RESEARCH & DEVELOPMENT (R&D) IN THE PHILIPPINES

DEFINITION AND IMPORTANCE OF R&D

 Research and Development (R&D) plays a crucial role in economic growth by improving productivity and
innovation.
 It influences the economy through technological advancements, better production methods, and efficiency.

APPROACHES TO ECONOMIC GROWTH

Increasing factor inputs: Expanding resources such as labor, land, and capital.
Example: Utilizing idle arable land for agriculture.
 Drawback: Subject to diminishing returns.
Improving productivity through innovation: Using better technology, production methods, and management
strategies.
 Leads to higher efficiency and economic progress.

TECHNOLOGICAL INNOVATION AND ECONOMIC GROWTH

Mutually reinforcing relationship: Innovation leads to better productivity, which further encourages R&D.

Phases of innovation:
 Introduction of new technology → better quality products & reduced production costs.
 Mass production & economies of scale → increased demand.
 Higher income levels → demand for improved technology → cycle continues.
Technology transfer: Backward countries can catch up by adopting advanced technologies through investments in
education, infrastructure, and R&D.

HISTORICAL DEVELOPMENT OF R&D IN THE PHILIPPINES

Early American Colonial Period (Late 19th Century) 1986 Onwards

Bureau of Science established for agriculture, health, and DOST (Department of Science and Technology)
food processing. formed after the EDSA Revolution.
Industrial technology development was neglected due to Technology Application and Promotion Institute
colonial policies. (TAPI) established to commercialize technology.
Education System: Public schools and UP system
established, including S&T-related agencies.
Science Education Institute (SEI) & Science and
Technology Information Institute (STII) created to
Post-Independence Era (1946) promote S&T education.
Institute of Science created under the Office of the
President. Late 1980s - 1990s
Challenges: Lack of support, coordination, and planning. Massive technology transfer & commercialization of
R&D.
1950s-1960s Science parks & technology business incubators
Focus on S&T capacity building (research agencies, established to encourage innovation.
manpower development)
Lack of research direction: No clear goals for 1998 and Beyond
commercialization of outputs. Presidential task force on S&T formed to address
R&D issues.
1970s-1980s Science and Technology Agenda for National
Shift towards applied research & commercialization Development (STAND Philippines 2000)
of R&D. implemented.
National Science and Technology Authority (NSTA) DOST’s Medium-Term Plan (1999-2004): Focus on
created to promote innovation. competence, competitiveness, and conscience.
S&T Council System formed to develop policies.

KEY S&T SECTORS FOR INDUSTRIAL DEVELOPMENT

15 Leading Edges Identified (1989 Presidential Task Force Report):
 Aquaculture & Marine Fisheries  Construction Industry
 Forestry & Natural Resources  Information Technology
 Process Industry  Electronics
 Food & Feed Industry  Instrumentation & Control
 Energy  Emerging Technologies
 Transportation  Pharmaceuticals

R&D GAPS AND CHALLENGES IN THE PHILIPPINES

Lack of funding and investment in R&D.
Weak collaboration between industries and research institutions.
Limited commercialization of research outputs.
Need for better policies and stronger institutional support

THE TECHNOLOGY PERSPECTIVE IN INNOVATION

KONDRATIEFF WAVES (1984)

➢ Nikolai Kondratieff proposed that economies experience long-term cycles lasting around 60 years.
➢ These cycles include periods of prosperity and economic growth, followed by economic downturns and disruptions.
➢ Kondratieff suggested that major technological advancements align with these cycles but did not definitively state
a cause-and-effect relationship.

Does the presence of new technology increase the likelihood of war?

 • Not necessarily. While technological advancements can enhance military power, conflicts are primarily driven by
political, economic, and social factors. However, new technologies can intensify the destructiveness of war.

Do wars accelerate technological discovery, advancement, and diffusion?

• Yes, wars often propel rapid technological advancements as nations prioritize military innovation (e.g., radar,
nuclear energy, jet engines). After the conflict subsides, these innovations frequently find applications in civilian life,
transforming industries like communication, navigation, and medicine (e.g., the internet, GPS).

Is there an interrelationship between war and technology?

• Yes, there is a reciprocal relationship. Technological advancements can reshape warfare (e.g., nuclear weapons),
while wars prompt nations to invest in cutting-edge technologies for strategic advantage. Ultimately, these
innovations contribute to broader industrial and economic development.

JOSEPH SCHUMPETER (1883-1950)

 Schumpeter was an economist and one of the 20th century’s greatest intellectuals.
 He introduced the concept of "Creative Destruction", which explains how new innovations replace outdated
industries, leading to economic progress.
 His theories highlight the role of entrepreneurs in driving innovation and economic development.

PRODUCT PERSPECTIVE IN INNOVATION

LITERATURE REVIEW
 Emphasizes the product as the focal point in innovation studies.
 Highlights the significant contributions of books, which have informed later journal-based discussions.

MODELS OF INNOVATION
A. Dual Model of Innovation (Tornatzky & Fleischer, 1990)
 Recognizes product innovation and process innovation as interconnected dimensions.

Product Innovation
 Focuses on creating new or enhanced products with improved features, functionality, or benefits.
 Involves steps like R&D, design thinking, prototyping, testing, and iteration.
 Examples:
o New smartphone models with advanced cameras.
o Development of self-driving vehicles.
Process Innovation
 Concentrates on improving methods or workflows for greater efficiency, cost reduction, or productivity.
 Examples:
o Automation in manufacturing (e.g., robotic assembly lines).
o Enhanced supply chain management systems for optimized logistics.

PRODUCT-PROCESS MODEL (UTTERBACK, 1994)

 Explores the evolving relationship between product and process innovations over time.

DIFFUSION OF INNOVATION (ROGERS, 1995)

 Explains how innovations are adopted within a population. Categories of Adopters:
1. Innovators (2.5%): Risk-takers and pioneers.
2. Early Adopters (13.5%): Respected leaders who validate innovations.
3. Early Majority (34%): Wait for proven reliability before adoption.
4. Late Majority (34%): Skeptical adopters; embrace innovation when widely accepted.
5. Laggards (16%): Highly conservative; adopt only when necessary.

USER-DRIVEN INNOVATION (VON HIPPEL, 1988)

 Recognizes users as a vital source of innovation.
 Modifications and feedback from users can shape a product’s development.
 Example: Evolving social media features influenced by user interaction.

HISTORICAL DEVELOPMENT OF R&D AND TECHNOLOGY IN THE PHILIPPINES

EARLY AMERICAN COLONIAL PERIOD (LATE 19TH CENTURY)

 Establishment of the Bureau of Science, focusing on agriculture, health, and food processing.
 Development of a public school system and the University of the Philippines (UP) to train Filipino scientists.

POST-INDEPENDENCE ERA (1946)

 Transition of the Bureau of Science into the Institute of Science under the Office of the President.
 Challenges included poor support, planning, and coordination, limiting its economic impact.

1950S–1960S
 Emphasis on capacity building in science and technology (S&T).
 Lack of planning led to fragmented research efforts.

1970S–1980S
 Shift to applied research and practical applications.
 Formation of the National Science and Technology Authority (NSTA) to align policies and goals.

POST-EDSA REVOLUTION (1986 ONWARDS)

 Reorganization of NSTA into the Department of Science and Technology (DOST).
 Creation of agencies like the Technology Application and Promotion Institute (TAPI) for commercialization, and
the Science Education Institute (SEI) to promote S&T education.
LATE 1980S–1990S
 Focus on technology transfer, commercialization, and R&D application.
 Development of initiatives like science parks and technology business incubators to foster innovation.

1998 AND BEYOND

 Introduction of policies like the Science and Technology Agenda for National Development (STAND Philippines
2000).
 Launch of the DOST Medium-Term Plan (1999–2004) centered on competence, competitiveness, and conscience.

GAPS IN PHILIPPINE R&D AND TECHNOLOGY

PHILIPPINE R&D IN THE GLOBAL CONTEXT

 According to Cororaton (1999), the Philippines ranks low in R&D efforts globally.
 In developed countries, private industries lead R&D funding, unlike in the Philippines, where investment remains
minimal.
Challenge: Encouraging private sector participation through incentives and safeguards.

NATIONAL-LEVEL R&D GAPS

 Insufficient investments in R&D and limited skilled manpower.
 Institutional weaknesses caused by poor leadership and delayed fund disbursement.
 Lack of policies to support infrastructure and private-sector collaboration.

SECTORAL GAPS IN PHILIPPINE R&D

A. Agriculture
 Public research spending is only 0.3% of gross value-added, far below international standards.
 Issues include resource misallocation, regional neglect, and limited funds for impactful research.

B. Fisheries
 Problems include overfishing, environmental degradation, and pollution from industrial and agricultural waste.
 R&D is critical to reversing fish stock decline and ensuring sustainability.

C. Institutional Gaps
 Weak coordination among government agencies, insufficient skilled manpower, and low investments.

D. Education and R&D Manpower

 Few graduates specialize in science and engineering despite local industry needs.
 Causes include a weak basic education system, outdated teacher training, and the low prestige of teaching careers.

KONDRATIEFF’S LONG WAVES AND TECHNOLOGY’S ROLE IN ECONOMIC CYCLES

Kondratieff’s (1984) theory of long waves identifies recurring 60-year economic cycles characterized by alternating
periods of prosperity and disruption. He connected these cycles to major technological advancements but, due to
political suppression in Soviet Russia, was unable to fully establish cause-and-effect relationships. His work raises critical
questions about the interplay between technology and conflict:
1. does new technology increase the likelihood of war
2. do wars accelerate technological innovation
3. is there a cyclical relationship between them?

Schumpeter expanded on Kondratieff’s theory by incorporating entrepreneurship into his analysis of economic
cycles. In Business Cycles (1939), he described three distinct cycles:
 Short-term cycles (Kitchin, 40 months): Linked to fluctuations in inventory and interest rates.
 Medium-term cycles (Juglar, 10 years): Driven by changes in investment.
 Long-term cycles (Kondratieff, 60 years): Centered on technological revolutions.

From a technology management perspective, the long wave is particularly significant as it highlights the transformative
role of innovation on economic systems. Together, Kondratieff and Schumpeter illuminate the intricate relationships
among technology, entrepreneurship, and economic evolution.

TECHNOLOGY’S ROLE IN ECONOMIC WAVES AND SOCIAL CHANGE

Schumpeter identified three primary Kondratieff waves driven by technological progress:
1. The Industrial Revolution (1780–1842): Marked by advancements in mechanization and manufacturing.
2. Steam and Steel Technology (1842–1897): Characterized by the rise of heavy industry.
3. Electricity, Chemistry, and Motors (1898–mid-20th century): Enabled widespread industrial and consumer
applications.
Additional waves have been proposed:
 Fourth wave: Oil, electronics, aviation, and mass production.
 Fifth wave: Semiconductors, fiber optics, genetics, and software (The Economist, 1999).
Schumpeter observed that each Kondratieff wave brings unique innovation opportunities. Over time, these opportunities
diminish, prompting entrepreneurs to shift their focus to innovations emerging from the next wave.

Understanding Technology involves two key purposes: increasing knowledge and applying this understanding to problem-
solving. Basic science focuses on expanding knowledge without requiring immediate practical applications (e.g., exploring
atomic structures), while applied science and technology translate this knowledge into practical uses (e.g., developing
smartphones). Technology, distinct from science, does not necessarily increase knowledge but must provide tangible
benefits or solutions. Conversely, science prioritizes increasing understanding, whether or not it offers practical advantages.

Defining Innovation highlights change that is new or novel to an individual or organization, with "newness" as a critical
element. This distinguishes innovation from general change by emphasizing novel solutions, ideas, or advancements.
Technology and innovation management face challenges due to their interdisciplinary nature, which spans traditional
boundaries, creating isolated communities within the field. Bridging these gaps requires exploring frequently cited works to
connect these communities and foster collaboration. Acknowledging the differences in perspectives and foundational
principles enriches the dialogue but can also create barriers to unified understanding.
The historical roots of innovation and technology management can be traced back to Plato’s The Republic (360 BC).
Here, the concept of techne—the art of work—represents the skills an artisan develops to excel in their specialized craft,
whether making a vase or jewelry. These non-codified, creative skills are distinct and often lacking in others.
In earlier years, the field of economics dominated the writings on technology innovation management. Economists like
Schumpeter, Kondratieff, and Kuznets often treated technology as a means to understand changes in economic growth
and structure. For instance:
 Schumpeter highlighted technological innovation as a driver of creative destruction, reshaping industries.
 Kondratieff analyzed economic cycles, tying technological progress to waves of growth and decline.
 Kuznets investigated how technology influenced economic development.

TRAJECTORIES IN TECHNOLOGY EVOLUTION:

1. Progression Along a Technological Trajectory:
o A technological trajectory represents the path of improvement or development within a specific technology.
Progression along such a trajectory often involves incremental innovations—refinements to existing
systems, processes, or products. This steady improvement is crucial for maintaining competitiveness and
enhancing performance over time.
2. Opportunities and Challenges in Jumping to New Trajectories:
o Opportunities: Jumping to a new trajectory (often enabled by disruptive innovation) offers firms the chance
to redefine markets, unlock new value, or gain competitive advantages. For example, shifting from fossil
fuels to renewable energy technologies opens up entirely new business opportunities.
o Challenges: Moving to a new trajectory can be risky and resource-intensive. It requires abandoning the
comfort of established systems, mastering new competencies, and sometimes cannibalizing existing
business models. Resistance to change from internal stakeholders or customers can also pose significant
obstacles.
3. Strategic Considerations for Firms in Technology Evolution:
o Timing: Firms must strategically decide when to invest in progressing along existing trajectories or shifting
to new ones. Being too early may lead to underdeveloped markets, while being too late risks losing to
competitors.
o Resource Allocation: Balancing investments between refining current technologies and exploring
emerging ones is critical.
o Capability Building: Developing the skills, infrastructure, and knowledge required to succeed in a new
trajectory is essential for ensuring a smooth transition.
o Market Signals