Take the Lead!

1. Take the Lead! • The Role Scientists and Engineers in Developing National Industries Raymond P. Pingol

2. Walkthrough • State of science and technology • National industrial policy • What can we do?

3. State of science and technology

4. State of science and technology • Philippine science and technology • Underdeveloped • Stunted • Reflected on statistics • Education • Industrial growth • Reflected on livelihood • Lack of industries • Massive poverty

5. Philippine poverty and backwardness • Widespread poverty • 1 out of 4 (NSCB 27.9 %, < P7,821/mo) • Worsening inequality • Agricultural and industrial backwardness • Overly reliant on cheap labor export (OFW), foreign capital and debt

6. 2012 data: Agri 12.3%, Industry 33.3 %, Services 54.4% (2011 est)Feb 2013 data: Agri 12.4 %, Industry 31.3%, Services 56.4 % (2012 est)“De-industrialization” and shrinking manufacturing: As small as in 1950sFalling food production per capita, rising agricultural trade deficits

7. SWS survey (1Q 2013): 25.4% unemploymentAround 10.6 million unemployed (IBON) + 5 million (due to Yolanda)47.2%-49 % in the 18-24 age range, 30.2% -32.9 % for 25-34 (Dec 2012 SWS)

8. Weak Manufacturing • Manufacturing industry has been weak, growth has been slow and contribution to value added and employment has been limited. • ..Industrial structure remained “hollow” or “missing” in middle and medium enterprises... never seriously challenged the large entrenched incumbents. • Linkages between SMEs and large enterprises [remain] limited • …Heavy concentration of Philippine exports on three major products groups: electronics, garments and textiles and auto parts • Within these major product groups, exports are highly concentrated in low value added and labor-intensive products sectors. Twenty Years after Philippine Trade Liberalization and Industrialization: What Has Happened and Where Do We Go from Here Rafaelita M. Aldaba, Philippine Institute for Development Studies DISCUSSION PAPER SERIES NO. 2013-21

9. Emigration of Science and Technology Educated Filipinos (1998-2006) and 2011 DOST SEI studies Brain Drain Worsens • In 1998, there were 9,877 outbound science workers. In 2009, the number has grown to 24,502 (2.5x) • More than half of these are health professionals and nurses while a fifth are engineers. • 23 % of total science workers pool go abroad to seek employment. • Philippines ranked 96 out of 139 nations in terms of availability of scientists and engineers in the 2010-2011 Global Competitiveness Report by the World Economic Forum. Emigration of Science and Technology Educated Filipinos (1998-2006) and 2011 DOST SEI studies

10. Emigration of Science and Technology Educated Filipinos (1998-2006) and 2011 DOST SEI studies Brain Drain Worsens • The number of scientists and engineers currently engaged in research and development (R&D) activities across the Philippines is about 8,800 • In 2008, allocation for science and technology related activities in Philippines comes to 0.14% of GDP (half of Thailand's 0.26% and 1/5 of Malaysia's 0.69%) • UNESCO Science Report 2010: researcher population density of the Philippines is 1 per 12,345 population in 2009. Singapore (one per 164), Thailand (one per 3,215), Indonesia (one per 6,172) and Vietnam (one per 8,695). Emigration of Science and Technology Educated Filipinos (1998-2006) and 2011 DOST SEI studies

11. Current situation • Lack of basic industries • No program for rural industrialization, agricultural modernization • No genuine infrastructure in energy, transportation, communications, information technology and basic services

12. National Industrialization

13. Agriculture (modernized and mechanized)‏ BASE Light industriesprocessing of grains, cereals, fruits and vegetables, beverages and dairy products, meat and poultry; aquaculture and fisheries, clothing-footwear, textile and garment industriesand mass housingBRIDGING FACTOR Heavy industries base metals, basic chemicals, petrochemicals, pharmaceuticals, machinery, precision instruments, electronics, and consumer durables. LEADING FACTOR National industrialization • Maximum self-sufficiency in industrial production of capital • Provide intermediate and consumer goods for domestic needs based on national potential • Ensure food security and self-sufficiency

14. ...as opposed to... • Current pattern of production, investments, and trade • Export of agricultural and extractive raw materials • Importation of surplus finished goods, agricultural commodities and capital, • Re-export of reassembled or repackaged imported manufactures

15. Agriculture (modernized and mechanized)‏ BASE Light industriesprocessing of grains, cereals, fruits and vegetables, beverages and dairy products, meat and poultry; aquaculture and fisheries, clothing-footwear, textile and garment industriesand mass housingBRIDGING FACTOR Heavy industries base metals, basic chemicals, petrochemicals, pharmaceuticals, machinery, precision instruments, electronics, and consumer durables. LEADING FACTOR Why build national industries? • Key to establishment of modern and diversified industrial economy • Secure livelihood • Satisfy basic needs • Ensure rapid and sustained economic growth • Achieve economic independence

16. Agriculture (modernized and mechanized)‏ BASE Light industriesprocessing of grains, cereals, fruits and vegetables, beverages and dairy products, meat and poultry; aquaculture and fisheries, clothing-footwear, textile and garment industriesand mass housingBRIDGING FACTOR Heavy industries base metals, basic chemicals, petrochemicals, pharmaceuticals, machinery, precision instruments, electronics, and consumer durables. LEADING FACTOR Why build national industries? • Generate and mobilize domestic capital • Generate domestic market • Create Jobs • Give living wage to workers • Raise purchasing power of peasants/poor • Produce primarily for domestic consumption not exports

17. Is there economic basis for national industrialization? • Comprehensively rich natural resource base • Metals, minerals, energy, biodiversity, marine resources • Skilled forces of production • Workers, peasants, professionals (incl. scientists and technologists)

18. Some features of a national industrialization policy

19. Public sector ownership and operation of vital industries • Nationalization of vital and strategic enterprises • Main source of raw materials • Main lines of distribution • All public utilities • Social services (housing, health, education, social security)‏ • Dismantle and control big monopoly commercial operations

20. Limited foreign corporations and entities in manufacturing enterprises • Foreign investments will be allowed only in clearly unreplicable advantages in terms of technology transfer or access to capital, products and markets • Strict regulation and supervision including entry of all forms of speculative capital • May be allowed a minority equity share (not more than 40%)‏

21. Financing National Industries • Public finance to maximize funds for the realization of the strategic plan • Eliminate bureaucratic, military and other counterproductive expenditures (aka pork barrel) • Remove automatic appropriation for foreign debt service • Balance accumulation and consumption • All fraudulent and behest loans shall be repudiated

22. PDAF network of releases Legislator → NGO 2007-2009 size of lines correspond to amount of money transferred PDAF releases 2007-2009 Legislator and NGOs thickness of lines = amount of money Text

23. The cost of pork barrel funds

24. Genuine national development with a domestic industrial policy

25. Agriculture (modernized and mechanized)‏ BASE Agriculture as base Heavy industries base metals, basic chemicals, petrochemicals, pharmaceuticals, machinery, precision instruments, electronics, and consumer durables. LEADING FACTOR Light industriesprocessing of grains, cereals, fruits and vegetables, beverages and dairy products, meat and poultry; aquaculture and fisheries, clothing-footwear, textile and garment industriesand mass housingBRIDGING FACTOR • Provide means of subsistence • Source of industrial raw materials • Vast market for industrial products; • Main reservoir of labor power for industry and other sectors of economy • Important source of accumulation funds • Biotechnology, high yield farming, low inputs, efficency, etc.

26. Agriculture (modernized and mechanized)‏ BASE Heavy industry is leading factor Light industriesprocessing of grains, cereals, fruits and vegetables, beverages and dairy products, meat and poultry; aquaculture and fisheries, clothing-footwear, textile and garment industriesand mass housingBRIDGING FACTOR Heavy industries base metals, basic chemicals, petrochemicals, pharmaceuticals, machinery, precision instruments, electronics, and consumer durables. LEADING FACTOR • Provide modern machinery, motor power, chemical fertilizers, pesticides, and other means of production for agriculture • Produces various light industrial machines and light industrial raw materials

27. Agriculture (modernized and mechanized)‏ BASE Heavy industry is leading factor Light industriesprocessing of grains, cereals, fruits and vegetables, beverages and dairy products, meat and poultry; aquaculture and fisheries, clothing-footwear, textile and garment industriesand mass housingBRIDGING FACTOR Heavy industries base metals, basic chemicals, petrochemicals, pharmaceuticals, machinery, precision instruments, electronics, and consumer durables. LEADING FACTOR • Provides necessary conditions for technical innovation and development of the national economy as a whole and guaranteeing independence

28. Agriculture (modernized and mechanized)‏ BASE Light industry as a bridging factor Light industriesprocessing of grains, cereals, fruits and vegetables, beverages and dairy products, meat and poultry; aquaculture and fisheries, clothing-footwear, textile and garment industriesand mass housingBRIDGING FACTOR Heavy industries base metals, basic chemicals, petrochemicals, pharmaceuticals, machinery, precision instruments, electronics, and consumer durables. LEADING FACTOR • Produces necessary consumer goods for rural and urban areas • Indispensable in raising living standards • Requires smaller investments but provides quick returns • Accumulation fund for expansion of heavy industry

29. Agriculture (modernized and mechanized)‏ BASE Industrialization for whom? Light industriesprocessing of grains, cereals, fruits and vegetables, beverages and dairy products, meat and poultry; aquaculture and fisheries, clothing-footwear, textile and garment industriesand mass housingBRIDGING FACTOR Heavy industries base metals, basic chemicals, petrochemicals, pharmaceuticals, machinery, precision instruments, electronics, and consumer durables. LEADING FACTOR • Committed to people’s interests • Science and technology for people’s requirements and needs • Responsive and constantly plans • Development and management • Judicious use of natural resources • Consciously linked on people’s needs Greatest and continuing challenge is to make science and technology and progress serve the benefit of the majority

30. Role of Engineers and Scientists in National Development • Inventors, scientists, technologists, engineers, and other research and development workers are the key players in a country’s quest for industrialization • S&T workers are the lifeblood of research, innovation and have important roles in the industry and manufacturing sector

31. What can we do? • Unite • Participate • Serve Man can find meaning in life. Short and perilous as it is, only through devoting himself to society. –Albert Einstein

32. Take the Lead! • The Role Scientists and Engineers in Developing National Industries Raymond P. Pingol