Monday, February 14, 2011

Technological Readiness and Innovation of the Philippines (Part 1)

The Philippines continue to fall behind our neighboring countries in terms of Technological Readiness and Innovation based on the Global Competitiveness Report 2010-2011, released during its World Economic Forum in Geneva, Switzerland last year.


According to the index, the country has slipped from rank 99 in 2009 to rank 111 in 2010 under the innovation category, as well as significantly eleven notches lower in terms of technological readiness, from rank 84 in 2009 to rank 95 in 2010. Although, its overall ranking based on the twelve pillars of competitiveness: institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labor market efficiency, financial market development, technological readiness, market size, business sophistication, and innovation, the country has slightly improved at two notches rank higher at 85 out of 139 countries. In 2009, the Philippines ranked 87 out of 133 countries.


Its Southeast Asian counterparts - Singapore, Malaysia, Brunei Darussalam, Thailand, Indonesia, Vietnam and Cambodia, have fair improvements, as well as declines in both categories albeit significantly ranked higher than the Philippines. It is only in the category of technological readiness, where the Philippines is twenty notches higher than Cambodia. However, among its Southeast Asia neighbors, it was Brunei Darussalam who has significantly improved in both categories. It has climbed eleven notches from rank 60 in 2009 to rank 49 in 2010 in terms of technological readiness as well as improvements in the innovation, which is also significant at rank 75 in 2009 to rank 69 in 2010.



The variables considered in the technological readiness are the countryʼs technological adoption, i.e. the availability of latest technologies, firm-level technology absorption, FDI or foreign direct investment, and technology transfer. Also included under the said category is the countryʼs position in terms of Information and Communication Technology, i.e. the number of internet users, broadband internet subscriptions, and improvements on the internet bandwidth. On the other hand, variables in the innovation category are based on the capacity of the country to innovate, which includes the quality of scientific research institutions, company spending on R&D, university-industry collaboration, government procurement of advanced technological products, availability of scientists and engineers, and the utility patents per million population.



Published annually by the World Economic Forum (WEF), the Global Competitiveness Report 2010-2011 seeks to measure and compare the competitiveness level of 139 countries worldwide. The WEF defines competitiveness as the set of institutions, policies and factors that determine the level of productivity in a country. This definition forms the basis of a comprehensive framework comprised of key constructs commonly referred to as the 12 pillars of competitiveness. The weighted aggregate of these 12 pillars constitute the Global Competitiveness Index (GCI), which in turn is used to measure the performance of each country. The GCI score has a minimum value of 1 and a maximum of 7. Countries are then ranked based on these scores, where higher scores are accorded higher rankings.


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