INCLUSIVE
INNOVATION
CONFERENCE
2 October 2018SOFITEL HOTEL
SEC. RAMON M. LOPEZDepartment of Trade and industry
Source: World Development Indicators, The World Bank
Macro Performance
• Amid economic & global uncertainty, PH grew 6.4% from 2010 to 2017• 2017: China 6.9%, Vietnam 6.8%, Philippine 6.7%, Malaysia 5.9%, Indonesia 5.1%,
Thailand 3.9%• PH: 2018 Q2 growth: 6%, 2018 H1 growth: 6.3%
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
CHN IDN MYS PHL THA VNM
GDP Growth in %
High industry growth driven by manufacturing
-20
-10
0
10
20
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
Industry Growth in %
CHN IDN MYS PHL THA VNM
7.08.6
11.914.4
0.0
10.0
20.0
2016 2017
Manufacturing Growth, Selected Asian Countries (%)
China India Indonesia Malaysia Philippines
PH experiencing a manufacturing resurgence
• rising costs in China; growing domestic market, growing middle class, good macro
performance; young English speaking workforce
• 2018 Q2 growth: 5.6%, 2018 H1 growth: 6.6%
Period Manufacturing Services Agriculture, fishing, forestry
2000-2009 3.2 5.2 3.2
2010-2017 7.6 6.7 1.4
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
20
10 Q
1
20
10 Q
2
20
10 Q
3
20
10 Q
4
20
11 Q
1
20
11 Q
2
20
11 Q
3
20
11 Q
4
20
12 Q
1
20
12 Q
2
20
12 Q
3
20
12 Q
4
20
13 Q
1
20
13 Q
2
20
13 Q
3
20
13 Q
4
20
14 Q
1
20
14 Q
2
20
14 Q
3
20
14 Q
4
20
15 Q
1
20
15 Q
2
20
15 Q
3
20
15 Q
4
20
16 Q
1
20
16 Q
2
20
16 Q
3
20
16 Q
4
20
17 Q
1
20
17 Q
2
20
17 Q
3
20
17 Q
4
20
18 Q
1
20
18 Q
2
Quarterly Growth in %
AGRICULTURE, HUNTING, FISHERY & FORESTRY SECTOR MANUFACTURING SERVICE SECTOR GROSS DOMESTIC PRODUCT
39.6%
Steady export growth and BOI Approved Investments
Merchandise Exports
10.13%higher than 2016
2017: US$63.23 billion
14.1%
higher than 2016
2017: US$35.605
Service Exports
Electronic, other manufactured
goods, equipment, metal
components, ignition and other
wiring sets
other business services as top
export with 47.4% share of total
exports
The Philippines: One of the
Best Performing Economies in Asia
Philippines is the BEST COUNTRY to invest in Manufacturing
30.1
4th Industrial Revolution: impact on industries
• spur development of new production techniques & business models that would transform global production systems
• drive new, more distributed & connected value chainso trigger selective reshoring,
nearshoring & other structural changes in GVC
o certain skills & capabilities will be required at each stage of the GVC
• add another layer of complexity to the challenging tasks of developing globally competitive industrieso put at risk the viability of low cost
manufacturing & services exports as source of growth & development
Mechanization
via water &
steam power
Mass
production via
assembly line &
electricity
Automation
through
electronics &
information
technology
Cyber-
physical
systems
18th
CenturyLate 19th
Century
20th
Century
2010
Onwards
Securing the Future of Philippine Industries
Innovation is at the front & center of our new industrial policy
Underlying Framework of PH industrial strategy
COMPETITION- INNOVATION-PRODUCTIVITY NEXUS
Innovation Entrepreneurship
ProductivityCompetition
New Industrial StrategyGLOBAL & DOMESTIC CONTEXT
➢ Build innovation & entrepreneurship
ecosystem
-> upgrade & develop new industries
➢ Remove obstacles to growth
-> attract investments, create jobs
➢ Strengthen domestic supply chains &
participation in global/regional value chains
-> link manufacturing with agriculture & services
Role of Government: address coordination & market failures; create proper
environment for private sector growth
New Industries,
clusters: supply/value
chain gaps; domestic &
export market; trade &
investment promotion;
incentives
Human Resource
Development
upgrading education
curricula, skills training
programs, improving
digital skills
Innovation &
Entrepreneurship
: government-
academe-industry
linkage, market-
oriented research;
R&D centers,
innovation
incentives; shared
facilities & support
for startups,
regional inclusive
innovation hubs
MSMEs: access to
finance, markets,
skilled labor,
technology
7Ms: mindset,
mastery, mentoring,
money, machine,
market, models
Ease of Doing
Business:
simplification of
processes,
automation; power,
logistics,
infrastructure
New
industr
ies
clu
ste
rs
Hum
an r
esourc
e d
evelo
pm
ent
Ease o
f doin
g
busin
ess
MS
ME
, sta
rt-u
p d
evelo
pm
ent
Innovation &
entr
epre
neurs
hip
C O N N E C T E D CREATIVE COMMUNITIES
GovernmentAcademe
Industry
Strong government-academe-industry collaboration
Top 12 Priorities for Both Domestic & Export Markets
Electrical & Electronics
Auto & Auto Parts
Aerospace Parts
Chemicals
Shipbuilding
Furniture, Garments
Tool & Die, Iron
& Steel
Agri-business
IT BPM, E-Commerce,
Creative
Innovation, R&D,
Climate change
Transport, Logistics,
Construction, Tourism
Parts & Components Supply
Criteria: Hi-technology, innovation/R&D, infrastructure, regional imbalance, labor-intensity,
sustainability, spill-over/multiplier effects, value/supply chain linkage
I. coffee, cacao, processed
fruits, processed meat,
tourism
II. processed fruits, processed
meat, coffee, furniture, cacao,
agribusiness
III. bamboo, furniture, aerospace,
processed meat, shipbuilding,
aerospace
IV-A. auto, electronics,
petrochemical, IT-BPM,
chemicals, aerospace
IV-B. seaweed, tablea,
rubber, coco coir, tourism
V. metal casting, coco
coir, health care,
agribusiness
VI. processed meat,
processed shrimp, tourism
VII. seaweed/carrageenan, dried
mangoes, furniture, IT-BPM,
shipbuilding, tourism
VIII. processed meat, copper,
processed marine, processed fruits,
natural health, agribusiness
IX. Rubber & rubber prods,
coconut & coconut prods, fish &
fish prods, mango & mango
prods, seaweed & seaweed prods
X. rubber, bamboo, cacao, coco
coir, coffee, agribusiness, tourism
XI. processed meat,
seaweed/carrageenan, cacao/tablea,
agribusiness, tourism
XII. rubber, palm oil, processed
fish/aquamarine, tourism,
agribusiness
XIII. processed marine, palm oil,
rubber, agribusiness
CAR: coffee, processed
vegetables, aerospace,
electronics, tourism
ARMM: coffee, rubber, cacao,
palm oil, agribusiness
Regional Industry Priorities
I N C L U S I V E
F I L I P I N N O V A T I O N &
E N T R E P R E N E U R S H I P R O A D M A P
B R I D G I N G T H E G A P S ,
S E T T I N G T H E
M I L E S T O N E S
Innovation Journey: November 2016 to present
Need to craft an
innovation strategy
DTI & DOST should
lead the roadmap
formulation
2016 Manufacturing
Summit
DTI-DOST MOU
STRIDE: Innovation
assessment
Voices from the
Regions: FGDs
Validation workshops
Filipinnovation &
Entrepreneurship
Roadmap
2017 Innovation Conference
Research,
IPR
Inclusive
Innovation &
Entrepreneurshi
p Ecosystem
Vision: Inclusive Innovation & Entrepreneurship Ecosystem
• Strong
collaboration:
connected
country
• Strong business
& policy
environment:
innovation, jobs,
investment
• Creative talent
pool
• Incubation of
innovation
• Academe industry
partnerships to
conduct basIc,
applied, market
oriented research
• Support by
government &
funders
• Involve
researchers &
experts &
industries across
the country
How do we
create an inclusive
innovation &
entrepreneurship
ecosystem?
hard & soft
infrastructure,
acceleration of
commercialization:
incentives, enabling
environment
entrepreneurial
culture, support for
start-ups: mentors,
advisors, incubators,
accelerators,
professional services
How to make SMEs
innovative
relationships,
market driven
research, job-
ready
graduates,
entrepreneur-
specific
trainings
Family & friends,
private equity,
venture capital,
angel investors,
access to capital
HRD for innovation,
innovation-ready
workforce: technical &
management talent
Position
innovative
industries for
rapid growth
Innovation
Policy &
Commercialization
Skilled
Workforce
Industry
Clusters
Government-
Academe-
Industry
Entrepreneur-
ship, startups
SMEs
Funding &
Finance
1
2
3
4
6
5
INNOVATION & ENTREPRENEURSHIP ECOSYSTEM
Accelerators/Incubators/
Innovation hubCo-Working
spaces
Support Organizations/
Communities
Events
Meetups
Service
Providers
Universities
Large, Small,
Medium
Enterprises,
Start-ups
Government
Funders
Regional Inclusive Innovation Centers (RIICs)
• Regional & local inclusive innovation hubs: cornerstone of i3S, lie at the heart of our economic transformation
• Bridge gap between industries & academe
• Create regional ecosystem: virtual & physical made up of universities, R&D labs, S&T parks, incubators, fab labs, co-working spaces, investors, & LGUs, start-ups, SMEs, LEs
• DOST & other agencies, industry, & academe
• Innovation focus on electronics, auto, aerospace, chemicals, IT-BPM, agribusiness
R&D Labs,
S&T Parks
Expand DOST-DTI Innovation MOUMarket-oriented research grants,
R&D, commercialization support
To promote collaboration & closer coordination within
government
Physical
innovation
infrastructure
Market-oriented research
grants, commercialization
support
Innovation policy
monitoring
evaluation
of implementation
Coordinator linking
industries with academe
& other government
agencies
support for
innovation & R&D;
DILG: LGUs
Market-oriented research
grants: commercialization
support, HRD & curricula,
balance between automation &
labor intensive activities
Securing the Future of Philippine Industries
RIICs and Innovating the 7Ms
CALL TO ACTION
The ultimate goal of the Inclusive Filipinnovation and
Entrepreneurship Roadmap is to activate innovation and
entrepreneurship as the main levers to reduce, if not
completely eliminate poverty in the country. Let us all work
together to make this happen.
“Kaya natin yan!”
Thank you!
INCLUSIVE
INNOVATION
CONFERENCE
2 October 2018SOFITEL HOTEL
SEC. RAMON M. LOPEZDepartment of Trade and industry