by Joel Cuello

The Philippines, based on the most recent 2015-2016 data published by the Commission on Higher Education (CHED), produces annually approximately 120,000 graduates in science, technology, engineering, agriculture and mathematics. What is clear is that there is currently no established Science and Technology (S&T) innovation ecosystem in place in the Philippines to gainfully employ the majority of these S&T graduates, perpetuating what has become a massive imbalance between the country’s growing S&T supply side and a persistently underdeveloped domestic S&T demand side. Certainly, the sustained development of the country’s S&T supply side is necessary in terms of improving science education, increasing the number science graduates, developing targeted R&D capacity, and cultivating innovation readiness. Developing the country’s S&T demand side, however, is urgently and critically imperative – and requires and is tantamount to building the country’s S&T innovation ecosystem, which entails incentivizing globally-linked S&T companies to conduct not only manufacturing but also R&D functions in the country, incentivizing the same companies to collaborate with local R&D institutions and research universities, linking the same companies with local supply and value-chain partners, attracting S&T foreign direct investments, linkages with the global market, etc. The Cuello-Rostow Stages of Economic Development – which consist of: (1) Agriculture + Mining (preconditions for take-off); (2) Manufacturing (take-off); (3) Manufacturing + R&D (drive to innovation); and (4) High-Tech Innovation/Knowledge-Based Value Creation (drive to sustained growth) – have been charting the upward development trajectory of each of the Philippines’ neighbors, including Japan, South Korea, Singapore, China, Thailand, Malaysia, Indonesia, and now even Vietnam. It is simply obligatory that the Philippines transition into the next development stage of “Manufacturing + R&D” to have the country in turn prepare and position itself for the next higher development stage of “High-Tech Innovation/Knowledge-Based Value Creation.” It is also the successful transitioning of the Philippines into Stage 3 of “Manufacturing + R&D” that will robustly equip the country for the Fourth Industrial Revolution. To make this happen, a concerted, deepened and strategic intragovernment cooperation is an absolute imperative among the Department of Trade and Industry (DTI), Board of Investments (BOI), Department of Science and Technology (DOST), Philippine Economic Zone Authority (PEZA), National Economic Development Authority (NEDA), and the Commission on Higher Education (CHED). The proactive cooperation of the country’s research institutions and universities is also indispensably paramount.