Policies and Approaches to Promote Innovation in SMEs

1
Policies and Approaches to Promote Innovation in
SMEs
THE PHILIPPINES

• Raul C. Sabularse
• Deputy Executive Director, PCIERD
• Philippines

2
OUTLINE OF PRESENTATION
THE PHILIPPINES

• About the Philippines
• Philippine SMEs
• SME Development Agenda
• DOST Initiatives
• Conclusion

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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
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Philippine SMEs
1 Php 50 Source SMED
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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

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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

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Total integrated approach
Finance
SALES
SME
Marketing
Training
Advocacy
INVESTMENT
Product Devt/ Technology
JOBS
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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
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PRODUCT/TECH DEVT

• DOST RD Institutes
• Product Development and Design Center
• Packaging R D Center
• Packaging Institute of the Philippines
• Technology and Livelihood Development Center

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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

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DOST ST STRATEGIES

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

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DOST INITIATIVES for SMEs

• SMALL ENTERPRISE TECHNOLOGY UPGRADING PROGRAM
  (SETUP)
• TECHNOLOGY INCUBATION FOR COMMERCIALIZATION
  (TECHNICOM)

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SETUP

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

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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

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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

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Interventions

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

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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

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Interventions

• Database Management and Information System
• List of available technologies
• List of ST experts
• Directory of testing laboratories with testing
  services offered
• Networking with other databases

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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

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Interventions

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

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TECHNICOM

• Stimulate technological innovation
• Strengthen SMEs to adopt results of RD
• Increase private sector investment in RD
• Maximize benefits from RD investments

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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

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MARKETING

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

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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)

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FINANCE

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

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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 8020
• positive income for the preceding year/s

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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.
CONCLUSION