What Drives Filipino Firms to Innovate

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This Policy Note assesses the state of the innovation ecosystem in the Philippines. Among others, it notes that micro, small, and medium enterprises (MSMEs) do not innovate as much as large firms. It also finds that firms consider the government and public research institutes as the least important source of information on innovation. To encourage MSMEs to take risks and innovate, the study urges the government to tailor its interventions to sector-specific needs of firms, especially in accessing finance, knowledge, and skills. While large firms already have financial and human resources, it also reminds the government they will still need assistance in making a paradigm shift toward seeing the value of going beyond their knowledge and cooperation networks for innovation. The study also calls for an inventory and evaluation of existing mechanisms to strengthen the free flow of information within the innovation ecosystem.