
Moving from Desire to Will
By Molly Dix, Innovation Advisor
Innovation Ecosystems: So easy to understand and so hard to empower.
The juxtaposition of industry and poverty was hard to miss as we drove out of metro Manilla, Philippines, to visit high-tech[1] companies in various PEZA[2] economic zones. We bounced along broken streets, passed trash, abandoned cars, and feral animals, until we went through a gate and into a typical industrial park. The security to enter the many business parks and businesses that we visited punctuated the two worlds. My job is to help technology improve lives by creating jobs and enabling a higher quality of living. In this role, I have visited companies in the US, EU, Asia, and the Middle East. Never before has the “barrier to entry” been so real; I needed a driver, an escort and a translator, and still, almost every appointment took multiple calls or attempts to be able to park and enter the facility. All this whilst having come with an introduction and appointments with high-level executives, including CEOs and GMs. The wall between the two worlds is both physical and societal.
As a researcher and innovation practitioner, I always feel fortunate when I am afforded the chance to learn about an industry, technology, geography, or person. Thus, my recent travels to the Philippines to help consider how to improve their economy by supporting their high-tech industry was truly a great opportunity. With support from the U.S. Agency for International Development’s STRIDE[3] program, I was given access and time with many of the Philippines’ key organizations and individuals from industry, academia, and government. Over a 3-month span, my colleagues and I met with about 75 individuals who introduced me to the Philippines’ culture, business environment, and innovation ecosystem quandary. Interacting and immersing myself with the people and culture is essential because innovation starts with people. It requires human creativity, skills, and commitment.
My first-hand experience highlighted the passion the people of the Philippines have for driving innovation but quickly was outshown by the fact that the innovation ecosystem is broken.
The community and relationships that enable innovation are often described as an ecosystem because the synergies within natural ecosystems are a good parallel for the relationships between companies, universities, and governments that are needed to create and transfer knowledge and enable new products and businesses to improve economies and people’s lives.
Every interview and discussion I had, whether with a start-up, multi-national corporation, university professor, or civil servant, highlighted the passion and desire to see technology bring opportunity to the country. Building innovation capacity is about a community of people and their desire to drive forward with their collective capital. It is about how they come together to combine their social, business, and technological capabilities and foster trust to create value and bring about impact. The people in the Philippines’ innovation ecosystem, many of whom are not Filipino, want to drive innovation. They see the poverty in the country and the Philippines’ lack of competition with their regional neighbors as an opportunity. They see the need to leverage the local human talent that is not currently being utilized. They see the diaspora of Filipinos working overseas, who have left for better opportunities. The Philippines’ innovation ecosystem is willing but not able.
Other ecosystems are flourishing. Globally, investment in innovation is charging forward. Nations, regions, companies, and universities are building capacity to bring both incremental and disruptive technologies, and associated products, to the market. The time for driving innovation is now. The Philippines has the capabilities and resources to build an economy on innovation. It is time to leverage resources and capabilities and maximize efficiency. For the Philippines, innovation indicators like per capita GDP growth and Current Account Surplus as a percentage of GDP are positive, and indicate an economic foundation for innovation based on the Philippine’s current consumption economy. However, other indicators, like patent activity and ratings related to the ease of starting and operating businesses, show that change is needed to sustain growth based on new products. The high-tech sector is a key pillar in the Philippines’ future success, with high-tech exports being more than 50% of manufactured exports, which is higher than its ASEAN neighbors.
Before the Philippines can improve innovation, with support for the ecosystem in the form of policies or programs, it must first understand the needs of industry.
From our research, we conclude that the Philippines must
· increase R&D within its universities and companies, and with foreign research partners;
· bolster the local supply chain and stop the cycle of importing all materials and parts for manufacturing that then exports the product, which must be re-imported for purchase by the consumer;
· fortify shared R&D infrastructure with improved linkages between academia and industry so that real-world problems of global value are being solved, preferably of great value to the Philippines in areas like traffic, pollution, and energy efficiency; and
· offer professional support for start-ups including access to research, strategic advising, intellectual property management, business opportunity identification and analysis, and investment.
The Philippines is an amazing place, filled with wonderful people who want the best for their families and their country. To not only move the country forward, but to keep it from competitively sliding backwards, the current limitations in the functionality of the Philippines innovation ecosystem need to be addressed. The ecosystem players, including the government, companies, academia, and investors, need to improve the link between the knowledge economy (driven by research) and the commercial economy (driven by the marketplace). Further investment is needed to enable the tech industry to innovate, compete, and grow, with
· human capital, enabled by education, that considers design capabilities and today’s manufacturing needs and global consumers;
· more R&D and knowledge creation by enabling existing academia and industry with training and funding and attracting more foreign investment and capabilities for R&D;
· transfer of knowledge via start-ups or commercialization with existing companies; and
· quantified market needs to attract suppliers of materials and parts that are currently imported.
With innovation, success begets success.
With longer-term vision and commitment by all ecosystem players, the Philippines is poised to leverage human talent and gain innovation-led economic growth, which will then enable more talent to stay home — driving a virtuous cycle. My hope is that the willingness to improve will be the catalyst for much-needed change. We continue to work with the Philippines on efforts to drive innovation. If you have an opinion on needs or potential support options, or are interested in being involved, please reach out to me at dix@rti.org. We are holding a workshop in September in Manila to bring ecosystem leaders together and to consider and commit to actions and investments.

Ms. Dix has 30 years of experience advising and supporting clients in technology-driven innovation, market intelligence, commercialization, and partnerships. She works to improve the impact from technology investments for companies, universities, and governments globally.
[1] High-tech being focused on electronics, aerospace, and automotive-related companies.
[2] Philippine Economic Zone Authority is a government agency in the Philippines attached to the Department of Trade and Industry and created to help promote investments in the export-oriented manufacturing industry into the country by assisting investors in registering and facilitating their business operations and providing tax incentives.
[3] Science, Technology, Research, and Innovation for Development
