Moving up or going back the Value Chain : An examination of the role of government with respect to promoting technological development in the Philippines

The Philippines is one of the leading exporters of high technology products from the developing world. However its production of these items is largely based on assembly of imported components. Affiliates of MNCs and small and medium local companies dominate the country's manufacturing sector. Successive governments have been grappling with the problems of moving up the value chain in the economic sense of the term or going back it in the technical sense. The paper undertakes a detailed review of the various policies and instruments put in place by various governmental agencies to hasten this process. Availability of adequate quantity of scientific manpower and financial schemes to encourage technology development at the enterprise-level are identified as the key factor inputs that are required for moving up the value chain. The analysis shows that the country has a serious shortage of scientists and engineers and there are also serious questions about its quality. Further technology financing schemes are insignificant and fragmented. Consequent to this the institutional support that is available for moving up the value chain in most high technology- intensive sectors is under some doubt.