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Industrial policy for innovation: why does it matter?

Author

Listed:
  • Rafaelita M. Aldaba

    (Department of Trade and Industry)

  • Fernando T. Aldaba

    (Ateneo de Manila University)

Abstract

This paper explores the relationship between industrial policy, innovation, and productivity in the Philippines. It argues that strategic industrial policies can promote innovation by incentivizing market-oriented research and development and commercialization, developing necessary innovation infrastructure, and fostering a skilled workforce equipped to work with new technologies and adapt to changing market demands. The paper also focuses on the importance of connecting innovation and entrepreneurship ecosystems, highlighting the challenges facing the Philippines in this area. It specifically analyzes the country’s startup ecosystem and recommends the establishment of Regional Inclusive Innovation Centers (RIICs) to facilitate collaboration among various stakeholders. Finally, the paper discusses the adoption and adaptation of artificial intelligence and Industry 4.0 technologies and their potential to drive productivity gains and transform the Philippine economy

Suggested Citation

  • Rafaelita M. Aldaba & Fernando T. Aldaba, 2024. "Industrial policy for innovation: why does it matter?," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 61(2), pages 85-109, December.
    • Handle: RePEc:phs:prejrn:v:61:y:2024:i:2:p:85-109
    as

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    File URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/1059/1001
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    References listed on IDEAS

    as
    1. Bronwyn Hall & Jacques Mairesse, 2006. "Empirical studies of innovation in the knowledge-driven economy," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(4-5), pages 289-299.
    2. Christian Rammer & Gastón P Fernández & Dirk Czarnitzki, 2021. "Artificial Intelligence and Industrial Innovation: Evidence from Firm-Level Data," Working Papers of Department of Management, Strategy and Innovation, Leuven 674605, KU Leuven, Faculty of Economics and Business (FEB), Department of Management, Strategy and Innovation, Leuven.
    3. Gilbert Richard J, 2006. "Competition and Innovation," Journal of Industrial Organization Education, De Gruyter, vol. 1(1), pages 1-23, December.
    4. Bruno Crepon & Emmanuel Duguet & Jacques Mairesse, 1998. "Research, Innovation And Productivity: An Econometric Analysis At The Firm Level," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 7(2), pages 115-158.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    industrial policy; innovation; entrepreneurship; start-up ecosystem;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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