Government News Analysis

The R&D league

2017 Global Innovation Index R&D ranking
2017 Global Innovation Index R&D ranking

For some Southeast Asian emerging economies, research and development (R&D) – at least where investing in it is concerned – remains a relatively low priority. In fact, reducing development costs is generally a more pressing goal. And yet there’s a building awareness right across this region for the need to innovate. Like no time before, governments are pursuing more and more initiatives in an effort to gain competitive advantage over their neighbours.

But for some, laying out cash from the national purse to invest in ideas – which may or may not be successful – requires an additional leap of faith. And right now, it seems certain economies are just dipping their toes in the water to test the temperature.

So how well is the Philippines doing in this regard? The 2017 Global Innovation Index gives us a pretty good insight in the ‘Human capital & research’ category sub-section which deals with ‘Research & development’.

The world R&D rankings on the index for eight Association of Southeast Asian Nations (Asean) states – Laos and Myanmar were not surveyed – are as follows: Singapore, 11th; Malaysia, 35th; Thailand, 40th; Indonesia, 63rd; Philippines, 64th; Vietnam, 80th; Brunei, 115th; Cambodia, 115th. So the Philippines comes exactly half way in a list of 127 countries world wide – which on the surface is a respectable showing.

Historically though, R&D has always been underfunded in the Philippines. And it still is.
Now let’s turn to one of the elements of that result, ‘Gross expenditure on R&D, as a % GDP (gross domestic product)’. Here are the world rankings for rated Asean countries for that metric: Singapore, 15th; Malaysia, 29th; Thailand, 52nd; Vietnam, 73rd; Philippines, 96th; Indonesia, 105th; Brunei, n.a.; Cambodia, n.a. That puts the Philippines in the bottom third of the world league. In short then, its low spending on R&D handicaps its overall performance as an innovator.

Historically though, R&D has always been underfunded in the Philippines. And it still is. In 2002, the country spent just PHP4.5 billion on R&D – a slender 0.11% of that year’s GDP. Today, the biggest by far recipient of the government budget allocation for R&D is the Department of Science and Technology (DOST) which received an R&D grant of PHP5.8 billion for this year. Those figures, then, speak for themselves.

According to the United Nations Education, Scientific and Cultural Organization (or, UNESCO) developing countries should have an R&D budget of no less than 0.3% of GDP. The Philippines has never come close to that. Meanwhile, Singapore, Malaysia, Thailand and Vietnam have been steadily increasing their research-and-development investments.

Certainly, there’s a will within the present administration to build the R&D sector. National Economic and Development Authority secretary, Ernesto Pernia, has said R&D activities in the Philippines should be raised to be on par with Asean neighbours and become an “active player” in the knowledge-based economy globally. 

there’s a tremendous amount of latent innovative talent just waiting to be tapped in the Philippines.

And so it should; there’s a tremendous amount of latent innovative talent just waiting to be tapped in the Philippines. But that takes money. Of course, the private sector runs its own R&D programmes, often funded by large multinationals. But these are geared largely to commercial goals and don’t necessarily directly benefit the economic sectors in which they operate.

Meanwhile, R&D cash received by the DOST will pursue the Harmonized National Research and Development Agenda – a six-year plan running from this year through to 2022. This will be spent across five sectors – the national integrated basic research agenda, agriculture; health; industry, energy and emerging technology; disaster-risk reduction and climate-change adaptation.  According to DOST the funding will be used to address “inequality and provide more opportunities that will hasten our development”.

Certainly commendable goals. But to cover all that will mean that R&D will need to be spread very thin. And while it may push social progress to some local degree, it’s unlikely to make much of a mark in terms on global competitiveness. And even regional competitiveness for that matter. Nor will it take advantage of the pool of Filipino inventors, innovators and entrepreneurs operating outside those specified fields.