One of the factors behind the Philippines' consistency as a high-growth country is the innovativeness of the Filipino people, which is backstopped by Filipinnovation, the National Innovation System.

1. Governmental Programs
© 2006 IBM Corporation
Elements of a
National Innovation Strategy
3rd Steering Committee Mtg.—Sept. 25, 2007
Alejandro P. Melchor III—IBM Philippines, Inc.

2. Governmental Programs
© 2006 IBM Corporation2
Why Does a National Innovation Strategy Matter?
1. Why does a National Innovation Strategy matter? It is estimated that that 91
million new jobs will be created worldwide over the next decade. The most
pressing question is: Where? Europe? The United States? China and India?
The Philippines?
2. Many of the best jobs, and corresponding economic growth, will flow to those
countries that create the most fertile environment for innovation – the Innovation
Ecosystem—underpinned by a well thought-out National Innovation Strategy and
corresponding structures, programs, incentives and investments.
3. In a highly competitive global environment, not only businesses but also national
governments have realized that innovation is the best strategy for both
collaboration and competition, and is the key to survival and competitiveness.
4. Even cities are creating their own innovation strategies.

3. Governmental Programs
© 2006 IBM Corporation
US
UK
Philippines…
Korea
India China
Japan
Thailand
Malaysia
Vietnam
Russia
Mexico
Canada
Australia
European Union
National Innovation Strategies

4. Governmental Programs
© 2006 IBM Corporation
National Innovation Strategies
USA: National Innovation Initiative & Innovate America Report,
Legislation in Congress, President’s Innovation Agenda.
Ireland: Strategy for Science, Technology & Innovation, 2006-2013
UK: Competing in the Global Economy: the Innovation Challenge (2004)
Europe: 33 European countries have innovation strategies/policies
Canada: Achieving Excellence & Knowledge Matters:Canada’s Innovation Strategy
Germany: Partners for Innovation Initiative
Korea: Comprehensive National Innovation Strategy.
Australia: Backing Australia’s Innovation Ability – National Innovation
Program with Au $3.2 Billion in funding.
India: Innovate India Report.
Thailand: InnovAsia, National Innovation Roadmap.
Malaysia: National ICT and Innovation Roadmap.
Vietnam: National Innovation Strategy

5. Governmental Programs
© 2006 IBM Corporation
“Globalisation has made knowledge and networks key
sources of competitive advantage… We must
differentiate ourselves from others by competing not just
on cost but also on service, quality and innovation. As
we become a key node in a global network of people,
ideas, and businesses, we will create opportunities that
extend beyond the shores of an island of just four million
people...”
Mr Lee Hsien Loong, Prime Minister of Singapore
“Innovation must become a way of
life, a norm. Only then will countries
be able to compete against the best in
the world.”
YAB Dato’ Seri Abdullah bin Haji
Ahmad Badawi
Prime Minister of Malaysia
“Government support for
scientific research is not
enough. We also need to make
sure that scientific innovation
gets translated into applied
uses in business.”
Mr. Tony Blair, Outgoing Prime
Minister of the United Kingdom
“By making our economy
more flexible, more
innovative, and more
competitive, we will keep
America the economic
leader of the world.”
Mr. George W. Bush,
President of the United States
“We will seize the
opportunity of the 2008
Olympic Games,
implement innovative,
coordinated and
sustainable
development in Beijing”
Mr. Wang Quishan,
Mayor, Beijing City
“Innovation is the
foundation of the
research-based
pharmaceutical,
biotechnology and
vaccine industries.”
Dr. Harvey Bale Jr.
Director General,
IFPMA
“Continuous innovation and the
full, unfettered expression of
human capacity are
indispensable to Japan’s
economic rebirth
and revitalization.”
Mr. Junichiro Koizumi,
Former Prime Minister, Japan
Public Sector leaders speak about innovation…

6. Governmental Programs
© 2006 IBM Corporation
Elements of a National Innovation Strategy
Talent Investment Infrastructure
Catalyze the Next
Generation of Filipino
Inventors & Innovators
Craft a National Innovation
Education/HRD Strategy for
a diverse, innovative and
technically-trained
workforce
Empower Filipino Workers
to Succeed in the Globally
Integrated Economy
Embed new academic
disciplines for the New
Economy in RP schools
Energize the
Entrepreneurial Economy
Reinforce Risk-Taking and
Long-Term Investment
Develop R&D Capacity &
Global Linkages, Determine
R&D Priorities & Reallocate
Resources
Intensify Support for S&T
and Engineering
Develop Innovation
Hotspots Through
Incubation Strategies
Create National Consensus
for Innovation Growth
Strategies
Create a 21st-Century
Intellectual Property Regime
Embrace Open Standards,
Open Source & Open
Document Format
Create networks &
structures for collaboration

7. Governmental Programs
© 2006 IBM Corporation
Talent: the Human Dimension of Innovation
 Encompasses knowledge creation, education/HRD, workforce support,
with these Components:
– Create a National Innovation Education/HRD Strategy for a globally
competitive, innovative & technically skilled workforce
– Catalyze the next generation of Filipino inventors & innovators
– Empower Filipino workers to succeed in the Globally Integrated
Economy
– Embed new academic disciplines for the New Economy in universities
 Policy recommendations support a culture of collaboration,
strengthening the relationship between R&D and commercialization, and
lifelong skills development

8. Governmental Programs
© 2006 IBM Corporation
 Value of education increases during times
of change
 Curricula must transform to reflect the
realities of today and tomorrow
 Cross-disciplinary programs and degrees
 Fusing technical competency with
industry-specific knowledge and business-
process expertise
 Success requires open collaboration
among academia, government and
industry
The 21st Century Demands Uniquely-Skilled People

9. Governmental Programs
© 2006 IBM Corporation
Investment: the Financial Dimension of Innovation
 Innovation—and the entrepreneurial spirit behind it—needs financing, proper
incentives, and a willingness to take calculated risks.
 Encompasses R&D investment, intensified support for Science, Technology &
Engineering, support for risk-taking & entrepreneurship, and encouragement of
long-term innovation strategies, with these Components:
– Strengthen Philippine R&D capacity, determine priorities, reallocate resources
& develop global R&D linkages
– Intensify policy & financial support for the physical sciences, technology &
engineering
– Energize the Entrepreneurial Economy
– Devise Incentives to Reward Risk-Taking, Long-Term Investment & Innovation
– Develop Innovation Hotspots in Key RP Cities through Incubation Strategies
 Policy recommendations aim to give inventors & innovators the resources and
incentives to succeed

10. Governmental Programs
© 2006 IBM Corporation
Product and Services
Innovation
Process Innovation
Business Model
Innovation
Societal Innovation
Types of Enterprise Innovation

11. Governmental Programs
© 2006 IBM Corporation
History of Innovations
60 Years of World Class Research

12. Governmental Programs
© 2006 IBM Corporation
Infrastructure: the Physical and Policy Structures
that support Innovation and Invention
 Encompasses intellectual property protection, business regulation and structures
for collaboration among innovation stakeholders, with these Components:
– Create a National Consensus for Innovation Growth Strategies
– Build a Government-Industry-Academia-Civil Society Partnership for
Innovation as a structure for collaboration
– Create a 21st Century Philippine Intellectual Property Regime
– Embrace Open Standards, Open Source & Open Document Format
– Develop structures for open, multi-cultural, cross-industry, cross-boundary,
global innovation collaboration
– Develop Innovation Metrics to measure, understand, monitor and manage
innovation more effectively
– Develop Industry Roadmaps for R&D, policy and investment prioritization
 Policy recommendations support a Government-Industry-Academia Partnership
for Innovation, a 21st century innovation infrastructure, flexible intellectual property
regime, and institutionalizing openness.

13. Governmental Programs
© 2006 IBM Corporation
Innovation Accelerators Enable Open, Multicultural,
Cross-Industry, Cross-Boundary Collaboration
Open Source
Software
Open
Standards
Open Document
Format

14. Governmental Programs
© 2006 IBM Corporation
IP Central to Economic Growth & Competition
0
2
4
6
8
10
12
14
1954 1964 1974 1984 1994 2004
%ofGDP
US investment in intangible assets (>$1T/year)
equivalent to investment in tangibles
~80% of the value of modern companies
comes from intangible assets
Tangibles
Intangibles
Sources: US Federal Reserve – Nakamura, Ned Davis Research
“The competition of the future
world is a competition for
Intellectual Property Rights”
Chinese Premier
Wen Jiabao
Japan intends to “bring about a
nation founded on intellectual
property”
Former Japanese Prime Minister
Junichiro Koizumi
“Intellectual property is the
backbone of America's economy”
U.S. Commerce Secretary
Carlos Gutierrez

15. Governmental Programs
© 2006 IBM Corporation15
National Innovation Strategy Should Utilize the Tools of Public
Policy to Shape the Six Foundations of the Innovation Ecosystem
THE SIX FOUNDATIONS OF A NATIONAL INNOVATION ECOSYSTEM:
 Infrastructure and networks;
 Collaboration;
 Open Systems and Processes;
 New Frontiers for Intellectual Property Development and Protection;
 Skills and Training; and
 Metrics and Measurement

16. Governmental Programs
© 2006 IBM Corporation
National Innovation Strategies Shape the Innovation
Ecosystem Through Tools of Public Policy
Skills and Human
Resources Policies Research and
Development Funding
Labor, Trade,
Tax Policies
Intellectual
Property Rights
Governmental
Initiatives
Embracing Openness
Incentives