Take the Lead!

Take the Lead!

The Role Scientists and Engineers in Developing National Industries

Raymond P. Pingol

Walkthrough

• State of science and technology

• National industrial policy

• What can we do?

State of science and technology

State of science and technology

• Philippine science and technology

• Underdeveloped

• Stunted

• Reflected on statistics

• Education

• Industrial growth

• Reflected on livelihood

• Lack of industries

• Massive poverty

Philippine poverty and backwardness

• Widespread poverty

• 1 out of 4 (NSCB 27.9 %, < P7,821/mo)

• Worsening inequality

• Agricultural and industrial backwardness

• Overly reliant on cheap labor export (OFW), foreign capital and debt

• 2012 data: Agri 12.3%, Industry 33.3 %, Services 54.4% (2011 est)Feb 2013 data: Agri 12.4 %, Industry 31.3%, Services 56.4 % (2012 est)

“De-industrialization” and shrinking manufacturing: As small as in 1950sFalling food production per capita, rising agricultural trade deficits

• SWS survey (1Q 2013): 25.4% unemploymentAround 10.6 million unemployed (IBON) + 5 million (due to Yolanda)47.2%-49 % in the 18-24 age range, 30.2% -32.9 % for 25-34 (Dec 2012 SWS)

Weak Manufacturing• Manufacturing industry has been weak, growth has been slow

and contribution to value added and employment has been limited.

• ..Industrial structure remained “hollow” or “missing” in middle and medium enterprises... never seriously challenged the large entrenched incumbents.

• Linkages between SMEs and large enterprises [remain] limited

• …Heavy concentration of Philippine exports on three major products groups: electronics, garments and textiles and auto parts

• Within these major product groups, exports are highly concentrated in low value added and labor-intensive products sectors.

Twenty Years after Philippine Trade Liberalization and Industrialization: What Has Happened and Where Do We Go from Here Rafaelita M. Aldaba, Philippine Institute for Development Studies

DISCUSSION PAPER SERIES NO. 2013-21

Brain Drain Worsens• In 1998, there were 9,877 outbound science workers.

In 2009, the number has grown to 24,502 (2.5x)

• More than half of these are health professionals and nurses while a fifth are engineers.

• 23 % of total science workers pool go abroad to seek employment.

• Philippines ranked 96 out of 139 nations in terms of availability of scientists and engineers in the 2010-2011 Global Competitiveness Report by the World Economic Forum.

Emigration of Science and Technology Educated Filipinos (1998-2006) and 2011 DOST SEI studies

Emigration of Science and Technology Educated Filipinos (1998-2006) and 2011 DOST SEI studies

Brain Drain Worsens• The number of scientists and engineers currently

engaged in research and development (R&D) activities across the Philippines is about 8,800

• In 2008, allocation for science and technology related activities in Philippines comes to 0.14% of GDP (half of Thailand's 0.26% and 1/5 of Malaysia's 0.69%)

• UNESCO Science Report 2010: researcher population density of the Philippines is 1 per 12,345 population in 2009. Singapore (one per 164), Thailand (one per 3,215), Indonesia (one per 6,172) and Vietnam (one per 8,695).

Emigration of Science and Technology Educated Filipinos (1998-2006) and 2011 DOST SEI studies

Emigration of Science and Technology Educated Filipinos (1998-2006) and 2011 DOST SEI studies

Current situation

• Lack of basic industries

• No program for rural industrialization, agricultural modernization

• No genuine infrastructure in energy, transportation, communications, information technology and basic services

National Industrialization

National industrialization

• Maximum self-sufficiency in industrial production of capital

• Provide intermediate and consumer goods for domestic needs based on national potential

• Ensure food security and self-sufficiency

Heavy industriesbase metalsbase metals, basic

chemicals, petrochemicals,pharmaceuticals, machinery,

precision instruments,electronics, and consumer

durables.

LEADING FACTOR

Light industriesprocessing of grains, cereals,

fruits and vegetables,beverages and dairy products,meat and poultry; aquaculture

and fisheries, clothing-footwear,textile and garment industries

and mass housing BRIDGING FACTOR

Agriculture(modernized and

mechanized)BASE

...as opposed to...• Current pattern of

production, investments, and trade

• Export of agricultural and extractive raw materials

• Importation of surplus finished goods, agricultural commodities and capital,

• Re-export of reassembled or repackaged imported manufactures

Why build national industries?

• Key to establishment of modern and diversified industrial economy

• Secure livelihood

• Satisfy basic needs

• Ensure rapid and sustained economic growth

• Achieve economic independence

Heavy industriesbase metalsbase metals, basic

chemicals, petrochemicals,pharmaceuticals, machinery,

precision instruments,electronics, and consumer

durables.

LEADING FACTOR

Light industriesprocessing of grains, cereals,

fruits and vegetables,beverages and dairy products,meat and poultry; aquaculture

and fisheries, clothing-footwear,textile and garment industries

and mass housing BRIDGING FACTOR

Agriculture(modernized and

mechanized)BASE

Why build national industries?

• Generate and mobilize domestic capital

• Generate domestic market

• Create Jobs

• Give living wage to workers

• Raise purchasing power of peasants/poor

• Produce primarily for domestic consumption not exports

Heavy industriesbase metalsbase metals, basic

chemicals, petrochemicals,pharmaceuticals, machinery,

precision instruments,electronics, and consumer

durables.

LEADING FACTOR

Light industriesprocessing of grains, cereals,

fruits and vegetables,beverages and dairy products,meat and poultry; aquaculture

and fisheries, clothing-footwear,textile and garment industries

and mass housing BRIDGING FACTOR

Agriculture(modernized and

mechanized)BASE

Is there economic basis for national

industrialization?• Comprehensively rich

natural resource base

• Metals, minerals, energy, biodiversity, marine resources

• Skilled forces of production

• Workers, peasants, professionals (incl. scientists and technologists)

Some features of a national industrialization

policy

Public sector ownership and operation of vital

industries• Nationalization of vital and

strategic enterprises

• Main source of raw materials

• Main lines of distribution

• All public utilities

• Social services (housing, health, education, social security)

• Dismantle and control big monopoly commercial operations

Limited foreign corporations and entities in manufacturing

enterprises• Foreign investments will be

allowed only in clearly unreplicable advantages in terms of technology transfer or access to capital, products and markets

• Strict regulation and supervision including entry of all forms of speculative capital

• May be allowed a minority equity share (not more than 40%)

Financing National Industries

• Public finance to maximize funds for the realization of the strategic plan

• Eliminate bureaucratic, military and other counterproductive expenditures (aka pork barrel)

• Remove automatic appropriation for foreign debt service

• Balance accumulation and consumption

• All fraudulent and behest loans shall be repudiated

PDAF network of releasesLegislator → NGO2007-2009size of lines correspond toamount of money transferred

Text

PDAF releases 2007-2009Legislator and NGOsthickness of lines = amount of money

The cost of pork barrel funds

Genuine national development with a

domestic industrial policy

Agriculture as base• Provide means of subsistence

• Source of industrial raw materials

• Vast market for industrial products;

• Main reservoir of labor power for industry and other sectors of economy

• Important source of accumulation funds

• Biotechnology, high yield farming, low inputs, efficency, etc.

Heavy industriesbase metalsbase metals, basic

chemicals, petrochemicals,pharmaceuticals, machinery,

precision instruments,electronics, and consumer

durables.

LEADING FACTOR

Light industriesprocessing of grains, cereals,

fruits and vegetables,beverages and dairy products,meat and poultry; aquaculture

and fisheries, clothing-footwear,textile and garment industries

and mass housing BRIDGING FACTOR

Agriculture(modernized and

mechanized)BASE

Heavy industry is leading factor

• Provide modern machinery, motor power, chemical fertilizers, pesticides, and other means of production for agriculture

• Produces various light industrial machines and light industrial raw materials

Heavy industriesbase metals, basic

chemicals, petrochemicals,pharmaceuticals, machinery,

precision instruments,electronics, and consumer

durables.

LEADING FACTOR

Light industriesprocessing of grains, cereals,

fruits and vegetables,beverages and dairy products,meat and poultry; aquaculture

and fisheries, clothing-footwear,textile and garment industries

and mass housing BRIDGING FACTOR

Agriculture(modernized and

mechanized)BASE

Heavy industry is leading factor

• Provides necessary conditions for technical innovation and development of the national economy as a whole and guaranteeing independence

Heavy industriesbase metals, basic

chemicals, petrochemicals,pharmaceuticals, machinery,

precision instruments,electronics, and consumer

durables.

LEADING FACTOR

Light industriesprocessing of grains, cereals,

fruits and vegetables,beverages and dairy products,meat and poultry; aquaculture

and fisheries, clothing-footwear,textile and garment industries

and mass housing BRIDGING FACTOR

Agriculture(modernized and

mechanized)BASE

Light industry as a bridging factor

• Produces necessary consumer goods for rural and urban areas

• Indispensable in raising living standards

• Requires smaller investments but provides quick returns

• Accumulation fund for expansion of heavy industry

Heavy industriesbase metals, basic

chemicals, petrochemicals,pharmaceuticals, machinery,

precision instruments,electronics, and consumer

durables.

LEADING FACTOR

Light industriesprocessing of grains, cereals,

fruits and vegetables,beverages and dairy products,meat and poultry; aquaculture

and fisheries, clothing-footwear,textile and garment industries

and mass housing BRIDGING FACTOR

Agriculture(modernized and

mechanized)BASE

Industrialization for whom?• Committed to people’s interests

• Science and technology for people’s requirements and needs

• Responsive and constantly plans

• Development and management

• Judicious use of natural resources

• Consciously linked on people’s needs

Heavy industriesbase metals, basic

chemicals, petrochemicals,pharmaceuticals, machinery,

precision instruments,electronics, and consumer

durables.

LEADING FACTOR

Light industriesprocessing of grains, cereals,

fruits and vegetables,beverages and dairy products,meat and poultry; aquaculture

and fisheries, clothing-footwear,textile and garment industries

and mass housing BRIDGING FACTOR

Agriculture(modernized and

mechanized)BASE

Greatest and continuing challenge is to make science and technology and progress serve the benefit of the majority

Role of Engineers and Scientists in National

Development

• Inventors, scientists, technologists, engineers, and other research and development workers are the key players in a country’s quest for industrialization

• S&T workers are the lifeblood of research, innovation and have important roles in the industry and manufacturing sector

What can we do?

• Unite

• Participate

• Serve

Man can find meaning in life. Short and perilous as it is, only through devoting himself

to society. –Albert Einstein

Take the Lead!

The Role Scientists and Engineers in Developing National Industries

Raymond P. Pingol