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Policies and Approaches to Promote Innovation in SMEs

THE PHILIPPINES. Policies and Approaches to Promote Innovation in SMEs. Raul C. Sabularse Deputy Executive Director, PCIERD Philippines . THE PHILIPPINES. OUTLINE OF PRESENTATION. About the Philippines Philippine SMEs SME Development Agenda DOST Initiatives Conclusion. THE PHILIPPINES.

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Policies and Approaches to Promote Innovation in SMEs

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  1. THE PHILIPPINES Policies and Approaches to Promote Innovation in SMEs Raul C. Sabularse Deputy Executive Director, PCIERD Philippines

  2. THE PHILIPPINES OUTLINE OF PRESENTATION • About the Philippines • Philippine SMEs • SME Development Agenda • DOST Initiatives • Conclusion

  3. THE PHILIPPINES Population (2004) 82.7 M Family Inc (US$) (2000) 1,500 GDP Growth (%) 4.4 Export (US$) (2003) 2.952 B Import (US$) (2003) 3.274 B

  4. Philippine SMEs 1$ = Php 50 Source: SMED

  5. Importance of SMEs • creates employment • source of investment and revenue • boosts personal wealth and talent • Outlets for the talents of enterprising people • Catalyze innovations and dynamism • Stimulate personal savings • promotes community stability • less harm to the environment than large companies • Raise level of people participation in the economy • vital engine of economy • Earn foreign exchange • Stimulate growth in rural areas • Expand domestic markets/penetrate non-traditional markets

  6. Critical Needs • Appropriate technologies • Technical manpower training • Products standards and testing facilities • Appropriate packaging and product labeling • Access to information • Access to capital • Financial, personnel & business management • Access to markets • Sustainable raw material supply • Better/more efficient transport facilities

  7. Total & integrated approach Finance SALES SME Training Advocacy Marketing INVESTMENT Product Devt/ Technology JOBS

  8. SME DEVELOPMENT AGENDA Objective: To increase the contribution of SMEs to the economy by pushing enterprises to higher levels through a convergence of assistance - PRODUCT/TECHNOLOGY DEVELOPMENT - SKILLS TRAINING - FINANCIAL - MARKETING

  9. PRODUCT/TECH DEVT • DOST R&D Institutes • Product Development and Design Center • Packaging R & D Center • Packaging Institute of the Philippines • Technology and Livelihood Development Center

  10. TRAINING • Technical Education and Skills Development Authority • Cottage Industry Training Center • Phil Trade and Training Center • Dept of Labor and Employment • Fiber Industry Development Authority • Technology and Livelihood Development Center • Dept of Science and Technology

  11. DOST S&T STRATEGIES • Niching and Clustering • Address Pressing National Problems • S&T Human Resources Development • Support to SMEs • Accelerate Technology Transfer and Utilization • Build and upgrade S&T Infrastructure • Strengthen Government-Industry-Academe-Civil Society and International Linkages in S&T • Improve S&T Governance • Promote and Popularize S&T

  12. DOST INITIATIVES for SMEs • SMALL ENTERPRISE TECHNOLOGY UPGRADING PROGRAM (SETUP) • TECHNOLOGY INCUBATION FOR COMMERCIALIZATION (TECHNICOM)

  13. SETUP Technical assistance package to SMEs • Appropriate technologies • Products standards and testing • Packaging and product labeling • Access to information • Linkaging and networking

  14. Priority Sectors • Food processing • Gifts, toys, house wares, handicrafts, fashion • accessories, natural fibers and dyes • Horticulture (Cut flowers, fruits and high value crops) • Marine and aquatic resources • Metals and Engineering • Furniture

  15. Interventions • Provision of Technology • Technology needs assessment, sourcing and installation of technology • Seed fund for technology acquisition • Human resource development • Productivity consultancy and technical advisory services

  16. Interventions • Product Standards and Testing • Assist BPS develop standards • Product testing • Enhancement of national and regional DOST testing laboratories • ISO accreditation of testing laboratories

  17. Interventions • Packaging and Labeling • Development of functional package designs and identification of alternative packaging materials using local resources • Development of • appropriate labels • for food products

  18. Interventions • Database Management and Information System • List of available technologies • List of S&T experts • Directory of testing laboratories with testing services offered • Networking with other databases

  19. Interventions • INTER-AGENCY DESIGN AND ENGINEERING ASSESMENT (IDEA) Team • Assess equipment requirement of firm • Establish efficiency indicators, maintenance and troubleshooting guidelines for equipment • Identify accessories to enhance equipment efficiency • Train local experts on trouble shooting, material/energy balance, among others • Introduce concepts to ensure quality, uniformity and efficiency of operations

  20. Interventions • Linkaging and Networking • Raw material sourcing • Marketing • Financing • Equipment design and fabrication

  21. TECHNICOM Technology Generation Commercialization BRIDGING THE GAP • Stimulate technological innovation • Strengthen SMEs to adopt results of R&D • Increase private sector investment in R&D • Maximize benefits from R&D investments

  22. TECHNICOM To fast track the commercial application of technologies developed by the S & T community • business plan preparation • IP protection • negotiation and licensing • commercial prototype • pilot scale production • training and consultancy

  23. MARKETING • SME Database • Trade Fairs/Exhibitions • Provincial Trade Fair • National Trade Fair • Manila F.A.M.E. • Buying and selling mission • Domestic Fairs • Int’l Fairs Buyer-supplier matching • Permanent display showrooms

  24. Business Counseling • Business Counselors (BCs) provide consulting and advisory services to SMEs • How to prepare a business plan • How to market products better • What training courses to take • 60 BCs at SME Centers • Over 100 Volunteer BCs • FINEX (Financial Executives of the Phil) • MAP (Management Assoc of the Phil) • PICPA (Phil Institute of Certified Public Accountants)

  25. FINANCE • SME Unified Lending Opportunities for National Growth (SULONG) • Venture Capital • Initial Public Offerings (IPO) • Bonds • Advances from clients

  26. SULONG Qualified Borrowers • all industries except imported goods, liquor, cigarettes, and extractive industries. • at least 60% Filipino-owned • not more than P100 M assets Requirements • Debt/Equity Ratio of at most 80:20 • positive income for the preceding year/s

  27. CONCLUSION SMEs We have been trying to push the economy from the top. But to move the economy faster, we also need to push from the base.

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