Locking in high growth with required investment in knowledge ‘suprastructure’

At the 23rd regional WEF Summit held here in Manila last month, Sushant Palakurthi Rao, WEF senior director for Asia, noted the Philippines’ solid economic growth gains. The challenge facing the country and its people is how to sustain such a high growth trajectory over the  long term. Research on the link between R&D and economic growth indicates that the key to lock in  the growth momentum is massive and judicious public investment in knowledge “suprastructure.”

A strong knowledge “suprastructure” (human and intellectual capital) is a sine qua non for the Philippines (PH) to become globally competitive. The Aquino administration cannot attain its medium-term development goals of generating mass employment and substantially reducing the country’s nagging poverty problem without an adequate supply of technical experts and skilled workers to expand and enliven the manufacturing sector. They are called for to provide knowledge-based solutions to problems to help spur rapid, sustained and inclusive economic growth. This will signal to local and foreign investors that the country’s technological innovation capacity is broad and deep.

Technological capacity requires public investments in R&D and higher education institutions (HEIs). A country’s gross expenditure for R&D (GERD) is closely associated with its GDP per capita (Figure 1 in Scaling Up paper featured in Star Science last week), implying the important role played by R&D in national progress. The UNESCO’s recommended norm for GERD is one percent of GDP but the Philippines’ most recent number is a measly 0.15 percent. Advanced and dynamic emerging economies in the region already have GERDs of more than or close to one percent of GDP (Figure 13 in the longer version of the Scaling Up paper — The Role of Science, Technology and Research in Economic Development, May 30, 2014). World Bank (2012) estimated that capital, operating and other recurrent expenditures, etc. in the Philippines need to grow from nearly $6,000 per student per year to about $10,000 (Table 2 in Scaling Up paper).

Scaling up public investments in tertiary education and R&D is only part of the story.  Given limited resources initially, GERD and related investments  at the tertiary education level  should be allocated to a few premier research and teaching universities, such as the Univertity of the Philippines (UP) — the National University — which should take the lead in R&D.   This will ensure  continuing significant strides towards a robust knowledge “suprastructure,” which in turn will attract investments and sustain  the economy’s high growth. To complete the loop, this will provide positive feedback by making available more resources from both the public and private sectors to further scale up R&D and HEI  expenditures. In sum, the country must focus first on improving the quality of graduates and inclusiveness while building quality teaching and research capacity in a few universities, such as UP.

Why the need for massive support for UP to lead in the building of the knowledge suprastructure?

UP has the largest pool of talent and expertise in the country.

It has the greatest number of faculty, researchers and students with MS and Ph.D. degrees and other high-level professional degrees. It attracts the best and brightest students from all over the country, including graduate students who are faculty members in SUCs (state universities and colleges) and private HEIs. UP faculty are asked to teach part-time in other HEIs and SUCs and many are enticed to transfer to these universities to teach in their medical schools and hospitals,  law, engineering and other professional schools and to become their top administrators. Top faculty in UP sit in CHED (Commission on Higher Education) technical working groups and lead DAP (Development Academy of the Philippines) training programs.

UP accounts for the bulk of all new knowledge generated in the country. It generates the highest number of academic publications per faculty, though (regrettably) lower compared with other ASEAN universities, and considerably lower still relative to its East Asian neighbors. Nevertheless, UP faculty have the greatest capacity to produce more MS and Ph.D. quality graduates in collaboration with high-level experts in leading foreign universities. This is directly needed because the Philippines  has the second to the lowest number of Ph.Ds in the region estimated at <100 PhDs per million population. Moreover, many of these are Ph.Ds in education which means that there are fewer than 100 Ph.Ds in science and engineering per million population.

UP has the greatest actual and potential capacity to produce technical experts and skilled  professionals required for high-quality R&D and innovation.

Quacquarelli Symonds (QS) World University Ranking (WUR) and Asian University Ranking (AUR) have consistently put UP at the top among Philippine universities (with ADMU a far second), as table shows. When the AUR scores are disaggregated, UP’s academic and employer reputations turn out much higher than the overall rank, implying that UP produces very good college graduates and professionals.

UP’s overall rank appears pulled down by its very low number of research publications per faculty and international inbound and outbound students and faculty. Notably, the citations per publication of UP faculty is high which indicates that the quality of UP research is good and competitive (http://www.topuniversities.com/asian-rankings). Clearly, if the number of R&D projects, the rate of completion of projects, the publications per faculty, and international faculty and researcher mobility and collaboration are significantly increased, then UP’s international ranking will greatly improve. This all depends on available funding to significantly increase UP’s faculty pursuing R&D, and funds for R&D projects as well as for internationalization to support international R&D collaboration.

UP has embarked on internationalization to prepare for ASEAN integration and in response to globalization in general. 

The quality of UP undergraduate and graduate education is being raised to international standards. ODEL (Open and Distance e-Learning) will be mainstreamed to complement traditional teaching and learning methods. Niches of competitive advantage have been identified in each of the UP system’s constituent units (CUs). UP will showcase its strengths and expertise to the international academic community, e.g., GE (General Education) courses that demonstrate our fused knowledge of Eastern and Western philosophy, art and culture, and the humanities and social sciences, taught in expert English to attract foreign faculty and students to UP. These interactions with foreigners will foster “internationalism” and enrich the lives and broaden the world views of UP faculty and students. UP will seek linkages with leading foreign universities to further strengthen STEM (science, technology, engineering, and mathematics) and get UP faculty and students to pursue research and advanced training in these universities.

ASEAN integration poses both serious threats and promising opportunities with the free flow of goods, services, capital and personnel. UP must not suffer from an inferior or unfair stance in competition with leading universities in the region that are likely to recruit the best minds in UP by offering significantly higher compensation. Further, it must be able to attract foreign-trained Filipino and foreign Ph.Ds to become faculty and researchers in UP;  but obviously, a competitive compensation system is necessary.

UP is currently embarking on private-public partnerships and supporting entrepreneurships.

In line with its mandate to contribute toward a globally competitive country, UP is now partnering with industry to support its physical infrastructure development. There are start-up companies that could grow to SMEs being supported by UP. Externships of UP faculty and students in industry and SMEs are being arranged. However, to significantly contribute to inclusive growth, the private sector should help build and maintain UP’s knowledge suprastructure, i.e., production of technical experts and a skilled workforce in various investment areas.

UP is uniquely positioned to ensure continuity and sustainability of high-quality R&D, innovation and knowledge-based problem solving in PH. 

The unique setup of UP ensures that viable R&D groups can be created and sustained. A research group consists of a hierarchy or suprastructure organization of individuals led by a senior faculty with a strong R&D track record, middle-level and junior faculty and researchers, postdoctoral fellows, Ph.D. students, MS students, undergraduate students, and highly trained technical staff. In other words, there is an assembly line, pipeline or the building blocks for training experts. There are already leading units in UP Diliman that have productive research groups such as the National Institute of Physics, Marine Science Institute, Institute of Biology, and School of Economics. There are several more in UP Manila and UP Los Baños.

UP research groups in the various CUs, collaborating with foreign experts and working together with SUCs and other HEIs, are in a position to sustain high-quality R&D output for uptake by government, local communities, and industry.

Already many UP faculty members and researchers are on secondment to key government agencies or serve as consultants to key government agencies and industries. Many projects funded by CHED, DOST, DA, and DOH are implemented by UP. Thus, as we grow the number of Ph.D. faculty in UP, it makes eminent sense to give more R&D funds to UP for greater efficiency, sustainability and continuity, since generations of UP faculty, researchers and graduate students continue to contribute invaluable service to the country through knowledge generation and innovation despite changes in the national government and political administration.

With UP’s reach being felt throughout the country through its strategically located campuses (currently, seven CUs — UP Diliman, Manila, Los Baños, Baguio, OU or Open University, Visayas and Mindanao; one college — UP Cebu; and in 2015, the UP Professional Schools in BGC in Taguig), an all-inclusive  “hub-and-spokes model” of R&D can be  pursued for academe, and with government and industry, in various parts of the country.

UP has a seal of transparency and good governance but needs enabling laws and policies to fulfil its mandate as a research-intensive university at the forefront of the national innovation system.

Funds in UP do not get lost to corruption. Funds are used for their intended purposes.   However, presently, research and innovation are hampered by disabling, constraining laws and policies, quite apart from the problem of an uncompetitive (and archaic) compensation policy and practice. Thus, if UP had a special, expedited procurement process for spending R&D funds, then R&D output would become significantly faster and at a higher level.  

Aside from the bureaucratic process or tedious red tape involved in R&D procurement, there are restrictions on granting medium- to long-term work permits or permanent employment status to foreign professors in UP, and the granting of study permits and visas to foreign students in UP. These obstacles or hurdles should be drastically eased and the laws or policies appropriately amended, in order to transform education and knowledge production (R&D) to an efficient and vigorous enterprise in UP and in the country in general.

The Philippines registered a GDP of over $250 billion in 2013, one percent of which is $2.5 billion or P110 billion — UNESCO’s norm for GERD.

To cap, it is now high time to appreciate the importance of investing in ideas, in human  and intellectual capital, i.e., in the country’s suprastructure. We have repeatedly discussed and allocated hundreds of billions of pesos to build roads and highways and other physical infrastructure, as if all these are all what matter to lock in a high growth trajectory of the Philippine economy. But what is even more important are people — the thinkers, the innovators and  technical experts — who can provide solutions to our problems and develop new technologies that allow the country to show to the world not only competitive products but also creative ideas and ways of doing things.   The Philippine government ought to invest at least tens of billions of pesos to build the country’s knowledge suprastructure, its information and innovation highways. 

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Dr. G.P. Padilla–Concepcion is vice president for academic affairs of the UP System and professor of the Marine Science Institute, UP Diliman, Dr. R.L. Clarete is dean of the School of Economics, and UP Diliman. Dr. E.M. Pernia is professor emeritus of the School of Economics, UP Diliman. The authors are members of a committee created by UP president Alfredo E. Pascual to provide the background and rationale for greater investment in higher education and R&D in UP. Ammielou Gaduena and Adrian Mendoza, Ph.D. candidates at the UP School of Economics, extended very able research assistance. E-mail at gpconcepcion@up.edu.ph.