Role of Philippine universities in business innovation



Universities fulfill an important role in the national innovation system (NIS) of the Philippines, particularly in terms of providing business and other institutions with human capital. As the Group of Eight (2011) asserts: “What business most needs from universities is a ready supply of competent, talented, and creative people able to supply their skills and further develop their potential across the whole range of business activities.”

If individual firms are to respond to emerging opportunities, universities must provide them with people with knowledge and skills beyond those what these firms currently need.

In fact, Philippine colleges and universities have produced graduates of such volume, particularly in business and related courses, medical and allied courses, and engineering and technology, that there is an oversupply of talent in some areas. Many of these graduates, especially IT professionals, accountants, and engineers, choose to work abroad, given that local companies could not provide the compensation and benefits that they desire. Destinations like Hong Kong, Malaysia, and Singapore hire our best professionals and other skilled personnel, who, in turn, drive innovation in their companies and industries.

In terms of producing knowledge capital, the Philippine universities has performed miserably compared to its Asian neighbors, if we consider conventional measures, such as R&D expenditures, R&D personnel, scholarly publications, citation indices, and patents granted. This is no surprise, given the structure of higher education in the country. Since a large majority of colleges and universities in the country are tuition-dependent private institutions, they are not expected to invest much in developing their research infrastructures.

Given that the Philippines is transitioning from being a factor-driven economy to being an efficiency-driven economy, the focus of its higher education institutions (HEIs) in producing skilled labor might be sufficient at this point to sustain its growth in the short term. According to Tullao and Cabuay (2013), the country can still capitalize on its resource endowments, particularly abundant labor, and depend on borrowed technology combined with incipient local technology.

However, as the Philippine economy further advances, it is thought that more sophisticated human resources must form the core of the country’s knowledge capital. To sustain economic development at the innovation-driven stage, the country requires a sufficient supply of scientists, highly educated engineers and highly skilled professionals. Moreover, since innovation is not just about new products and processes but also about organizational changes and the application of new ways of thinking, we also need talent coming not only from the hard sciences but also from the various social sciences and humanities. Clearly, businesses must establish strong linkages with HEIs for sourcing both talent and new knowledge.

It is interesting to note, according to the 2009 Survey of Innovation Activities (SIA),that a good number of “innovation active” firms have engaged the services of HEIs and public research institutes, aside from getting innovation ideas from their customers, suppliers, and competitors. This means that innovative companies will seek the expertise they need, regardless of its source. This brings to mind the Group of Eight’s (2011) contention that “universities have value to business because they are different from business and operate in disparate ways,” and that they add value “by doing what business cannot or will not do and then ensuring that business becomes aware of the potential opportunities they have created.”

Raymund B. Habaradas is an Associate Professor at the Management and Organization Department of the Ramon V. Del Rosario College of Business of De La Salle University, where he teachesManagement of Organizations, Ethics and Corporate Social Responsibility, and Management Research. He welcomes comments at The views expressed above are the author’s and do not necessarily reflect the official position of DLSU, its faculty, and its administrators.


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