ANALYSIS OF THE TECHNOLOGY TRANSFERS AND INNOVATIONS

IN THE PHILIPPINE COMPUTER INDUSTRY

In partial fulfillment of the Requirements in

Science, Technology and Society

By

Mantabote, Joselyn

Rovie Gonzales

Tulio, Exekiel Albert Y.

March 2019
ABSTRACT

THE CASE

I. RATIONALE/BACKGROUND

Philippine industries are facing the challenge of a rapidly changing global environment

brought about especially by developments in technology, as well as advancements in research and

data science that have created new products and services. These forces have modified how Filipino

firms do business. Now, more than ever, the innovation agenda is taking root, since there is

growing recognition that innovation is a game changer, i.e. that firms practising innovative

behaviour are more productive, and that the country and its people can remain competitive if more

firms are part of an innovation ecosystem (Llanto and del Prado, 2015).

Often equated with research and development (R&D), innovation is actually distinct from

R&D; it is better viewed as the application of new products, process, or method in business, the

workplace, or external relations (OECD, 2005). In developing countries such as the Philippines,

innovation is often not about something brand new but something new to society, which, if and

when broadly disseminated, brings significant economic, social, or environmental change. It can

lead to the establishment of new businesses and new business processes, consequently contributing

to growth through increased employment opportunities in firms that practice innovation. New

processes can lead to production techniques that make more efficient use of the country’s

resources. In order for the Philippines to reap the potential benefits of an innovative industrial

sector, a national innovation strategy is critical. The strategy would identify the roles and links of
key stakeholders in the innovation ecosystem – academe, industry, government, and the external

sector.

This paper aims to provide inputs for the formulation of an innovation strategy for the

Philippines by firstly looking at the current status of innovation activity across business and

industry in the country based on a survey conducted by the Philippine Institute for Development

Studies (PIDS). It will also review past policies and discuss exemplary cases of innovation

activities that can be helpful to draw lessons for formulating a coherent set of policies that foster

innovation

Technology transfer is the process by which a developer of technology makes its

technology available to a commercial partner that will exploit the technology. Technology transfer

(TT) is the process of sharing of skills, knowledge, technologies, methods of manufacturing,

samples of manufacturing and facilities among governments and other institutions. Most of the

Philippine Companies buy the updated technology from advanced countries as Japan, UK,

Germany. In Philippines we can see that Many products came from other countries. Presently,

transfer of technology is a very important factor which fosters international business. MNCs bring

new products, new process & technology to host countries, which may be old in home countries,

but relatively new in the host countries. e.g. Cell-phone in India. Technology Transfer takes place

mostly from developed countries into developing countries. Technology Transfer takes place

mostly from developed countries into developing countries. International Business spreads

technology by: establishing the subsidiaries in developing countries establishing joint ventures

with the host country’s companies. e.g.- Hero-Honda, Maruti Suzuki. acquiring the host country’s
company or merging with the host country's firms. e.g. transferring technology through

technological alliances. e.g.

II. ISSUES AND CONCERNS

The need for a technology transfer policy is driven by a number of concerns. While public

investments in R&D in the country leaves much room for improvement, the transfer of R&D

results into the mainstream market and making them available to the public has been a dead end

question in public laboratories and research and development institutes (RDIs). In fact, at the

Department of Science and Technology (DOST), a 2005 internal study revealed that out of 258

technologies derived from DOST-funded R&D for a period of ten years, only three (3) % have

partnership or licensing agreements and only 28 % are available for commercialization but with

no takers from the private sector yet. Although sixty-five (65) % are already being utilized, this

falls short in pushing the level of innovation forward since these technologies are intended really

for key commodities.

Hesitation had been noted among our scientists and researchers to apply protection for their

research outputs which is often borne by the fear that once become known in the open, these would

be stolen or replicated. This is further fueled by the long-standing mistrust on the State’s ability to

uphold intellectual property rights (IPR) protection for their works. Some have limited knowledge

on the benefits of securing protection while others feel that the effort is not worth the time and

cost. Yet, because of the prevailing “publish or perish” incentive scheme in the academic world,

they had to report findings in peer-reviewed journals. These findings therefore remained as mere
outputs of academic exercises. Unprotected, these are vulnerable to exploitation by technology

prospectors, many of whom have become wealthy from such publicly funded discoveries

(Justimbaste, undated).

III. POINT OF VIEW

IV. STATEMENT OF THE PROBLEM

An internal study by DOST in 2007 revealed the following major constraints to technology

transfer: (1) weak public-private collaboration in R&D; (2) lack of harmonized, coordinated and

integrated technology transfer system; (3) issues on technology ownership and information

sharing; (4) weak support to S&T and lack of resources for technology transfer; (5) weak

Intellectual Property regime in the country; and (6) policy setbacks.

Weak public-private collaboration

Unlike in most developed economies where there is strong public-private collaboration from the

planning stage to R&D and technology transfer phase, technology generation activities in the

country, particularly those that are publicly funded, are often regarded as not receptive to industry

needs. The 2009 innovation survey indicated that the industrial sector acquired technologies from

all sources except public R&D institutions.

Harmony and convergence of technology transfer policies and activities is lacking among

stakeholders such as research and development institutions, government agencies, private

entrepreneurs, and venture capitalists. Some do not even have technology transfer

policies/guidelines to follow.

Technology ownership and information sharing issues

The absence of an institutional mechanism for technology transfer, such as a technology

transfer office, contributes to the instability of technology property rights especially if these came

from publicly funded research. Because of weak IPR culture, there are scientists who do not want

to negotiate or part with the technology believing that it would be disadvantageous to them. Others

believe that results of publicly funded are outright “public goods” which should be made available

for use by everyone. Still, there are those who oppose granting exclusive license to a technology

especially if it is generated out of public funds because current government accounting and

auditing system deems it as government property.

On information sharing, existing laws are not clear on the extent of technology sharing in

cases where experts from public R&D institutes are tapped as industry consultants. Policies are

also not clear on the limits of information that can be shared for publicly generated technologies.
Weak intellectual property cultureworldwide

It is increasingly recognized that market-oriented mechanism such intellectual property

(IP) is important in encouraging innovation, diffusing scientific and technical knowledge, and in

enhancing market entry and company creation. The experiences of other countries show that in

order to enhance the impact of publicly-funded R&D on the economy, the protection of intellectual

property assets arising from research and development (R&D) projects funded fully or in part by

national government agencies have encouraged the commercialization of publicly-funded R&D

results bringing about significant socio-economic benefits to the society and private individuals.

IP rights, of which patents, industrial designs, copyrights and trademarks are among the most

widespread, reward investments in R&D and innovation by granting inventors and creators market

power over competitors.

Lack of resources for technology transfer

Considering the comparatively limited budget for S&T in general appropriations, public

support for S&T continues to be inadequate. In a 2005 data at the DOST, the expenditure on R&D

amounted only to 0.12% of the Gross Domestic product (GDP), too low as compared to the 1%

GDP prescribed by the United Nations.

Policy setbacks

In many countries, governments have recognized that placing the outputs of publicly

funded research in the public domain is not sufficient to generate social and economic benefits

from R&D. Granting R&D institutions the rights to IP generated with public funds can lead to

better use of research results that might otherwise remain unexploited, as well as to the creation of
academic spin-offs or start-ups that create jobs, income and wealth. However, these assertions are

open to questions of whether or not there is prior and existing policy in coordinating all the factors

in the technology transfer process.

As a result of these problems, the country generated a very low number of homegrown

patents (about one granted per million population) compared to its Asian neighbors. Given the low

number of patents granted to Filipinos in the country, it appears that many scientists and

researchers are not fully aware of the potential benefits and implications of owning intellectual

property rights. Despite efforts initiated by the Intellectual Property Office of the Philippines (IPO)

to conduct familiarization programs for the science community to be aware of IPR benefits under

the Intellectual Property Code of the Philippines (Republic Act 8293), IPO6 reported a dip in the

number of local patents granted, with only 15 local patents granted from a total of 1,653 granted

in 2005 and only 28 out of 1,814 granted in 2007.

All these pitfalls are further reflected on how the country performed in international

innovation ratings compared to the other ASEAN countries as shown in the recent Global

Competitive (GC) Survey

V. ALTERNATIVE COURSE OF ACTION

VI. RECOMMENDATION