On Improving the Innovation Ecosystem

What is an Innovation Ecosystem?

Achieving and sustaining any development outcome depends on the ability of multiple and interconnected actors to work together effectively.

For innovative ideas to be efficiently generated, developed, tested, and ultimately scaled for development impact, they also need the coordinated, collaborative action and resources of the government, civil society, the private sector, universities, individual entrepreneurs, and others. Collectively, they are referred to as the innovation ecosystem.

Who are the players of the innovation ecosystem in the Philippines?

In the Philippines, the innovation ecosystem players include large multinational companies, small and medium enterprises (SMEs) and start-ups, industry associations, universities as research partners and developers of the future workforce, and key government agencies like the Department of Trade and Industry (DTI), Department of Science and Technology (DOST), Commission on Higher Education (CHED), Department of Education (DepEd), Department of Agriculture (DA), National Economic and Development Authority (NEDA), and Department of Information Communications and Technology (DICT). The interaction of these stakeholders creates and transfers knowledge that will enable new products and new business models to catalyze economic transformation and development.

In 2018, the Philippine Inclusive Filippinovation and Entrepreneurship Roadmap adopted the Innovation Ecosystem Framework proposed by STRIDE.

The framework describes the connections between the knowledge economy (driven by research) and the commercial economy (driven by the marketplace) and how co-creation will have higher potential of success. Research and knowledge creation stem from a strong core of education and human capital. New knowledge must be transferred into commercial applications for the ecosystem to function. The elements of the ecosystem function only in an atmosphere of collaboration, which is dependent on social capital, trust, and information sharing.

How did USAID contribute to improving the innovation ecosystem in the Philippines?

USAID Philippines implemented the Science, Technology, Research and Innovation for Development or STRIDE from 2013 to 2022. The project aimed to promote innovation and strengthen the capacity of the Philippine higher education in science, technology, and innovation.

Through STRIDE, USAID focused on disciplines contributing to high‐growth economic sectors such as electronics, chemical industries, alternative energy, translational medicine, agri-business, information, and communication technologies. The project was implemented throughout the country with a focus on sites that are within USAID’s Cities Development Initiative.

USAID contributed to improving the Philippine innovation ecosystem by:

  • Increasing human capital via capacity building
  • Conducting strategic research, leading to knowledge creation
  • Promoting knowledge and technology transfer
  • Strengthening collaboration at national and regional levels
  • Encouraging commercialization by supporting start-ups and spin-offs
STRIDE Activities improved the innovation ecosystem (IE)elements in differential ways

STRIDE Activities improved the innovation ecosystem (IE)elements in differential ways

How did USAID contribute to improving the innovation ecosystem?


Putting MSME at the Forefront:

The case of RIIC Region XI (Davao-based)

RIIC Formation processes:

Impowering the micro, small, and medium enterprise (MSMEs) will lead to a more vibrant, inclusive, and resilient Davao Region

This was the motivation for establishing a RIIC in Davao Region,
which an RDC XI resolution affirmed.

In 2006, Davao Region adopted the Industry Clustering (IC) Strategy as a development platform to enable the region to participate in the Association of Southeast Asian Nations (ASEAN) Economic Community and global value chains. This trailblazing effort has prepared a solid foundation for the RIIC to thrive, with key stakeholders from national and local governments, private sector, and academe. Proponents viewed the initial conditions for the success of the RIIC’s formalized collaborations as:

  1. the already established network of key stakeholders to implement and improve the Region’s IC strategy though working initially in silos focused on the agencies’ respective mandates;
  2. the technical assistance that STRIDE provided; and
  3. the increasing demand for innovation following the emergence of the Industry 4.0 and the rise of digital economies.

From a partner standpoint, the planning challenge was the coordination among lead implementors and partners. The technical assistance STRIDE provided was crucial for identifying innovation players and building innovation collaboration among key agencies and partners through various avenues for greater collaboration, such as the Ideation workshops, among others.

RIIC Implementation:

The Region XI RIIC built on the Food Processing Innovation Center (FPIC) activities in Davao, which was established in 2014. The FPIC is a partnership between the government, Davao’s local government, and industry, based in the Philippine Women’s College. It serves as an innovation hub in the Region, providing technical expertise, technologies, and facilities specializing in the product development of fresh and processed foods.

However, the RIIC intervention is key to boosting the capacities of institutions for innovation and the development and scaling-up of MSMEs and start-ups. Having been integrated in the RIIC’s innovation networks, the FPIC benefits from the expanded linkages with MSMEs and other innovative product and service providers, increasing its clientele and improving its services. By far, the gains of the RIIC XI are three-fold:

  1. the mapping of the innovation landscape in the Region;
  2. the Innovation for Business Recovery (IBR) project, which helps businesses survive, recover, and thrive amid the pandemic (including “shop-floor solutions” with the partnership of MSMEs and University of the Philippines [UP] Mindanao); and
  3. formulation of the iSTRIKE Davao Strategic Plan for 2021-2025, which will define the RIIC’s strategic direction for the next five years.
    Initial acceptance and developing a culture of innovation were major blocks in the start-up phase of RIIC implementation.

Sustainability Challenges:

At two years old, the RIIC Region XI has taken a huge leap toward sustainability via the iSTRIKE Davao, which formalized the RIIC collaborative framework, with the active support of champions in the government-industry-academe innovation ecosystem. Sustaining this convergence will depend on assessing the effectiveness of the management measures being implemented.

The Davao City Inventions and Innovations Center (DCIIC), established through a landmark city ordinance, also boosts awareness of and support for the RIIC. DCIIC will complement the RIIC’s initiatives in providing innovators and start-ups with a venue for accessing goods, services, and capital to develop and promote their inventions and innovations. Passion, commitment, and trust, especially among the lead actors in government (i.e., DTI, DOST, DICT, CHED), will drive the RIIC’s stability and sustainability.

Source of data: KII with Regional Directors (Region III) of DTI, DOST, NEDA; FGD with RIIC Region III sectoral representatives


Unifying Agenda:

The case of RIIC Region III (Bulacan-based)

RIIC Formation processes:

The RIIC in Region III came about from the lessons learned from the RIICs in the pilot areas.

According to DOST III Regional Director Dr. Julius Cesar Sicat, the inspiration came from the business recovery plan presented by Region X from their experience in the pilot round. It was called “Optimizing Regional Opportunities for Business Excellence Through Science, Technology, and Innovation (OROBEST)”.

From his perspective, the recovery plan will help MSMEs to recover from the pandemic. Other RIIC III partners also believed that convergence among key stakeholders from government, industry, and
academe can harmonize all resources for innovation toward competitiveness of local businesses and economic development in the region.

Like Davao, these sectors worked together before STRIDE approached them, but they were all independent programs. The Region III RIIC now sets out to strengthen the region’s innovation ecosystem by improving stakeholder access to innovation and creating platforms for dialogue, collaboration, and partnerships that would contribute to inclusive and sustainable development of the region. RIIC is considered a one-stop shop where MSMEs can scout for specific assistance, making higher education institutions and research and development institutes work more demand-driven.

RIIC Implementation:

Improved partner relations are the measure of success for this project that was just formally established in September 2020. The Bulacan Chamber of Commerce and Industry (BCCI) and the Philippine Chamber of Commerce North Luzon were ready to take on the opportunities of the RIIC. RIIC III also just launched the web-based THRIVE Central Luzon app, based in Bulacan State University, that can increase the RIIC’s assistance coverage by removing physical boundaries.

Even in its early stage, RIIC Region III has achieved an important level of cooperation between the government and private sector. It is hoped that with the recent creation and launching of a website, more people will become aware of its presence in the region and avail of its services.

CHED’s presence is felt in RIIC Region III mainly due to the regional director’s social capital. CHED III actively supports the Higher Education Agenda in the RDC III. Coordination with higher education institutions, particularly in research and development, is easier because of CHED’s commitment to the institutional partnership. This is a unique trait that is not yet seen in other RIICs.

The CHED’s regional director, other regional directors, and presidents of state universities and colleges are also members of the Regional Development Council.

" With the government's resources, public and private entities are more willing to cooperate and collaborate for a common and noble pursuit "

according to the regional director of DTI III

Sustainability Challenges:

To make the RIIC sustainable, the actors believe that industry should be at the helm, similar to systems in the Netherlands and Germany that empower MSMEs. Chambers of commerce should support the RIIC. To pursue this, the BCCI has created Vice President for Innovation position.

The chambers already have their own partnerships because they saw the potential to push MSMEs to serve in their region and within greater Metro Manila. Attracting more partners will depend on the performance of current partnerships

When they are ready, they will welcome the participation of local government units and other prospective investors to expand the RIIC’s services and further its use to the MSMEs.

Source of data: KII with Regional Directors (Region III) of DTI, DOST, NEDA; FGD with RIIC Region III sectoral representatives