Survey finds local firms to be ‘innovation-active’

A Survey on Innovation Activities conducted by the Philippine Institute for Development Studies (PIDS) and the Department of Science and Technology (DOST) from January 2009 to June 2010 reveals that a majority of Philippine companies are investing in innovation to keep themselves competitive.

The survey covered 1,824 business establishments across four areas:  Quezon City, Metro Cebu,  Davao City, and the economic zones in Cavite and Laguna engaged in three major industries:  food manufacturing, electronics manufacturing, and information and communication technology.

According to the survey, 65.2 per cent of large firms and 65 per cent of medium sized companies said they  were innovators.  On the other hand, 48.6 per cent of small companies and 34 per cent of micro businesses considered themselves innovative.

Overall, 37.6 per cent  said they were product innovators – mostly in terms of introducing new products to their respective markets and 43.9 per cent indicated they innovated on processes, mostly with little outside help.  Only 3.4 per cent of the sample revealed having received public financial support for innovation.

In a policy note titled “Why some firms innovate and why others do not,” PIDS research fellows Jose Ramon Albert, Rafaelita Aldaba, Francis Mark Quimba and Donald Yasay said there has been mounting research on innovation “with the recognition that innovation is a major driver of economic output, productivity and competitiveness.”

However, as the recent survey showed, most companies do not yet consider government and research institutions to be partners in their innovative practices and are thus developing innovations internally.  Firms also need to be stimulated to cooperate in innovation.

The PIDS fellows define an innovation as something that increases value – whether from the standpoint of the producer or of the customer.  They said that innovation activities in a firm involve the implementation of new or significantly improved  products or processes via (1) technological innovation, (2) new marketing strategies, or (3) new organizational methods.

Photo: “Design Sketching” by , c/o Flickr. Some Rights Reserved

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