country’s vicious circle of S&T underdevelopment and dependence into a virtuous circle of world-class S&T self-reliance, excellence, innovativeness, and competitiveness.

The Technonationalist Catch-up Agenda

OUTLINE OF THE TECHNONATIONALIST CATCH-UP AGENDA...1

The technonationalist catch-up agenda aims to transform the vicious circle of S&T underdevelopment and dependence into a virtuous circle of world-class S&T self-reliance, excellence, innovativeness, and competitiveness through the adoption of a national S&T roadmap which intends to

Build up the National S&T Supply Subsystem to world-class levels in terms of human, financial, and infrastructural resources

Create a strong demand for local S&T within the National Production Subsystem
Develop a dynamic National Technology Transfer Subsystem

OUTLINE OF THE TECHNONATIONALIST CATCH-UP AGENDA...2

ACTIONS TO INCREASE THE DOMESTIC S&T DEMAND (1):

ESTABLISH AND DEVELOP INDUSTRIAL CLUSTERS IN EVERY DISTRICT AND PROVINCE OF THE COUNTRY.

► ►

LINK THESE CLUSTERS WITH GLOBAL VALUE CHAINS ESTABLISH CLUSTER-BASED/CLUSTER-DEDICATED R&D INSTITUTES
FORMULATE AND IMPLEMENT A NATIONAL TECHNOLOGY STRATEGY AND A NATIONAL TECHNOLOGY ROADMAP AND INSTITUTIONALIZE THE PRACTICE OF TECHNOLOGY MANAGEMENT AT MACRO AND MICRO LEVELS

OUTLINE OF THE TECHNONATIONALIST CATCH-UP AGENDA...3

ACTIONS TO INCREASE THE DOMESTIC S&T DEMAND (2):

USE STATE PROCUREMENT AND REGULATORY POWERS TO PROMOTE INTERNATIONAL STANDARDS FOR DOMESTIC PRODUCTS, PROCESSES, AND SERVICES ADOPT A SYSTEM OF INCENTIVES TO INDUCE THE MODERNIZATION AND CONTINOUS UPGRADING OF TECHNOLOGIES IN SMEs AND THE CONDUCT OF R&D IN LARGE FIRMS

OUTLINE OF THE TECHNONATIONALIST CATCH-UP AGENDA...4

ACTIONS TO IMPROVE THE DOMESTIC S&T SUPPLY (1):

IMPLEMENT A NATIONAL CRASH PROGRAM TO UPGRADE PHILIPPINE EDUCATIONAL INSTITUTIONS AND CURRICULA (ESPECIALLY IN SCIENCE AND TECHNOLOGY)AT ALL LEVELS TO GLOBAL STANDARDS IMPLEMENT A MASSIVE CRASH PROGRAM TO INCREASE THE QUANTITY AND QUALITY OF PHILIPPINE R&D SCIENTISTS, ENGINEERS AND TECHNICIANS TO MINIMUM INTERNATIONAL STANDARDS.

OUTLINE OF THE TECHNONATIONALIST CATCH-UP AGENDA...5

ACTIONS TO IMPROVE THE DOMESTIC S&T SUPPLY (2):

DEVELOP THE NATIONAL UNIVERSITY TO A WORLDCLASS RESEARCH UNIVERSITY AND CREATE AT LEAST ONE WORLD-CLASS DEPARTMENT IN EVERY MAJOR DISCIPLINE OF SCIENCE AND ENGINEERING
ENSURE MASSIVE PUBLIC AND PRIVATE INVESTMENTS IN R&D TO MEET THE U.N. TARGET OF 1% OF GDP FOR GERD DEVELOP A NATIONAL R&D SYSTEM THAT IS INTEGRATED WITH THE NATIONAL TECHNOLOGY ROADMAP AND THAT IS WORLD-CLASS IN TERMS OF PUBLICATIONS AND INVENTIONS GENERATED.

OUTLINE OF THE TECHNONATIONALIST CATCH-UP AGENDA...6

ACTIONS TO IMPROVE THE DOMESTIC S&T LINKAGES (1):

CREATE GOVERNMENT-ENDOWED CONTRACT R&D CORPORATIONS (SIMILAR TO GERMANY’S FRAUNHOFER SOCIETY) AND GRANT CORPORATE POWERS TO SOME OF THE EXISTING GOVERNMENT R&D INSTITUTES ENACT LAWS CREATING VENTURE CAPITAL FIRMS AND ENCOURAGING ACADEMIC INSITUTIONS AND GOVERNMENT R&D INSTITUTES TO TRANSFER THEIR RESEARCH OUTPUTS TO THE PRIVATE SECTOR

ESTABLISH UNIVERSITY-LINKED TECHNOLOGY BUSINESS INCUBATORS AND TECHNOLOGY PARKS

OUTLINE OF THE TECHNONATIONALIST CATCH-UP AGENDA...7

ACTIONS TO IMPROVE THE DOMESTIC S&T LINKAGES (2):

ENCOURAGE TECHNOLOGY ENTREPRENEURSHIP AMONG HIGH SCHOOL AND COLLEGE STUDENTS

ESTABLISH AN EXTENSIVE NATIONAL NETWORK OF INSTITUTIONS FOR TECHNOLOGY DIFFUSION, TECHNICAL EXTENSION SERVICES, AND ONLINE S&T INFORMATION SERVICES
ENCOURAGE AND SUPPORT COLLABORATIVE S&T PARTNERSHIPS AMONG GOVERNMENT, BUSINESS, AND ACADEMIA

THANK YOU! AND
GOOD DAY!

Sign up to vote on this title
UsefulNot useful