Vol. XXVI, 4th Quarter
October –December 2008
Most stories on research and development (R&D) projects undertaken in the Philippines start well. Most don’t end well.
Take for instance the story of a promising scientist who worked in a government research facility and developed an eco-friendly and organically grown bacteria-based fertilizer.
It was considered a major breakthrough in agriculture and pest control because it had the potential to practically eliminate the need for chemical pesticides that local farmers have grown dependent to. This unique fertilizer is simple, cheap, and easily commerciable.
The scientist however never even considered earning profit from her creation, fearing it would be pirated if she introduces it to the market. But because of the “publish or perish” culture in her profession, she had to report her findings in peer-reviewed journals.
For a number of reasons, many Filipino scientists and researchers distrust the government’s ability to protect intellectual property rights (IPR) over their creative works. Some have limited knowledge on the benefits of IPR, while others presume that securing protection is not worth the time and cost. As a result, many fruits of public funded R&D went unprotected and even exploited by technology prospectors to their commercial advantages.
Policy and systems drawbacks
Recent studies indicate that the Philippines have yet to fully appreciate the significance of the National Innovation System (NIS) framework as a means to enhance the nation’s innovation performance and competitiveness. They also point out the country’s adherence to the outdated linear model of innovation as the main barrier toward attaining effective innovation process.
Ideally, any public funded R&D activity should generate new knowledge to advance current understanding in a particular field. The major challenge for R&D institutions and public incubators is to transfer and commercialize the new knowledge in fulfillment of government’s role as main facilitator of technology and knowledge diffusion.
The old linear model of innovation states that any technology generated will eventually be commercialized when it becomes fully developed and infused with generous financial capital. This implies, however, that any drive to diffuse developed technologies is limited by the availability and extent of investment.
The state of coordination among the partners in the system is another factor to consider. Often, linkages are not as responsive as desired. Upon closer review, the weakest link in the country’s innovation system was the process in transferring technology and know-how. This weakness bogs down the full realization of the fruits of public funded R&D. Addressing this shortcoming shall require a favorable policy environment.
A policy review by the Department of Science and Technology Technical Working Committee on Technology Transfer (DOST-TWC) in 2007 identified the NIS flaws such as weak public-private collaboration in R&D; weak technology transfer system; issues on technology ownership and information sharing; weak support to science and technology and lack of resources for technology transfer; weak IP culture; declining human capital in R&D; and policy setbacks.
Weak public-private collaboration in R&D
Public funded technology generation activities are often perceived to be unresponsive to industry needs. A 1998 study indicated that industries prefer to acquire technologies from sources other than public RDIs.
To be successful, the process of technology transfer and adoption should be built on earlier successes between suppliers (scientists and researchers) and adoptors like what developed countries already achieved through cooperative research initiatives.
To address this concern, a stronger public-private collaboration in the planning stages and in R&D agenda setting will prepare the partners for a thorough and productive technology transfer phase.
Weak technology transfer system
There is insufficient harmony and convergence of technology transfer policies and activities among stakeholders such as RDIs, government agencies, entrepreneurs, and venture capitalists. Some entities do not even have technology transfer policies/guidelines to follow.
Issues on technology ownership and information sharing
The absence of an institutional mechanism for technology transfer also hampers the establishment of technology ownership resulting from public funded R&D projects. This resulted to far divergent views on technology ownership. There are those who assume that technologies are public goods and should be made free for prospective users. Others oppose the granting of exclusive license for any technology generated using public resources as per accounting and auditing system currently followed. Because of shaky IPR tradition, many scientists tend to dislike negotiating or part with their creative works.
Weak support to S&T and lack of resources for technology transfer
Considering the comparatively limited government budget for S&T, public support remains inadequate. Latest DOST data shows expenditure on R&D for 2005 amounted to only 0.12 % of Gross Domestic Product (GDP) or way below the UN-prescribed 1% of GDP. This R&D investment pales in comparison with neighboring countries. (Table 1)
The Global Competitiveness Report for 2007–2008 revealed the poor state of RP’s innovation capability and technological absorption vis-à-vis other Asian countries and the rest of the world. Out of 125 countries surveyed, the Philippines ranked 69th in technological readiness. Meanwhile, Singapore ranked 2nd, Malaysia 30th, and Thailand 42nd.
In the area of innovation or the ability to produce new technologies, RP ranked 79th while Singapore ranked 11th, Malaysia 21st, Thailand 36th, and Indonesia 41st.
Limited number of R&D personnel
There are also inadequate R&D human resources that actually conduct research compared with other countries (Table 1). While the number of scientists, engineers, and technologists increased from 90 per million population in 2002 to 127 in 2005, it is still comparatively low based on the UNESCO’s standard of 380 per million population for developing countries.
Weak IP culture
Based on the experience of newly industrialized countries, it is critical to enforce a strict IPR regime to protect IP assets arising from R&D projects funded fully or in part by government agencies. In effect, a strict IPR regime leads to the commercialization of public funded R&D results.
The Philippines generates very few homegrown patents (about one per million population) compared to its Asian neighbors. The Intellectual Property Office Philippines reported a dip in local patents granted with only 15 local patents granted from a total of 1,653 granted in 2005, and only 28 out of 1,814 granted in 2007.
One possible explanation is that the country’s scientists and researchers have yet to fully grasp the importance of patent application and protection over their works. DOST and IPO Philippines had jointly conducted familiarization programs, which should be intensified.
In many developed countries, governments recognize that putting the outputs of public funded research in the public domain is not enough to generate social and economic benefits. For these governments, technology transfer and innovation policy are very much at the front and center of their economic development strategies.
Meanwhile, the apparent decline in the country’s innovation performance can be attributed to several constraints. At the DOST and public sector level, the extent and impact of technologies shared and transferred to small and medium enterprises (SMEs) at the national level have yet to be fully quantified and assessed.
Key policy options
Guided by the key lessons of the past, the country’s policymakers would be well advised to highlight greater cooperation among key players in the national innovation enterprise. As DOST puts it, “the key to making the Philippine NIS work for the Filipinos is to focus less and less on how individual institutions perform, but more and more on how they work together.”
The country must pursue an integrated innovation framework that emphasizes the factors that drive knowledge transformation into valuable products, processes, and services. This framework recognizes the importance of both technology push (input factors) and demand pull (output factors).
Another key intervention is to strengthen the system by removing the barriers that prevent stakeholders from working together for a common agenda particularly on integrated technology transfer. These key players are the public S&T institutions, higher education institutions, private sector, and even civil society. The main challenge lies in addressing structural weaknesses in the technology transfer process, and to provide the enabling mechanism to ease the flow of knowledge and technologies to industry in particular and the public in general.
By identifying and addressing key and immediate issues that hinder the country’s innovation progress, the Philippines can finally make the important step to achieve its innovation goals. The introduction of a legal framework for technology transfer that focuses on IPR coverage and stakeholder equity is viewed as the enabling platform to spur the transformation of public funded R&D outputs into new and mostly market driven applications.
The DOST-TWC on Technology Transfer recommends the following:
Technology transfer bill
House Bill 5208 also known as “An Act Promoting the Transfer of Technologies and Knowledge from Research and Development (R&D) Funded by Government” or the Technology Transfer Act of 2008 went through second reading in October 2008.
Editor’s Note: This policy brief is based on the technical paper “Enhancing Innovative Advantage of the Philippines Through Technology Transfer Policy”, presented by Rep. Joseph Emilio A. Abaya during the ASEAN Science and Technology Week (ASTW) Scientific and Technical Conference held on 3–4 July 2008 at the Sofitel Philippine Plaza, Pasay City. Rep. Abaya chairs the House Committee on S&T.