THE Global Innovation Index (GII) for the year 2020 was released on September 2 in Geneva, Switzerland, showing the Philippines rising to an overall ranking of 50th among 131 countries and economies. This was announced by the Department of Science and Technology (DoST) in its virtual presser on September 4.
The Philippines moved up remarkably from its previous GII ranking of 54th in 2019 and 73rd in 2018.
The 131 economies were classified into four income groups — high-income economies (49 countries), upper middle-income economies (37), lower middle-income economies (29) and low-income economies (16). The Philippines was lumped together with 28 others in the lower middle-income economies.
Who will finance innovation?
The GII 2020, with this year’s theme of “Who Will Finance Innovation?” is the result of a collaboration between Cornell University, Instead and the World Intellectual Property Organization (WIPO) as co-publishers, and their Knowledge Partners.
(WIPO is the global forum for intellectual property [IP] services, policy, information and cooperation. It is a specialized self-funding agency of the United Nations. Insead is one of the world’s leading and largest graduate business schools. The name “Insead” originated as an acronym of Institut Européen d’Administration des Affaires.)
There are six key findings embodied in the GII 2020 report. First is that the “Covid-19 crisis will impact innovation — leaders need to act as they move from containment to recovery.” The second finding is that innovation finance declines during the current crisis, but there is hope that it will improve.
Another major observation is that “over the years, China, Vietnam, India and the Philippines are the economies with the most significant progress in their GII innovation ranking over time. All four are now in the top 50.” Likewise, stellar innovation performance was found in developing economies, and not held by high-income economies.
Fifth, “regional divides exist with respect to national innovation performance: Northern America and Europe lead, followed by Southeast Asia, East Asia and Oceania, and more distantly by Northern Africa and Western Asia, Latin America and the Caribbean, Central and Southern Asia, and Sub-Saharan Africa, respectively.” Lastly, innovation is concentrated at the level of science and technology clusters in select high-income economies, plus mainly China.
7 pillars of GII 2020
All the subject economies were ranked in seven different pillars. These rankings were then averaged to arrive at the overall GII rank. Though the Philippines has a ranking of 50th overall, it fared well only in two pillars — knowledge and technology outputs (26th) and business sophistication (29th).
The Philippines remained in the lower half for the rest of the pillars – institutions (91st), human capital and research (86th), infrastructure (63rd), market sophistication (86th) and creative outputs (57th).
The Philippines’ high ranking in technology outputs and business sophistication were brought about by the innovation outcomes produced by its businesses, with levels of outcomes that remain even above some high-income economies. The country is also considered to be well-integrated into global trade, ranking 1st in high-technology imports, 3rd in high-technology net exports, 8th in information and communications technology (ICT) services exports and 10th in creative goods exports. Among its highest-ranking indicators, its productivity growth ranks 6th and 7th in terms of firms offering formal training, and 8th in terms of registered utility models by origin.
This record-breaking ranking is considered by DoST as a testament that its efforts in spearheading science, technology, and innovation are bearing fruit. The DoST has strongly supported the growth of micro, small and medium enterprises through various science and technology (S&T) projects, making them highly competitive even on the global stage.
Clearly, S&T propped up the ranking of the Philippines. Technology outputs are hinged on S&T. Business sophistication depends entirely on the S&T platform it is running on. If this country wants to move further up the ladder of global innovation, then its implementation of the other pillars must be enriched. Emphasis should be placed on improving institutions and human capital and research.
The upgrading of institutions cannot be affected by the DoST alone, more so with human capital and research. The other departments of the executive branch must step up their game. As suggested by the WIPO, it should be a “whole government approach.”
GII as an economy’s metric
The GII should be used as an instrument by governments and economies in determining their policies and defining fiscal measures toward further innovations. In the context of the theme on who will finance innovation, the government should establish financial support mechanisms to address future technological innovations.
To emphasize again, innovations policy and GII matters should be a “whole government approach,” but it seems that this is not the case here in the Philippines.
Incidentally, the Philippine Innovation Act of 2019, approved sometime in April 2019, adopted the same “whole of government approach” (Section 17) and established the National Innovation Council (Section 6). What has this council done so far?
Ironically, DoST’s proposed budget of P36 billion for 2021 was slashed to only P23 billion. The approved lower budget is a mere 0.5 percent of the 2021 national budget.
Are we expecting a higher GII rank for 2021 then? Ask the budget makers.
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