Philippine Journal on Innovation & Entrepreneurship

Volume I, Number 1 : December 2013

ISSN 2350-7829

PHILIPPINE JOURNAL ON INNOVATION & ENTREPRENEURSHIP

Published by Small Enterprises Research and Development Foundation for University of the Philippines Institute for Small-Scale Industries

VATION & ENTREPRENEURSHIP tere_1_for print.indd 4

3/13/14 4:41 PM

CONTENTS

FOREWORD .................................................................................................................. i Status, Prospects, and Strategic Options of Buntal Fiber Industry in Marinduque ......... 1 Michael V. Capi単a, Ma. Tessa A. Llaguno, Verna Liza L. Capi単a, and Faustino Q. Arrienda II

Functional Managerial Competencies of Women Managers and Entrepreneurs .......... 15 Lily P. Custodio

Business Ideas That Aspiring Entrepreneurs Are Conceiving.......................................25 Ian Jester M. de Vera

Proceedings of the Conference-Workshop on Entrepreneurship Education ............... 37 Proceedings of the Roundtable Workshop on Enterprise Upgrading ...........................58 Proceedings of the Roundtable Discussion on Priming Philippine SMEs for the 2015 ASEAN Integration .......................................................................................... 86

PHILIPPINE JOURNAL ON INNOV tere_1_for print.indd 1

3/13/14 4:41 PM

|Philippine Journal on Innovation & Entrepreneurship |

i

FOREWORD The UP Institute for Small-Scale Industries (UP ISSI), in cooperation with the Small Enterprise Research and Development Foundation (SERDEF), takes Philippine Journal on Innovation and Entrepreneurship (PJIE).

The topics covered by the journal as charted and delineated are indeed diverse. Nonetheless, the maiden issue boasts of the rich mixture generated. Three well-researched articles and three proceedings of very recent conferences organized by the Institute all covering topics like enterprise development, entrepreneurship education, human resource management and SME policy development are thus ña, Ma. Tessa A. Llaguno, Verna Liza L. Capiña and Faustino Q. Arrienda II showcases the Status, Prospects, and Strategic Options of Buntal Fiber Industry in Marinduque. It presents substantial information on the buntal industry for possible expansion of production and of market.

On the other hand, the second article, Functional Managerial Competencies of Women Managers and Entrepreneurs by Lily P. Custodio, is a descriptive study of the managerial competencies of women managers and entrepreneurs in Catanduanes. The executives’ and their subordinates’ perceptions of the functional management areas of the women managers and entrepreneurs are tabulated. It is presented in this study that the managerial competencies of women managers and entrepreneurs in Catanduanes as regarded by them and their subordinates are highly important in the discharge of managerial duties and functions.

The third article, Business Ideas That Aspiring Entrepreneurs Are Conceiving, by Ian Jester M. de Vera, presents the different business ideas of participants in the Start Your Own Business (SYOB) program of UP ISSI. The study reveals that more entrepreneurs are interested in doing business in the service sector and not in the manufacturing sector. three recent conferences mounted by UP ISSI. ConferenceWorkshop on Entrepreneurship Education held on 11 January 2011. These proceedings present the different issues, challenges and innovations surrounding entrepreneurship education ranging from the curriculum design, instructional materials development, learning methodologies and research gaps. They also list overall recommendations from the various stakeholders for both entrepreneurship education and research.

tere_1_for print.indd 1

3/13/14 4:41 PM

ii

|Philippine Journal on Innovation & Entrepreneurship |

The second proceedings pertain to the Roundtable Workshop on Enterprise Upgrading jointly presented by the UP ISSI and Deutsches Institut F端r Entwicklungspolitik (DIE) on 06 May 2013. These proceedings catalog the presenters to enterprise upgrading. These proceedings also record the various action plans from the academe, industry and government.

The third proceedings deal with the Roundtable Discussion on Priming Philippine SMEs for the 2015 ASEAN Integration held on 13 August 2013. These proceedings cover the SME policy development area of the journal. The proceedings record the different perspectives of various key players from the government, industry and academe on the regional integration.

While enterprise development, entrepreneurship education, human resource management and SME policy development have been fortunately other possible topics of the journal such as marketing and customer management, ergonomics and safety, environment and energy management and green management. external and internal agents and agencies. First, we would like to express our gratitude to the authors and editors who have submitted articles and proceedings to the PJIE. Much thanks are also conveyed to the various partners of the Institute in mounting the abovementioned conferences. Heartfelt thanks are also due to the longtime institutional partner of the Institute, SERDEF, in collaborating with the Institute in this project.

Additionally, acknowledgments are also due to the members of the Editorial Board for rigorously and painstakingly evaluating the manuscripts and constructively commenting on them for better results. The efforts of the copy editor and the managing editor are similarly recognized.

While coming up with a maiden issue is already a daunting feat, maintaining a journal and publishing even more issues, however, are greater tasks that lie ahead. UP ISSI cannot afford to remain complacent, therefore, in just

May every reader discover entrepreneurial gems in the articles and proceedings. society. And may many more unravel the pioneering, innovating, and enterprising tendencies, advocacies and activities that every copy of this journal promises.

Nestor O. Ra単eses Issue Editor December 2013

tere_1_for print.indd 2

3/13/14 4:41 PM

1

Status, Prospects, and Strategic Options of Buntal Fiber Industry in Marinduque1 Michael V. Capiña2, Ma. Tessa A. Llaguno3, Verna Liza L. Capiña4, and Faustino Q. Arrienda II5

ABSTRACT The popularity of buntal-based handloom products has raised the demand thus limiting the expansion of production by local and export markets. Thus this study was conducted to present information on the status of the buntal industry as well as to identify investment and entry points for the industry.

The project study adopted Model Two of the strategic planning model of major sources of buri buntal producers, followed by analysis of the income generated from buri extraction.

Information on the current marketing channel system for the buntal produced in Data were gathered through a survey of key informants of the industry in six towns and 60.55% of the barangays of the province. Ocular visits to the areas were done. Secondary data were also used to complete information regarding the industry. Estimates showed that buri income of extractors of buntal is PhP 5,420.10.

It was concluded that with the abundance of raw materials and of skills in and new product development, the buntal opportunity for employment and augmentation of income to farmers, housewives, out-of school youths, and even working students.

1 funded by the Commission on Higher Education University of the Philippines Los Baños (UPLB), Laguna Zonal Research Center for Regions IV A and IV B (2010). Cite as ”,1 Philippine Journal Innovation & Entrepreneurship 1, (1-14).

2 Assistant Professor II, 3 Agricultural Technologist, State University (2006).

4 Assistant Professor I, 5 Assistant Professor, in Management, UPLB (1988).

tere_1_for print.indd 1

3/13/14 4:41 PM

2

|Philippine Journal on Innovation & Entrepreneurship |

INTRODUCTION Corypha elata (Roxb). The palm has large fan-shaped leaves grouped into a round outline up to three meters wide. It reaches a height of 20-40 meters. Buri is the mature leaf of the palm, is the young shoot or leaf, while buntal is the extract from the petiole of the leaf.

Buntal handloom weaving is one of the more important income-generating

Buyers consist of local and foreign tourists, exporters, entrepreneurs, traders, and middle persons and a few housewives, mostly traders and retailers from both the export and local markets. To this date, the province recognizes initiatives.

The rising popularity of its products, however, has resulted to marked

handloom weaving. This limits the expansion of production for both the local and export markets.

METHODOLOGY The project study adopted the strategic planning model of McNamara, particularly Model Two, which is Issue-Based (or Goal-Based) Planning with

followed. Information on the current marketing channel system for the buntal to identify strategic options that can be adopted to develop the industry.

tere_1_for print.indd 2

3/13/14 4:41 PM

3

FIGURE 1 BELOW IS THE PARADIGM OF THE STUDY.

Survey & Ocular visitation

Players in Buntal Fiber Industry

Internal Environment Analysis

Inventory of Buri Palm Plantation & Buntal Fiber Producers Profiling of Buntal Fiber Producers & Assessment of Socio-economic Impact Supply Chain, Demand & Marketing Analysis

SWOT ANALYSIS

STRATEGIC OPTIONS

External Environment Analysis

RESULTS AND DISCUSSION

Land Area Planted with Buri

informants (Barangay Captains) as barangays with buri palms. However, a survey the total number of barangays in the province) have areas of varying sizes planted with buri.

Table 1 below shows the age of buri plants thriving in the province. Three to eight-year-olds buri can be considered young and still not suitable for extraction Twenty-one-year-olds and above are considered old and will not produce as much

tere_1_for print.indd 3

3/13/14 4:41 PM

4

|Philippine Journal on Innovation & Entrepreneurship |

AGE AND NUMBER OF BURI PALMS PER LAND AREA IN THE SIX MUNICIPALITIES OF THE PROVINCE OF MARINDUQUE

Age

Mogpog

Buenavista

Boac

Torrijos

Gasan

Sta.Cruz

Total number

Approximate Land Area (in hectares)

3-8 Years

2,767

412

24,776

15,051

978

18,002

61,986

99.18

9-15 Years

2,729

213

6,569

2,541

152

7,090

19,294

123.48

723

152

1,232

1,264

131

2,676

6,178

61.78

541

60

362

905

13

1,553

3,434

34.34

95

15

111

270

21

242

754

7.54

6,855

852

33,050

20,031

1,295

29,563

91,646

326.32

16-20 Years 21 Years & above Flowering Stage TOTAL

SOURCE: FIELD SURVEY There is a total of 91,646 buri palms in the province. Of these, 61,986

or buri wine. The above-mentioned palms are planted in an estimated total area of 326.32 hectares in the province. Of the total areas, 99.18 (30%) are planted with 3 with 16 to 20-year-old. A total of 41.88 (13%) are planted with old and declining palm trees.

Figure 2 shows that the areas where the palms are concentrated are in the towns of Sta. Cruz, Boac, and Torrijos. Gasan and Buenavista have the least number of areas planted with buri following the town of Mogpog.

ANNUAL PRODUCTION OF HAND PULLED BUNTAL IN KILOGRAMS Municipality

Annual Production (in kg.)

Average

2006

2007

2008

2009

597.01

461.80

348.15

598.60

501.39

Torrijos

0

534.10

521.04

749.60

451.19

Sta. Cruz

0

0

9.00

50.00

14.75

597.01

995.90

878.19

1,398.20

967.33

Boac

Total

SOURCE OF DATA: FIDA MARINDUQUE

tere_1_for print.indd 4

3/13/14 4:41 PM

5

Most of the buri trees around the province are natural stands. Very few were farmed such that no planting pattern was observed among the stands, as these were scattered around the areas. Likewise, the young trees are wildlings and are clustered around the mother trees. Two varieties of buri are growing in the province: Red Buri or Limbahan and White Buri or Lupisan. Of the two varieties, White Buri is more common among the six towns, with Sta Cruz having more number.

Based on the farmers’ past experiences, buri palm can be harvested twice a year and can produce three (3) petioles per harvest that can yield approximately in the province ranging from 9 to 20 years old and considered good sources of petioles for buntal production. However, there are three municipalities not a total of about 4,100 buri palms can be found. Study 1 further revealed that out

Financial projections on the potential yield of available raw materials in the province were made, based on primary data gathered from FIDA and the farmers to determine the potential of the industry for future expansion. About 38.5 tons per year of buntal can be produced and can generate sales of P 10.3 million pesos per year.

Extractors Of the 132 barangays, buntal extractors can be found in only 21 barangays be found in decreasing number in four of the six towns of the province, namely, Sta.Cruz, Boac, Torrijos, and Mogpog. Buri farmers in the towns of Gasan and However, most of the older ones are ages 51 and above. Majority of the buntal labor, the task is shared by husband and wife, with the latter working longer hours than men because the latter tend to concentrate on other jobs, mostly paid labor.

Fiber extraction is tediously done by women after all household chores are done.

In terms of educational attainment, extractors had either elementary or

producers as well as on the job for more than 10 years. The number clustered numbering 39%, of whom 61.36% are active and 38.64% are inactive. Of the active

tere_1_for print.indd 5

3/13/14 4:41 PM

6

|Philippine Journal on Innovation & Entrepreneurship |

while 88.24% have stopped for more than 5 years.

Reasons mostly cited by the respondents for being inactive are as follows: (1) inavailability of buyers, (2) poor collections of dues / payment terms, (3) calamities resulting in considerable damage to the buri trees, and (4) old age. The as their relatives, mostly parents.

Income Vis-a-vis Production of Buntal Fiber Income

P5,000.00 per month. A little less earn less than P500.00 and less than P3,000.00 per month followed closely by those who earn P501.00 to P1,000.00.

If production is done on a daily basis, it is estimated that producers of buntal in the municipalities of Torrijos, Sta. Cruz, and Boac earn a gross amount in Torrijos and Sta.Cruz, respectively. The variance in the level of gross income generated by each of the three municipalities is caused by the varying levels of

not considered in computing returns. The producers compute income mostly the production process. Hence, costing was done based on the assumptions of were considered from the gathering and selecting of buri petiole, up to the last Expenses for buntal production are generally comprised of the cost of raw materials (buri petiole), stripping wood, hauling, and labor cost. Cost of labor receives the greatest percentage of the total expenses with an average of

stripping wood and basahan (used clothing), respectively. Labor is higher in the town of Boac, at P200.00 per day, followed by Torrijos and Sta.Cruz at P181.25 and P 134.21, respectively. Labor costs vary because of the time allotted by the farmers in extracting buntal, since most of them work part time only and consider production cost an aggregate of P50.00, P35.26 and P 35.00 for Boac, Sta. Cruz, and Torrijos, respectively, ranging from 10-15 pieces of petiole at a length of 1.2 –

tere_1_for print.indd 6

3/13/14 4:41 PM

7

If the cost of labor is considered, the farmer producers will suffer a daily

income for a producer with 6-10 dependents.

Production of Buntal Fiber processes. It includes four major activities: (a) harvesting and collection of the divided into different activities is shown in Figure 3 below.

Extraction can be done by hand, retting, and pounding. However, 95% of the producers do hand or manual extraction. Most of the producers extract on a weekly and per order basis (34.88% and 30.23%, respectively). The rest do extraction either daily, irregularly (only when not busy with other work) and monthly (18.60%, 9.30% and 6.98%, respectively).

tere_1_for print.indd 7

3/13/14 4:41 PM

8

|Philippine Journal on Innovation & Entrepreneurship |

approximately 1.5 kilograms or 10-15 marissa or small bundle, approximately

– 1.50 kg) kg – 2.25 kg) per day. Price per bundle ranges from P250.00 – P300.00. from 2006 to 2009. One half of the total volume of the supply comes from the municipality of Boac, followed by Torrijos and Sta. Cruz shown in decreasing order in Table 2. The data indicate that there is irregularity in the supply of buntal in the province, generally attributed to the long, tedious, and laborious manual regular producers, hence resulting in irregular and unstable supply despite an increasing volume.

The low level of buntal production is due to the whole process which is long, tedious, laborious, and done manually. Likewise, more producers are part timers than regular producers. Part-timers are engaged in income-generating and and only on per order basis.

MARKETING-CHANNEL SYSTEM FOR BUNTAL PRODUCED FIGURE 4 SHOWS THE DISTRIBUTION FLOW OF BUNTAL FIBER PRODUCED IN THE PROVINCE OF MARINDUQUE.

tere_1_for print.indd 8

3/13/14 4:41 PM

9

producers, (b) local traders or buntal buyers inside the province, (c) outside products such as handloom weavers in the province), (e) processors & buyers of balikbayan, foreign and local tourists), (g) exporters, and (h) direct buyers outside the country. When there is a buntal surplus, producers sell to buyers in Quezon. Likewise, when there is a shortage in supply in the province, local processors purchase buntal from Quezon. From

the processors or middlepersons outside the province for the domestic and export markets. bags, slippers, window blinds, attachĂŠ cases, table accessories, wall paper, screen dividers, decorative pillows, desk organizers, placemats, soft brooms, and other

tere_1_for print.indd 9

3/13/14 4:41 PM

10

|Philippine Journal on Innovation & Entrepreneurship |

processed in the province include the following: (1) local processors in Manila,

the province (2%). FIDA cited the major importing countries of buntal products export earnings of US$368,885. two major processors of buntal-based products in the province is estimated at 84 kilograms or approximately 4,032 kilograms per year. This shows that demand produced by the local producers, thus indicating an established market for buntal

Majority of the products of buntal processors in the province are woven

hats, and wallets.

Strengths, Weaknesses, Opportunities and Threats to the Industry Environmental scanning based on the primary and secondary data gathered resulted in the following SWOT Analysis: SWOT MATRIX Opportunities O1. Proven adaptability of the buri palm in the province guarantees a sustainable supply of raw materials

Threats T1. the purchasing power of potential market T2. Stiff competition from other

O2. Enacted ordinances and laws on a healthy environment for the citizens (via ecological conservation and promotion of environmentally preferable products or EPPs over environmentally adverse products) opens market

T3. Possible conversion of agricultural lands into commercial areas

and its products

tere_1_for print.indd 10

3/13/14 4:41 PM

11

Strengths S1. Abundant source of raw materials indicated by natural stands of buri trees even under minimum care and management S2. Enough number of skilled buntal S3. Transferrable extraction S4. Established marketing channels from buntal producers to buntal product processors to S5. Alternative source of additional income for farmers, processors, and loam weavers in the province

1.

SO Strategies

ST Strategies

S1-S6-O1-O2: Use available resources and competencies to improve production level, sustain current market chain, and take advantage of potential market opportunities through collaborative activities among the concerned government agencies, for example:

S1-S6-T1-T3: 1.

both the provincial and local governments to formulate or-

A. Conduct workshops represented by all stakeholders of the Buntal

conservation and strict implementation of enacted laws mandating the use of organic and raw materials, e.g. use of low-cost buntal based shopping bags or handmade paper

come up with a more comprehensive Financial and Economic ability of the Buntal Industry and design an Investment Portfolio that would guide future invest-

to promote and increase awareness of stakeholders and target customers on the use of environmentally preferable products (EPPs) over environmentally adverse products.

B. Form and organize a cooperative pool of all available resources thus allowing a full-scale production that will yield them higher returns.

Recommend FIDA to take the initiative to call for a consortium among the stakeholders of the Buntal Fiber Industry

2.

Recommend to concerned agencies in the province to strengthen linkages with potential investors and customers to expand market.

S6. Robust government support and interventions (DTI and FIDA)

tere_1_for print.indd 11

3/13/14 4:41 PM

12

|Philippine Journal on Innovation & Entrepreneurship |

Weaknesses W1. Laborious, tedious, and long manual extraction of buntal resulting

WO and WT strategies W1-W2-O1-O2 –T1-T3: 1. tapping competencies of various agencies such as:

production W2. Limited variety

A. School (MSC) of Agriculture R&D Unit and FIDA for the development of a technology that will mechanize the extraction of buntal

products / sluggish product development limiting expansion potential both in the local and export market

new product development, and (3) the publication of a manual to institute a standardized practice of

B.

the DOST for possible funding support needed for technology development, product innovation and new product development, and publication of a production

C.

the DTI for the holding of Investment Conferences, establishment of productive linkages, and extensive promotional activities to retain and expand local and foreign

D.

the CDA and MSC Extension Unit for the conduct of workshops and trainings for buntal producers as well as the buntal product procesand strengthen their respective business functioning.

STRATEGIC OPTIONS Based on the information gathered and the foregoing SWOT analyses, the 1. Use available resources and competencies to improve production level, sustain current marketing chain, and take advantage of potential market opportunities through collaborative activities among concerned government agencies so as to: a. Conduct workshops represented by all stakeholders of the Buntal Fiber

tere_1_for print.indd 12

3/13/14 4:41 PM

13

and (2) design an Investment Portfolio that would guide not only the existing

b. Form and organize a cooperative through the Cooperative Development pool of all available resources, thus allowing a full-scale production that will yield

such as: FIDA for (a)the development of a technology that will mechanize the extraction publication of a manual to institute a standardized practice of buri selection and b. DOST for possible funding support needed for the technology development, product innovation and new product development, and publication c. DTI for the holding of Investment Conferences, establishment of productive linkages, and extensive promotional activities to retain and expand d. CDA and MSC Extension Unit for the conduct of workshops and

e. FIDA to take the initiative to call for a consortium among the stakeholders ecological conservation and strict implementation of enacted laws mandating the use of organic and raw materials or environmentally preferable (EPPs) products, (b)organize campaigns to promote and increase awareness of stakeholders and potential customers on the use of EPPs over environmentally adverse products.

CONCLUSION Although buri palms are natural stands, there are enough in the province minimum management such that plans to increase their number will be a viable development project. There are enough buntal producers whose skills can be further developed through training and who can be partners in technology transfer

tere_1_for print.indd 13

3/13/14 4:41 PM

14

|Philippine Journal on Innovation & Entrepreneurship |

The following are the major issues and concerns confronting the buntal producers in the province that need to be dealt with: (a) laborious and tedious buntal buyers. The following are key issues and concerns faced by the buntal

slight impact on the economic well-being of the producers, due to the intermittent and low level of production, the income derived from buntal production appears process, by product development, and by identifying market opportunities. and loom weaving, along with intensive product innovation and new product augmented income for more farmers and housewives, out-of school youth, and working students. While buntal is the only existing product out of buri, other uses of buri can be exploited and developed into new industries.

REFERENCES 1.

Edralin, D. M. (2002). Business Research Concepts and Applications 2nd Edition.

De La Salle University.

2.

Fiber Industry Development Authority (FIDA). (2004). Abaca Production Enhancement Project: Terminal Report. Fiber Industry Development Authority, Plan International and Department of Agriculture.

3.

The Marinduque State College Journal of Research and Innovation 1 (1&2).

4.

5.

6.

Authenticity Consulting, LLC. The Marinduque State College Journal of Research and Innovation 3 (2).

Williams J. B. et al. (1998). Community Outreach Center Research Manual.

AGRITECH. (May 2009)

8.

http://www.ptri.dost.gov.ph/human%20face%20it/pride.htm (May 2009)

9.

http://www.managementhelp.org/plan_dec/str_plan/models.htm (May 2009)

10. http://www.managementhelp.org/plan_dec/str_plan/str_plan.htm (May 2009) 11.

tere_1_for print.indd 14

2009)

(July 30,

3/13/14 4:41 PM

15

Functional Managerial Competencies of Women Managers and Entrepreneurs1 Lily P. Custodio2

ABSTRACT This study determined the importance of using functional management areas in discharging the duties and functions of organization executives. The managerial competencies of women managers and entrepreneurs in Catanduanes were investigated. The descriptive method of research was used with the included women managers and entrepreneurs in the province and three of their study ascertained that: (1) the managerial competencies of women managers and entrepreneurs as perceived by them and their subordinates are highly important on (a) strategic thinking and scenario-building, (b) analysis, problem solving, and decision making, (c) planning and organizing, and (d) change management executives had similar perceptions of their competencies on the 13 functional management areas investigated in the study. Recommendations are offered, and managerial implications of the study are emphasized.

1 Cite as Custodio, Lily P., (2013). “Functional Managerial Competencies of Women Managers and Entrepreneurs�, 1 Philippine Journal on Innovation & Entrepreneurship 1, (15-24).

2 Professor VI, (1996).

tere_1_for print.indd 15

3/13/14 4:41 PM

16

|Philippine Journal on Innovation & Entrepreneurship |

INTRODUCTION More and more women are joining organizations as holders of key positions in national and local governments, universities, business corporations, there is a dearth of studies on managerial competencies of women, particularly in Catanduanes.

Managers and entrepreneurs execute a number of managerial functions inherent in their position. The competencies of women managers and entrepreneurs were evaluated in accordance with the level of importance of the management functional areas in discharging the duties and functions of executives in organizations. Executives are expected to possess these competencies because their managerial role is of critical importance to the success of the organization, since they are the focal point of decision-making. The realization of the mission, goals, and objectives is paramount to how they run the affairs of their respective Soriano and Nhert (1990) emphasized that the personality of the chief executive is a determinant factor in the success of any organization. This personality competencies which are demonstrated or mastered in a job (UNIDO, 2002), as observed in the research on how executives performed their functions along 13 functional areas in management. These areas include the following: (1) (2) (3) (4) (5)managing small organizational groups (Fraenkel and (6) (8) (9) (10) (11) (12) (13)interviewing.

Given these concerns, the managerial competencies as perceived by the managers and entrepreneurs, and their subordinates were determined.

Differences in perceptions of such competencies between the women managers and entrepreneurs, and their subordinates were evaluated. Any difference in perceptions along the 13 functional management areas was likewise investigated.

tere_1_for print.indd 16

3/13/14 4:41 PM

17

METHODOLOGY The study focused on determining women managers’ and entrepreneurs’ competencies using 13 functional management areas. The descriptive method employed.

Respondents of the study include women deans and directors in Catanduanes State Colleges (CSC), women area supervisors and principals in DepEd Catanduanes, women bank managers, and women entrepreneurs in Catanduanes.

To countercheck the responses given by the managers/entrepreneurs, three of their subordinates, regardless of gender, were included in the survey.

Convenience sampling was used in identifying the women managers and entrepreneurs. Nineteen managers and 13 entrepreneurs became the respondents of the study. Quota sampling was used in identifying the subordinates. Three subordinates participated for every manager/entrepreneur-respondent or a total of 96 subordinates.

subordinates (one for each manager/entrepreneur).

The women manager/

indicate the extent of importance in executing the managerial duties and functions

percentage, weighted mean, and t-test were the statistical tools used.

RESULTS AND DISCUSSION Table 1 shows the importance of managerial competencies in discharging duties and functions as perceived by the managers and entrepreneurs and their subordinates. They reported that the competencies along the different functional management areas are highly important in discharging managerial duties and thinking and scenario-building. They must also be competent in analyzing, problem solving, and decision making in order to discharge their duties and functions effectively. This result parallels the reports of Bigelow (1991), Custodio (2000b), Roffey (2001) and Yau and Sculli (1990).

Individuals holding managerial positions are expected to envision the future of the organization by developing procedures and operations to achieve its goals and objectives through planning and organizing. Roffey (2001) reported that Filipino women managers are good in planning and organizing, which is consistent with other Western management theory and research conducted by Boyatzis (1982,

tere_1_for print.indd 17

3/13/14 4:41 PM

18

|Philippine Journal on Innovation & Entrepreneurship |

Managerial competence includes developing and building an environment This can only be achieved through change management, which the respondents considered as highly important in discharging managerial duties and functions.

TABLE I. MANAGERIAL COMPETENCIES OF WOMEN MANAGERS/ ENTREPRENEURS IN CATANDUANES AS PERCEIVED BY THEM AND THEIR SUBORDINATES

1. Strategic thinking and scenario- building

Women Managers/ Entrepreneurs and Subordinates

Women Managers/ Entrepreneurs

Subordinates

QN

QL

QN

QL

QN

QL

4.54

4

HI

4.04

4

HI

4.29

4

HI

2. Analysis, problem solving and decision making

4.64

5

EI

4.31

4

HI

4.48

4

HI

3. Planning and organizing

4.60

5

EI

4.41

4

HI

4.51

4

HI

4. Change management

4.47

4

HI

4.28

4

HI

4.37

4

HI

4.21

4

HI

4.26

4

HI

4.24

4

HI

organizational groups 6. Team Leadership

4.23

4

HI

4.31

4

HI

4.34

4

HI

7. Information management

4.40

4

HI

4.43

4

HI

4.37

4

HI

8. Innovation and creation

4.43

4

HI

4.27

4

HI

4.35

4

HI

4.18

4

HI

4.12

4

HI

4.15

4

HI

4.54

4

HI

4.34

4

HI

4.44

4

HI

11. Facilitation and group moderation

4.32

4

HI

4.26

4

HI

4.27

4

HI

12. Presentation and public speaking

4.41

4

HI

4.24

4

HI

4.32

4

HI

13. Interviewing

4.43

4

HI

4.28

4

HI

4.35

4

HI

LEGEND: 5 = EXTREMELY IMPORTANT 2 = QUANTITATIVE RESPONSE

4 = HIGHLY IMPORTANT 3 = QUALITATIVE RESPONSE

1 = WEIGHTED MEAN

Competencies on managing small organizational groups were also considered highly important in managerial leadership as depicted by the responses of the women managers/ entrepreneurs and their subordinates. This shows that executives must be able to create an atmosphere where the various

tere_1_for print.indd 18

3/13/14 4:41 PM

19

highly important in discharging managerial duties and functions. This functional management area depicts a scenario in which leadership promotes a healthy interaction that creates group dynamism and stimulates participative management The need to manage information effectively in an organization is associated with different indicators of competencies of those in managers and people to communicate across intra-organizational and inter-organizational boundaries (Murphy, 2008).

According to Overman (1993), there are people in the organization who ways with more effective action. In this regard, the respondents rated the competencies involved on innovation and creation as highly important. Heads of organizations are the most pivotal in building consensus among the parties involved in mediation and negotiation.

Competencies in mentoring and coaching mean that managers in organizations have supported their subordinates. The latter’s work assignments, career, and succession trends. For these competencies, respondent-subordinates have provided a rating of highly important. Bittel and Newstrom (1990) awards are given and employees’ recognition is made in the company’s newsletter.

Competencies in facilitation and group moderation as perceived by the women executives imply that they practice management by participation. This practice enhances people’s willingness to work with other employees toward common goals Both managerial and subordinate in which respondents depicted a scenario in which these executives are good public speakers, as expected of them.

role of spokesperson to a great extent. Moreover, these executives considered the competencies on interviewing as highly important because they are expected to be effective in panel interviews since they lead discussions as key actors in conferences and seminars.

The perceptions of the women managers/entrepreneurs were analysis, extremely important in discharging their duties and functions. This result parallels with the advocacy that executives must be competent in identifying, analyze and solve problems under conditions of incomplete information and uncertainty. Custodio’s (2000a) study on the careers of academic executives in Catanduanes reported that and functions in both public and private organizations.

tere_1_for print.indd 19

3/13/14 4:41 PM

20

|Philippine Journal on Innovation & Entrepreneurship |

The subordinates perceived that women managers/entrepreneurs should consider the 13 functional management areas as highly important in discharging their managerial duties and functions. This means that as far as the subordinates are concerned, there is still a need for these executives to exert more effort in enhancing their managerial competencies.

Table 2 illustrates that the perceptions of women managers/entrepreneurs differ from the perceptions of their subordinates on: (a) strategic thinking and scenario-building, (b) analysis, problem solving, and decision making, (c) planning and organizing, and (d) change management. This provides a picture that the managerial respondents rated themselves higher than their subordinates. It shows that while these executives perceive themselves as competent in these management areas, their subordinates want them to perform better.

TABLE II. SUMMARY OF TEST RESULTS OF THE DIFFERENCES IN THE MANAGERIAL COMPETENCIES OF WOMEN MANAGERS/ ENTREPRENEURS IN CATANDUANES, AS PERCEIVED BY THEM AND THEIR SUBORDINATES Test Statistic

Computed Value

Tabular Value

Decision

1. Strategic thinking and scenario-building

t-test

3.175

2.015

Reject

2. Analysis, problem solving, and decision making

t-test

4.554

1.943

Reject

3. Planning and organizing

t-test

5.554

1.895

Reject

4. Change management

t-test

2.124

1.943

Reject

t-test

1.000

1.895

Accept

6. Team leadership

t-test

1.000

1.895

Accept

7. Information management

t-test

1.554

1.943

Accept

8. Innovation and creation

t-test

1.554

1.943

Accept

t-test

1.000

1.943

Accept

t-test

1.192

1.943

Accept

11. Facilitation and group moderation

t-test

1.000

1.895

Accept

12. Presentation and public speaking

t-test

1.000

1.895

Accept

13. Interviewing

t-test

1.000

1.895

Accept

Functional Management Areas

organizational groups

tere_1_for print.indd 20

Interpretation

difference difference difference difference difference difference difference difference difference difference difference difference difference

3/13/14 4:41 PM

21

Table 3 shows that the t-test performed on these data did not reveal managers/entrepreneurs. This result suggests that as executives, they are expected to be exceptionally knowledgeable and skillful in their work, given their responsibilities in their respective organizations. Being such, they give direction to their organizations. Therefore, they should consider the different functional management areas as extremely important in discharging their duties and functions. review by asking themselves the following: (1) Where are we now?; and (2) Where are we going? These guide executives in managing their organizations to achieve

of women managers/ entrepreneurs in Catanduanes as perceived by them and their subordinates are highly important in discharging managerial duties and functions. The management functional areas of strategic thinking and scenarioand change management were perceived differently by the executives and their subordinates. Women managers and entrepreneurs in Catanduanes have similar managerial competencies.

TABLE III. SUMMARY OF TEST RESULTS OF THE DIFFERENCE IN PERCEPTIONS OF MANAGERIAL COMPETENCIES BETWEEN WOMEN MANAGERS/ ENTREPRENEURS AND SUBORDINATES IN CATANDUANES Functional Management Areas

Test Statistic

Computed Value

Tabular Value

Decision

1. Strategic thinking and scenario- building

t-test

0.953

2.015

Accept

2. Analysis, problem solving and decision making

t-test

0.934

1.943

Accept

3. Planning and organizing

t-test

0.933

1.895

Accept

t-test

0.408

1.943

Accept

t-test

1.524

1.895

Accept

6. Team leadership

t-test

1.000

1.895

Accept

7. Information management

t-test

0.862

1.943

Accept

8. Innovation and creation

t-test

1.000

1.943

Accept

t-test

1.000

1.943

Accept

organizational groups

negotiation

tere_1_for print.indd 21

Interpretation

difference difference difference difference difference difference difference difference difference

3/13/14 4:41 PM

22

|Philippine Journal on Innovation & Entrepreneurship |

t-test

1.000

1.943

Accept

11. Facilitation and group moderation

t-test

1.000

1.895

Accept

12. Presentation and public speaking

t-test

1.000

1.895

Accept

13. Interviewing

t-test

0.661

1.895

Accept

difference difference difference difference

The following recommendations are offered. First, women managers and entrepreneurs in Catanduanes must strive to extremely consider these management and expertise in order to possess the skills and attributes necessary in performing the tasks and activities for the welfare of the members of the organization, and the

competent. Second, these executives must attend trainings and seminars related

MANAGERIAL IMPLICATIONS

organizations. Managerial competencies of executives are vital ingredients in any human organizations. Management at whatever level of the organization needs considerable review and monitoring so as to ascertain that organizational system functions in harmony with the different sub-systems.

Thus, managers need training and re-orientation as the need arises. This is a response to the management and organizational concept that organizational is simply a regulation to facilitate goal attainment.

In higher education pursuits where the academicians are managers and leaders of social organizations, it is crucial for curricula to contain value-setting and attitude-forming mechanisms so as to provide future leaders direction for good governance. Hence, social responsibility and good governance, as well as ethics and accountability in public or private administration, should be emphasized in colleges and universities.

tere_1_for print.indd 22

3/13/14 4:41 PM

23

REFERENCES 1.

Bigelow, J. D., ed. (1991). Managerial Skills: Exploration in Practical Knowledge, Newbury Park, CA: Sage.

2. Bittel, L. R. and Newstrom, J. W. (1990). What Every Supervisor Should Know, 6th edition, Sydney: McGraw-Hill.

3. Boyatzis, R. (1982). The Competent Manager, New York: Wiley.

4.

5.

Human Resources Management Review, 3(1), 1-14.

School of Commerce Research Paper Series: 00-7 @ http://www. .

6. Custodio, L. P. (2000b). “Work-Related Perceptions of Executives in Research Digest, Volume XII, January.

Strategic Planning and Decision Making in Educational Administration, Revised Edition, Virac: Catanduanes State Colleges.

8. Custodio, L. P. and Tugano, M. S. (2006). “Managerial Roles of Chief Journal, 2(1), 35-49.

Business Research

9. David, F. R. (2000). Strategic Management: Concepts and Cases Singapore: Pearson.

th

edition,

10. Hitt, M. A., Ireland, R. D. and Hoskisson, R. E. (1999). “Strategic Journal of the American Institute of Planners, 45 11.

A Manual of Organizational Development: The Psychology of Change, Boston, MA: Psychological Press.

12. Iñigo, Conrado E. (2000). Management for Filipinos: Principles and Applications, Quezon City: Design Plus.

13.

14.

The Leadership Factor, NY: Free Press.

A Force for Change: How Leadership Differs from Management, New York: Free Press.

15. Martirez, C. R. (1991). Human Resources and Management: Principles and Practices, Metro Manila: National Book Store.

16.

The Nature of Managerial Work, NY: Harper and Row. Business Review, July-August, 49-61.

tere_1_for print.indd 23

Harvard

3/13/14 4:41 PM

24

|Philippine Journal on Innovation & Entrepreneurship |

18. Miralao, V. (1980). Women and Men in Development: Findings from a Pilot Study, Quezon City: Ateneo de Manila University Institute for Philippine Culture.

19. Murphy, J. J. (2008). “Virtual Management: Changing the Management http://www.negotiationeurope.com.

20.

HR Magazine, 38

21. Quinn, J. B., Mintzberg, H. and James R. (1988). The Strategy Process: Concepts, Contexts and Cases, Englewood Cliffs, NJ: Prentice Hall International.

22. Roffey, B. H. (2001). “Women Managers and Entrepreneurs in the School of Commerce Research Paper Series: 00-7 @

.

23. Soriano, E. V. and Nhert, L. C. (1990). Business Policy in an Asian Context, Metro Manila: Sinag-Tala.

24.

York: Random House.

Human Communication, 5th edition, New

25. United Nations Industrial Development Organization (UNIDO). (2002).

Strengthening Organizational Core Values and Managerial Capabilities, Vienna, Austria: Human Resource Management Branch @ http://www.unido.org.

26.

Management Development, 9(6), 32-40.

Journal of

ACKNOWLEDGMENT The author wishes to extend her heartfelt thanks to the women managers and entrepreneurs who willingly participated in this undertaking. A special mention of gratitude is also extended to the respondent’s colleagues for their encouragement. The logistics support given by the Catanduanes State Colleges’ administration through the Research and Development Center is likewise appreciated.

tere_1_for print.indd 24

3/13/14 4:41 PM

25

Business Ideas That Aspiring Entrepreneurs Are Conceiving1 Ian Jester M. de Vera2

ABSTRACT This paper presents the data collected from the business plans submitted University of the Philippines Institute for Small-Scale Industries from 2006 to assessing the type of products or services that the participants would develop into businesses. After analyzing the data gathered from the business plans submitted to UP ISSI for the period covered, this paper formulates recommendations for the government and UP ISSI. 1.

Background

The Institute for Small-Scale Industries (UP ISSI), an organic unit of the University of the Philippines created under Republic Act No. 6041, designed the course content and materials for the New Enterprise Planning and Personal Entrepreneurial Development courses in coordination with the UP Open University (OU) in 1996. The following year, the Institute ran the two programs in Hong Since then, the UP OU has been offering the two courses every semester.

On September 5, 1998, UP ISSI started implementing its own version, Start Your Own Business (SYOB), a title that was more familiar and easier to recall than OU’s versions. SYOB is a six-day course that was designed to train aspiring entrepreneurs to set up their own businesses and others “who may want to Small-Scale Industries, n.d.). The Institute had been regularly conducting similar programs in the past, such as the Young Entrepreneurs Program, an Appreciation Course on Entrepreneurship, the Entrepreneurial Career Development Program, and various similar special courses that were contracted by local and international to have been designed to expose the participants to training in idea generation of the enterprise to the preparation of the business plan.

Besides completing a certain number of hours of classroom attendance business plan, which is expected to integrate all the insights obtained from the course.

In recent years, there has been a move within ISSI to segregate SYOB participants who enrolled in the course with business ideas already in mind, from those who are still contemplating what type of business they are going to put up.

There is also a plan to offer the course in blended distance learning mode, where

1 Cite as de Vera, Ian Jester M., (2013). “Business Ideas that Aspiring Entrepreneurs are Conceiving”, 1 Philippine Journal on Innovation & Entrepreneurship 1, (25-36) .

2 University Extension Specialist II, Diliman (2009).

tere_1_for print.indd 25

3/13/14 4:41 PM

26

|Philippine Journal on Innovation & Entrepreneurship |

learners and their mentors meet each other face to face only in scheduled meetings and the rest of the interactions happen online or through the Internet.

But from the start of SYOB up to the present, only its residential (classroom) mode has so far been regularly conducted by UP ISSI. It is not known when the term business plan Tim Berry (2011), founder and chair of the business planning software Palo Alto,

The term, however, started to be used in the context of venture capital and In the Philippines, the use of the term business plan can be traced back to the phrase project feasibility study the viability of a project, they have similarities to project feasibility studies in that more by enterprise owners or entrepreneurs. Project studies and business plans, government assistance.

and not project-oriented.

In 1963, the Program Implementation Agency, together with the Loans and Investments Council pioneered the dissemination of knowledge on project studies through the holding of seminars on the subject. This was the start of the use of project feasibility studies as management tools in determining the success or failure of a given business undertaking in the Philippines. The practice eventually evolved into business planning and into the preparation of a formal document for planning business activities by enterprise owners or entrepreneurs.

This paper will look into all the business plans submitted to UP ISSI as assess the kind of projects aspiring entrepreneurs are developing for their own businesses. It will also formulate recommendations for the government and UP ISSI. 2.

Objectives

This paper will assess the projects submitted by UP ISSI’s Start Your Own Business course participants from 2006 to 2011. In particular, it will classify the products and services of the proposed businesses using the Philippine Standard

tere_1_for print.indd 26

3/13/14 4:41 PM

27

3.

policy makers have recognized the potential of national economic prosperity and development through the impact of entrepreneurial activity and growth of small enterprises. Huge development funds have been spent on a range of initiatives that stir entrepreneurial activity and build the capability of small enterprises. further studies on enterprise development.

4.

Review of Related Literature

Current literature lacks large-scale, empirical research on business plans developed by enterprise owners, and less so by startup or starting entrepreneurs.

chance of survival and success for small businesses. planning enhanced the founders’ product development and venture-organizing activities (Delmar Scott, 2003). The study further states that business planning may be a more effective tool during the startup of a new business than during the maintenance of an established business (Delmar Scott, 2003). business plans over those without, there is still a lack of empirical research on the kinds of projects that aspiring entrepreneurs would like to venture in.

A possible reason for this lack of information is the small number of

business plans. Iandiorio (1994) opines that when a person thinks of protecting a copyrights (Iandiorio, 1994). Whether or not an idea or product is protectable by patent, copyright, or trade-secret laws, there still is a need, in the early stages Fry and Stoner classify business plans into two types: investment and (Fry Stoner, 1985).

The Philippines, having a free economy, does not impose on its citizens the kind of businesses that they must undertake. However, its Department of Trade

tere_1_for print.indd 27

3/13/14 4:41 PM

28

|Philippine Journal on Innovation & Entrepreneurship |

and Industry (DTI), the main government arm in promoting entrepreneurship and supporting the development and growth of local MSMEs, lists down its “priority information technology (IT) and IT-enabled services, automotive, electronics, mining, health care and wellness, tourism, energy, food and marine products, home furnishings, gift ware, holiday decors and wearables (Department of Trade and Industry, 2008) products or services that it is supporting in each city or municipality under the One Town, One Product program (Department of Trade and Industry, 2008).

Meanwhile, in the 2001 Accenture international entrepreneurship study cited in the conference paper of Muñoz, et al. (2005, p. 9), Jimenez (2002) highlights key recommendations for entrepreneurial organizations across borders: (1) (2) Be big, yet small – act within a global paradigm yet remain nimble, (3) Cultivate entrepreneurial attitude and behavior –through the communication and positive reinforcement that entrepreneurship is (4) Encourage diversity of structure and thinking – by being open and (5) Make the best use of knowledge – by digging deep into organizational structures, technological frameworks, and stakeholder alliances to fully capitalize on intellectual assets.

These recommendations are also applicable to aspiring entrepreneurs and they should be included in the business plans submitted to UP ISSI. 5.

Analytical Framework

Philippines: one is based on employment size while the other is based on asset size.1 The former is the most widely used in the country since the number of workers in

1 Carta for Small Enterprises) enterprises are classified as follows: Micro: 1 to 9 workers Small: 10 to 99 workers Medium: 100 to 199 workers Large: 200 and above workers In terms of asset size, enterprises are categorized as follows: Micro: Up to 3 million pesos Small: 3,000,001 to 15 million pesos Medium: 15,000,001 to 100 million pesos Large: Above 100 million pesos 2 DTI adopts the following classification of industries in its survey of firms in the country: Agriculture, Hunting and Forestry Fishing Mining and Quarrying Manufacturing Electricity, Gas and Water Construction Wholesale, Retail Trade; Repair Services Hotels and Restaurants Transport, Storage and Communications Financial Intermediation Real Estate, Renting and Business Activities Education Health and Social Work Other Community, Social and Personal Services

tere_1_for print.indd 28

3/13/14 4:41 PM

29

This paper will categorize the businesses in the plans submitted for the UP

applied. It is the same standard that UP ISSI adopts in its registration form for its training participants. However, to make it comparable with DTI’s statistics, the PSIC standards that will be used in this study will be reduced.2 6.

Methodology and Limitations

It would be an enormous task to collect all the business plans that were prepared by participants of UP ISSI since it started offering SYOB and similar also proprietary materials of the various institutions that contracted the Institute to conduct the training programs.

On the other hand, the digitization of the participants’ outputs at the UP ISSI Resource Materials and Documentation Center began in 2011. The business plans that were submitted to the center between 2006 and 2011 were part of the of digitized business plans as a modest sample for this study, The business plans were prepared by the participants of 18 runs of SYOB (80th to 98th editions), which were held between 2006 and 2011.

The business projects were categorized according to the type of industry, location of business, the type of product or service that will be offered, the legal form of the business, the proposed number of employees, capitalization, source of

to the extent that UP ISSI was authorized to use restricted information from the business plans, the presentation and analysis of the data were limited to aggregate have to be eliminated. and aspiring entrepreneurs in general, as well as suggestions for further study were given.

7.

Presentation of Data

A total of 102 business plans were submitted to UP ISSI from 2006 to 2011. The business projects were categorized according to the type of industry, the location of the business, the type of product or service that will be offered, the legal form of the business, proposed number of employees, capitalization, and source of 7.1. TYPE OF INDUSTRY

Majority of the aspiring entrepreneurs wanted to put up businesses sector. Meanwhile, 31.40 percent or 32 aspiring entrepreneurs wanted to put up

tere_1_for print.indd 29

3/13/14 4:41 PM

30

|Philippine Journal on Innovation & Entrepreneurship |

TABLE 1. BUSINESS PROJECTS BASED ON TYPE OF INDUSTRY Type of industry

Frequency

Percentage

Agriculture

3

2.9

32

31.4

Trading

20

19.6

Service

47

46.1

TOTAL

102

100

7.2 TYPE OF PRODUCT OR SERVICE

The prospective businesses were in the manufacture of food products

TABLE 2. TYPE OF PRODUCT OR SERVICE THAT WILL BE OFFERED Type of product or service

Number

Percentage

Agriculture, Hunting and Forestry

5

4.9

Food Products and Beverages

18

17.6

Wholesale, Retail Trade; Repair Services

14

13.7

Other Community, Social and Personal Services

13

12.7

Health and Social Work

5

4.9

Hotels and Restaurants

17

16.7

Rubber and Plastic Products

1

1.0

Transport, Storage and Communications

3

2.9

Wood Products, except Furniture

2

2.0

Wearing Apparels

3

2.9

Real Estate, Renting and Business Activities

4

3.9

Education

4

3.9

1

1.0

Construction

Recycling

5

4.9

1

1.0

2

2.0

1

1.0

1

1.0

Chemicals and Chemical Products

1

1.0

Not Indicated

1

1.0

102

100

TOTAL

tere_1_for print.indd 30

3/13/14 4:41 PM

31

7.3 TYPE OF BUSINESS

A large majority of the business plans were for sole proprietorships (80

TABLE 3. CLASSIFICATION OF THE FIRMS BASED ON TYPE OF BUSINESS Type of business

Number

Percentage

Sole proprietorship

80

78.43

Partnership

14

13.73

Corporation

6

5.88

Cooperative

1

0.98

Not Indicated

1

0.98

TOTAL

102

100

7.4.EMPLOYMENT SIZE

Data in Table 4 show that the majority of the participants would put up micro businesses or those with less than 10 workers (85 businesses or 83.33 percent), while the rest would put up small businesses (10 to 99 workers). There were also others who did not indicate the number of people they were going to employ.

TABLE 4. EMPLOYMENT SIZE Employment size

Number

Percentage

85

83.33

13

12.75

Not Indicated

4

3.92

TOTAL

102

100

Small (100 to 199 workers)

7.5. ASSET SIZE

Data in Table 5 also show that the majority of the participants would put up micro businesses or those with asset sizes of less than 3 million pesos (84 businesses or 82.35 percent), while the rest would put up either small (3.01 to 15 million pesos) or medium-sized businesses (15.01 to 100 million pesos). There were eight business plans that did not indicate the asset sizes of the enterprises that would be established.

TABLE 5. ASSET SIZE Asset size Small (3,000,001 to 15 million pesos) Not Indicated TOTAL

tere_1_for print.indd 31

Number

Percentage

84

82.35

8

7.84

2

1.96

8

7.84

102

100

3/13/14 4:41 PM

32

|Philippine Journal on Innovation & Entrepreneurship |

7.6. SOURCE OF FINANCING

Majority of the aspiring entrepreneurs would draw from their own pockets sources as seen in Table 6.

TABLE 6. SOURCE OF FINANCING Financing

Number

Family and friends

Percentage

59

57.84

15

14.71

2

1.96

1

0.98

15

14.71

Not Indicated

10

9.80

TOTAL

102

100

7.7. MARKET

Almost all the businesses that were the subjects of the business plans reach only within the National Capital Region while three or 2.9 percent would cater to international or foreign markets.

TABLE 7. MARKETS CATERED TO Market

Number

Percentage

National Capital Region

59

57.8

Cagayan Valley

1

1.0

Central Luzon

11

10.8

CALABARZON

17

16.7

1

1.0

Bicol Region

1

1.0

Central Visayas

1

1.0

Davao Region

2

2.0

SOCCKSARGEN

1

1.0

International/Foreign

3

2.9

Not Indicated

4

3.9

TOTAL

102

100

7.8. GENDER OF THE PROPONENT

Majority of the authors of the business plans were female (58.8 percent) as seen in Table 8.

TABLE 8. GENDER OF THE PROPONENT Gender Female

tere_1_for print.indd 32

Number

Percentage

39

38.2

60

58.8

Not Indicated

3

2.9

TOTAL

102

100

3/13/14 4:41 PM

33

8.

Summary and Analysis of Data

Based on the data gathered from the business plans collected by UP ISSI from 2006 to 2011 it appears that aspiring entrepreneurs are interested in putting more inclined to set up sole proprietorships than other types of businesses. They also would want their businesses to be micro or with less than ten workers and these budding entrepreneurs would use their own money to establish their own enterprises.

local market while their larger counterparts (medium to large) with asset sizes of more than 15 million pesos export their products abroad.

9.

Conclusions and Recommendations While the government prioritizes projects that involve “food and

(Department of Trade and Industry, 2008). SYOB participants, however, would of these products being prioritized or supported by the government. If these aspiring entrepreneurs would be interested to be in the food sector, they would be interested in establishing restaurants, bakeries, coffee shops and the like. In fact, data show that they are also keen in putting up hotels and restaurants, which is second in the list of types of products or services that SYOB participants would plans submitted by the SYOB participants of UP ISSI from 2006 to 2011. Based on the data collected from these plans, the following recommendations should be adopted by the institutions concerned: 9.1 FOR THE GOVERNMENT

The government should intensify its promotion of its priority products and investments. Its Department of Trade and Industry must coordinate with the Department of Education so that this promotion will be done on the grassroots level. Subjects or courses that will hone the skills of the participants to prepare improved.

Lastly, the government should also intensify the promotion of its

tere_1_for print.indd 33

3/13/14 4:41 PM

34

|Philippine Journal on Innovation & Entrepreneurship |

business plans show that the majority of the aspiring entrepreneurs would use lending institutions.

9.2 FOR UP ISSI

advisory service to the participants, who are all aspiring to become entrepreneurs.

In this regard, the Institute may align the course with DTI’s programs by forging close coordination with the agency in the future editions of SYOB. The course may also be offered not only in its present residential mode, but also in a distance learning or electronic learning mode.

There is also an opportunity for UP ISSI to offer SYOB as a complete, stand-alone course on business planning and to offer it in separate modules.

For example, the Institute can offer a course that will train participants on how to prepare a marketing plan, which is separate from the longer, more exhaustive SYOB. Second, the coaches who guide the participants must be trained as fullIn this respect, they can advise the starting entrepreneurs to prepare plans for business ideas that are in line with the government’s priority programs. must be offered not only in the National Capital Region but also in other key cities and strategic locations in the country. In this manner, the program will train a number of aspiring entrepreneurs spread across the provinces.

SYOB may also be a permanent program of UP ISSI that may be under its business development service stream. The Institute may train prospective mentors from the course they can form a consultancy team of experts (in marketing, aspiring entrepreneurs in the country.

tere_1_for print.indd 34

3/13/14 4:41 PM

35

10.

Suggestions for Further Study

In the future, an impact study may be made to determine whether the SYOB participants pursued the ideas detailed in their business plans. The best approach would be to interview each proponent (e-mail address and phone numbers should be in each plan) so as to follow up if the business plan was actually implemented. expert ranking, and structured interviews may be used in further studies. The text analysis can be done via a software (http://www-142.ibm.com/software/ products/us/en/spss-text-analytics-surveys/). A group of experts can rank the point system. Then a bankers panel can be assembled to decide on which of the business plans applying for a loan will be granted ex post facto. that determines whether plagiarism was committed. SYOB participants may have lifted or copied elements from business plans readily available from the Internet.

A plagiarism score of 40 percent using that software will assume that the material is not entirely original.

Since most of the data in the business plans are obsolete, they can be placed in a website as possible templates without mentioning the names of the authors.

As regards the business ideas proposed by the aspiring entrepreneurs, it would be interesting to measure the creativity aspects of the SYOB course by the feasibility. A pattern analysis will also provide the future researcher with fresh Finally, further research may be conducted, assessing the entrepreneurial preparedness or motivation of the participants enrolling in the SYOB or other entrepreneurship courses being offered by ISSI.

tere_1_for print.indd 35

3/13/14 4:41 PM

36

|Philippine Journal on Innovation & Entrepreneurship |

REFERENCES 1.

Planning Startups Stories: Tim Berry on Business.

2.

Planning, Starting and Growing Your Business, and Having a Life in the Meantime. [Online Available at: http://timberry.bplans.com/2011/01/a-short-history-of-business-plans.html [Accessed January 2013].

3.

Delmar, F. and Scott, S. (2003). “Does business planning facilitate the development of new Strategic Management Journal, 24(12), pp. 1165-1185.

4.

Department of Trade and Industry. (2009). Distribution of Establishments by Industry and Firm Size. [Online] available at: http://www.dti.gov.ph/uploads/ DownloadableFiles/2009_MSME_Stats_Industry.pdf [Accessed 13 March 2013].

5.

Department of Trade and Industry. (2009). Number of Employees by Industry and Firm Size. [Online] available at: http://www.dti.gov.ph/uploads/ DownloadableFiles/2009_MSMEs_stats_labor_industry.pdf [Accessed 13 March 2013].

6.

Department of Trade and Industry. (2008). OTOP Philippines. [Online] Available at: http:// otopphilippines.org/aboutus.html [Accessed 28 November 2012].

Department of Trade and Industry. (2008). DTI Website. [Online] Available at: http://www. dti.gov.ph/dti/index.php?p=313 [Accessed 28 November 2012].

8.

Journal of Small Business Management (pre-1986), 23(000001), pp. 1-6.

9.

Journal of Management Consulting, 8(1), pp. 59-62.

10. Jimenez, H. A. (2002).

[Online] Available at: html [Accessed June 2004].

11.

Muñoz, J., Liao, J. & Welsch, H. (2005). Success Factors Among Philippine Entrepreneurs.

Indian Wells, California, s.n.

12.

Preparing Project Feasibility Studies for Philippine Business Enterprises.

Manila: Abiva.

13. Perry, S. C. (2001). “The Relationship Between Written Business Plans and the Failure of Small Journal of Small Business Management, 39(3), pp. 201-208.

14.

15.

Small Business Management.

University of the Philippines Institute for Small-Scale Industries. (n.d.) Annual Report.

16. University of the Philippines Institute for Small-Scale Industries, n.d. UP ISSI Website. [Online] Available at: http://issi.upd.edu.ph/2012_training_calendar.pdf [Accessed 16 September 2012].

tere_1_for print.indd 36

3/13/14 4:41 PM

37

Proceedings of the Conference-Workshop on Entrepreneurship Education 1 (11 January 2011) Juli F. Cardillo, ed.2 RESOURCE PERSONS Guest Speaker Hon. Alfredo E. Pascual, President-elect, University of the Philippines Presenters Dr. Oscar A. Torralba, Chairperson, CHED Technical Panel on Entrepreneurship Dr. Elvira A. Zamora, Professor, College of Business Administration,University of the Philippines Diliman Dr. Emilina R. Sarreal, Professor & Coordinator, BS Entrepreneurship Program, De La Salle University Manila Prof. Nestor O. Rañeses, Director, UP Institute for Small-Scale Industries Dr. Luis G. Sison, Vice-Chancellor, Research and Development, UP Diliman Ms. Rachelle T. Abordo, Entrepreneur, Sweetven, Ateneo de Naga University Prof. Melchor C. Morandarte, Chair, BS Entrepreneurship, Malayan Colleges Laguna Dr. Salvador I. Sibayan, University Extension Specialist V, UP Institute for Small-Scale Industries Prof. Maria Luisa B. Gatchalian, Faculty, Entrepreneurship Department, Miriam College Dr. Alice T. Valerio, Chairperson, Professor, College of Business Administration, De La Salle University – Dasmariñas Facilitators Prof. Melchor C. Morandarte, Chair, BS Entrepreneurship, Malayan Colleges Laguna

1 Cite as on Innovation & Entrepreneurship 1 2 Marketing Associate Manager,

tere_1_for print.indd 37

1 Philippine Journal

3/13/14 4:41 PM

38

|Philippine Journal on Innovation & Entrepreneurship |

Dr. Paz H. Diaz, Vice President for Academics, Roosevelt College Prof. Julita W. Bokingo, Professor, College of Business Administration, Mindanao State University-Iligan Institute of Technology Dr. Alice T. Valerio, Chairperson, Professor, College of Business Administration, De La Salle University – Dasmariñas SUMMARY OF DISCUSSIONS •ISSUES •

•INSTRUCTIONAL

•LEARNING

•RESEARCH GAPS

•Low enrollment because some still think there is no assurance of employment after graduation and that a BS Entrepreneurship course is not necessary to be an entrepreneur

•Example foreign

•Appropriate learning methodology (handson experience and demonstration)

•High managerial approach, followed by economic and sociocultural approach

•Diverse faculty orientation on how to attack entrepreneurship subjects

•Lack of standard exercises / games that practice calculated risks

our culture •Some foreign materials not available in the Philippines

•Lack of evaluation tools •Actual implementation of the program is

•Discovering why entrepreneurship educators should not be entrepreneurs

•Few papers on formation of new economic approach, and policy •Limited source of national data

•Translating theory to action •Dealing with limited resources/ facilities •Seeking support from the private sector •Continuing professional trainings available

•OPPORTUNITIES •

•INSTRUCTIONAL

•LEARNING

•RESEARCH GAPS

•Partnership with entrepreneurs, government

•Training and instructional materials from TESDA & ISSI

•Linkages with the private and public sectors

•Entrepreneurship education and training

•Availment of information (Internet)

•Gender & entrepreneurship

students can have their practicum, and other academic institutions

•Various techniques and materials from different colleges / universities / institutions

•Networking with fellow entrepreneurship educators

•Foreign instructional materials

•Using new technologies funded by private companies

•Customized instructional materials developed by faculty themselves

•Availment of private laboratories for entrepreneurship students

•Family business •Creative industries •Small business creation •Social and ethnic community •E-entrepreneurship and E-business •Innovation, Incubation, networks • and growth issues •Supporting small businesses • •Sustainability, being environmental •Applied and action research, • productivity and quality, agribusiness ventures, guarantees, best practices, legislation, promising industries, value chain analysis, OTOP, communication technologies (DAP)

tere_1_for print.indd 38

3/13/14 4:41 PM

39

CHALLENGES CURRICULUM DESIGN

•Different standards in teaching entrepreneurship •Limited facilities (i.e. incubators) •Limited facilitators/ practitioners who are learned in the area •Limited Literature (i.e. textbooks)

INSTRUCTIONAL MATERIALS DEVELOPMENT

LEARNING METHODOLOGIES

• entrepreneurship education at the theoretical and practical level

•Competency: Learning how to deliver so that students will really appreciate entrepreneurship

•Lack of funds •Lack of facilities

•Lack of rubrics for entrepreneurship •Lack of universal entrepreneurship association by faculty

•Lack of interest in Finance of students

•Lack of a “guide” for business plan formats •

RESEARCH GAPS

•Further improvement in research methodology •Further progress in theory-driven research •Emphasis on ethnographic case studies and simulations •Longitudinal researches •Combination of qualitative and quantitative •Demand-driven researches •Case studies not only of “success stories” in entrepreneurship but also of “failed ventures/stories” •High failure rate of entrepreneurship ventures •Impact of internship on entrepreneurship aspirations/ ventures •Performance assessment •Linking individual characteristics and behavior to “entrepreneurship career performance” of serial / portfolio entrepreneurs •Societal impact of micro-level enterprises at the industry, regional, and national levels of analysis •Effects of environmental factors on enterprises •Effects of relevant legislations e.g.

•Effects of political contexts (and transitions) to entrepreneurship (poli-entrepreneurship)

INNOVATIONS CURRICULUM DESIGN

INSTRUCTIONAL MATERIALS DEVELOPMENT

LEARNING METHODOLOGIES

•Prepare an experience-Based Entrepreneurship Curriculum

• to students across

•Venture Pitch/ Elevator / Angel Investors Pitch

•Develop a strong Coaching Program

are skill-based

•Invite experts/ entrepreneurs during the project defense

•Strengthen AcademeIndustry Linkages matching skills with the demands of the industry •Do long-term planning

•Start from the theoretical level before teaching the skill •

•Conduct an OVCRD (UP)initiated technopreneurship bootcamp

RESEARCH GAPS

• sophisticated theoretical models and data analysis • and validity tests •Combination of qualitative and quantitative researches •Partnership with students in publication

•Include sustainability & ecofriendly entrepreneurship in the curriculum •Encourage friendly competitions among schools

tere_1_for print.indd 39

3/13/14 4:41 PM

40

|Philippine Journal on Innovation & Entrepreneurship |

OVERALL RECOMMENDATIONS

CURRICULUM DESIGN • for Entrepreneurship Education and Training -Benchmark and formulate our own standard of teaching -Revisit and revise current Education and Training -Align Curriculum with the Development Plan 2010-2016, supporting job creation for Filipinos.

•Invest in faculty empowerment and development •Develop a Graduate Program/ Continuing Education Program for current entrepreneurs •Coordinate with DepEd, in strengthening its Curriculum for Entrepreneurship Education (Elementary and High School) •Include in the curriculum, development of skills and core competencies relevant to the global market •Establish a Student Cooperative in Schools to increase funding/ technical support, and include a subject on Student Cooperative in the Curriculum •Institutionalize academe-industrygovernment collaboration, thus strengthening support to students

INSTRUCTIONAL MATERIALS DEVELOPMENT •Provide more Filipino examples

LEARNING METHODOLOGIES •Network with institutions, faculty and students

•Include exercises / games / instructional materials that would encourage / develop entrepreneurial skills.

•Use faculty members will have to continually develop their entrepreneurship education competencies

•Plan every meeting in a semester

•Ethical and values consideration on venture projects that educators would allow or encourage

•Give BIG examples to encourage them to think BIG •Send all instructional materials to a central place like ISSI •Do not depend on one or two textbooks only; use customized materials •Begin with the end in mind : producing a kind of person that would be an entrepreneur, a student who knows how to start a business

RESEARCH GAPS (see next table)

• •Sharing of best practices •UP ISSI/SERDEF/ENEDA to take the lead role in continuing education and training for entrep educators

•Use realistic instructional materials capturing what the market really is •Share tools / instructional materials •Link basic instructional materials to basic management management, etc.)

•Develop a RICH curriculum with various instructional materials

TESDA, DOST, DTI, PCCI, etc.) for business start-ups, including

tere_1_for print.indd 40

3/13/14 4:41 PM

41

ENTREPRENEURSHIP RESEARCH RECOMMENDATIONS TOPICS •Entrepreneurship education and training •Gender and entrepreneurship

METHODOLOGIES •Use of other methodologies of data collection •Further improvement in research methodology

•Family business •Creative industries •Social community and ethnic

•Combination of qualitative and quantitative methods and researches

•E-entrepreneurship and e-business

•Applied and action research, grounded on

•Small business creation

•Innovation, Incubation, Networks • development and growth issues

•Ethnographic case studies and simulations (trade fairs)

•Supporting small business

•Longitudinal researches

• capital

•Case studies not only of “success stories” in entrepreneurship but also of “failures”

•Sustainability, Being environmental •High failure rate of entrepreneurship ventures

• sophisticated theoretical models and data analysis

•Impact of internship on entrepreneurship aspirations/ ventures

• reliability and validity tests

•Societal impact of micro-level enterprises at the industry, regional, and national levels of analysis

•Performance assessment

•Linking individual characteristics and behavior to “entrepreneurship career performance” of serial / portfolio entrepreneurs

RESEARCH APPROACH •High in managerial approach, followed by economic; dying psychological approach but growing sociocultural approach • psychological approach, research based on economic approach, policy •A need for further progress in theory-driven research

OPPORTUNITIES •Source of national data •Access to markets, and quality, agribusiness ventures, guarantees, best practices, legislation, promising industries, value chain analysis, OTOP, communication technologies (DAP)

•Demand-driven researches (to be really used by stakeholders)

•Clarify theoretical assumptions and develop new •Explain theoretical phenomenon than just describing

•Effects of environmental factors on enterprises •Effects of relevant legislations •Effects of political contexts (and transitions) on entrepreneurship (polientrepreneurship)

MAIN TOPIC : THE STANDARDS OF CHED ON ENTREPRENEURSHIP EDUCATION AND TRAINING IN THE PHILIPPINES SPEAKER

: Dr. Oscar A. Torralba, Chairperson, CHED Technical Panel on Entrepreneurship

MAJOR POINTS CHED Policy on BS Entrepreneurship is a result of CHED’s mission to promote a culture of Entrepreneurship in the country. CHED’s basic standards on BS Entrepreneurship are the following:

tere_1_for print.indd 41

3/13/14 4:41 PM

42

|Philippine Journal on Innovation & Entrepreneurship |

1.

Graduates, after completing the program (4-5 years), must have the orientation and motivation to be entrepreneurs.

2. Graduates must be able to identify opportunities to create value. They must their self knowledge with reality.

3. Graduates must be able to prepare business plans.

4.

5. Graduates must be able to manage and operate businesses effectively and 6. Curriculum must be market-responsive. It should be more aligned with the dynamics of the market.

Three nuggets of wisdom by John Gokongwei: “I chose to live my life unafraid even during times when I was afraid. I “Success can be achieved through hard work, frugality, ingenuity,

MAIN TOPIC : MODELS OF ENTREPRENEURSHIP EDUCATION & TRAINING SPEAKER

: Dr. Elvira A. Zamora, Professor, College of Business Administration, University of the Philippines Diliman

Session Topic : A Management of Technology Framework for MSME Success & Sustainability MAJOR POINTS

exploitation, and protection of appropriate technologies (technology strategy formulation) for the production and delivery of goods and services (technology strategy implementation) necessary for the organization to gain competitive advantage and attain desired levels of growth and performance.

Recommendations to Entrepreneurs 1. enterprise and have a clear understanding of the role of technology in realizing this vision.

tere_1_for print.indd 42

3/13/14 4:41 PM

43

2. to identify the technology and sub-technologies that will become the basis 3. Focus on the optimal utilization of your core technology, with the objective of differentiating the enterprise from all others in the industry.

4. Even as you focus on your core technology, be on the lookout for potentially relevant or emerging technologies in other industries.

5. Formulate a technology strategy, encompassing all important technologies 6. Explore partnerships and alliances, particularly those that would introduce new technological skills to the company or complement and strengthen Recommendations to the Government 1.

The proper role of government is to formulate policies that would stimulate dynamism and upgrading among SMEs.

2. productivity can be achieved.

3. The government should aim to create an environment in which SMEs can improve competitive advantages in established industries by introducing more sophisticated technology and methods and penetrating more advanced segments.

4. Government policy should have a direct hand in improving the pool economic information, infrastructure, and other factors of production.

CONCLUSION 1.

The Philippines still has a long way to go before it catches up in terms of technological development.

2. and outlook.

3. The process of shifting to this strategic mindset starts with the admission that there is a need to improve and that effective management of technology is the answer.

4. Unfortunately, not all sectors of the economy would appreciate this reality with the same level of enthusiasm.

5. High-performing enterprises and institutions would most likely rise up to the challenge and move along in accordance with the MOT framework with ease.

6. Sadly, majority of our enterprises and institutions that are rigid and closed to the idea of changing and adapting new paradigms would be unable to follow.

Thus, much work needs to be done and the pressure remains with the government to create the right environment for effective MOT among all organizations, SMEs in particular.

tere_1_for print.indd 43

3/13/14 4:41 PM

44

|Philippine Journal on Innovation & Entrepreneurship |

8. The challenge to academe is to initiate curricular reforms that would address the MOT needs of the Philippines.

9. Meanwhile, businesses should be more open to collaboration where

MAIN TOPIC : MODELS OF ENTREPRENEURSHIP EDUCATION & TRAINING SPEAKER

: Dr. Emilina R. Sarreal, Professor & Coordinator, BS Entrepreneurship Program, De La Salle University Manila

Session Topic : De La Salle University Entrepreneurship Program MAJOR POINTS The DLSU Entrepreneurship program started in 1983 as a curriculum for the degree, Bachelor of Science in Commerce -Business Management with specialization in Entrepreneurship. Major courses included Environmental Scanning (ENVSCAN), Entrepreneurship Research 1 & 2 (ENTREP 1 & 2), Practicum 1-3, and Entrepreneurship Seminars (ENTESEM).

The rationale behind the program is that it is a response to the Philippine’s Monitor (GEM) Study: “Educational attainment and household income affect the motives for entrepreneurship–the poor and uneducated are more likely responding to necessity rather than opportunity.”

Entrepreneurship Entrepreneurship is a dynamic process of vision, change, and creation. implementation of new ideas and creative solutions. It is basically opportunityseeking, screening, and seizing.

Entrepreneurship Process Stage 1: Stage 2: Stage 3: Stage 4:

Idea Generation (Opportunity Seeking) Business Plan Preparation (Opportunity Screening) Start-up Operation (Opportunity Seizing) Growth & Harvest

Simulation of Business 1.

2.

3.

4.

5.

6.

tere_1_for print.indd 44

Mind-setting Creativity (Concept Statement) Business Plan Strategic Management Process (Business Implementation Plan) Defense Start Up (Incubators)

3/13/14 4:41 PM

45

The Ideal Lasallian Entrepreneurship 1.

I understand and appreciate my competencies and interests and seek to

2. I strive to understand the local and global environment to which I belong, and recognize opportunities for viable business ventures and enterprises.

3. I am creative, innovative, resourceful, and willing to take risks.

4. I value excellence and meritocracy, and therefore constantly develop my technical competence and skills.

5. transform ventures into high-impact organizations responsive to the challenges of the business environment.

6. I am honest and ethical in my dealings with others, and take the extra step to contribute to the well-being of my community and my country.

Plans 1.

The Incubator facility will be expanded for the use of not only the entrepreneurship students but also for the entire Lasallian community.

2. It will include the whole IP cycle of IP Creation, IP Protection and Product Commercialization.

3. Results of the study conducted regarding the appropriate model of the University Business Incubator are still being analyzed.

4. In general, the university plans to have a university incubator that could harness the technologies created by the university (faculty, students, alumni and staff) through a process of inventory taking of researches done, IP protection screening, and business planning and commercialization.

MAIN TOPIC : MODELS OF ENTREPRENEURSHIP EDUCATION AND TRAINING SPEAKER

: Prof. Nestor O. Ra単eses, Director, UP Institute for SmallScale Industries (UP ISSI) Session Topic : Global Models of Entrepreneurship Education and Training MAJOR POINTS GEM Theoretical Model 1.

Entrepreneurship experts in the participating countries consistently evaluated entrepreneurship education and training at primary and secondary level as the weakest of the entrepreneurship framework conditions in their countries.

2. Of the majority of those who have received training, around 80% have done so during their formal education. However many of those receiving formal training also sought training through informal sources.

3. People who have received training are most likely to be 30-35 years of age, are more likely to be men than women, and have at least completed secondary school. Trained individuals in innovation-driven economies are more likely to be older and to have attained a higher education level.

4. Training is more likely to heighten awareness of entrepreneurship, 5.

tere_1_for print.indd 45

Training in starting a business is most effective and relevant in innovationdriven countries.

3/13/14 4:41 PM

46

|Philippine Journal on Innovation & Entrepreneurship |

Source: US Department of Labor

tere_1_for print.indd 46

3/13/14 4:41 PM

47

Competency is a cluster of related knowledge, skills, and abilities that affect a major part of one’s job (a role or responsibility), that correlate with performance on the job, that can be measured against well-accepted standards, and that can be improved via training and development.

Tier 1 – Personal Effectiveness Competencies are competencies essential for all generally learned in the home or community, and reinforced and honed at school and in the workplace. They are personal attributes that may be a challenge to teach or assess.

• • •

• • •

Interpersonal Skills Initiative Ambition

Adaptability and Flexibility Willingness to Take Risks Willingness to Learn

Tier 2 – Academic Competencies are critical competencies primarily learned in a school setting. They include cognitive functions and thinking styles, and are likely to apply to all industries and occupations.

• • • • • •

Reading Writing Mathematics Science and Technology Communication: Listening & Speaking Critical and Analytical Thinking

Tier 3 – Workplace Competencies • • • • • • •

Creative Thinking Networking Planning and Organizing Problem Solving and Decision Making Checking, Examining and Recording Business Fundamentals Computer Application

Tier 4 – Entrepreneurship Technical Competencies consist of the knowledge and skills that are common to all entrepreneurial activities. These technical • • • • • • •

tere_1_for print.indd 47

Principles of Entrepreneurship Innovation and Invention Planning Marketing Financial Management Business Operations Risk Management

3/13/14 4:41 PM

48

|Philippine Journal on Innovation & Entrepreneurship |

Tier 5 – Entrepreneurship Focus Areas include types of enterprise. Related competencies may be developed by interest groups or communities of practice.

• • • • •

Youth Entrepreneurship Micro Enterprise Small Business Development Social Entrepreneurship High Growth, High Value Entrepreneurship

Entrepreneurship Models in Europe • • • • • • • •

Northern Ireland – Introduction of entrepreneurship to Engineering, Science, and Technology students self-employment opportunities as an alternative to traditional work placements Denmark – It holds innovation camps where students, teachers, and business people gather to come up with ideas, solve problems and apply for practical use Finland – A Business Succession School links students with business owners who are looking for a successor.

France – Mobility of teachers and researchers between higher education and business is encouraged at the state level.

Germany – Some universities give their professors the opportunity to get practical business experience.

Spain – A new Act was published to reform the Statute of university professors and enable them to participate in business projects.

Lithuania – Financial assistance is provided for starting a business for students of science and technologies.

National Content Standards for Entrepreneurship Education •

• •

•

tere_1_for print.indd 48

Recognized as the national leader in advocating entrepreneurship membership organization for leaders advocating entrepreneurship education.

Entrepreneurship Education is important economically, personally, and globally.

Objective of Entrepreneurship Education: To become entrepreneurially minded, with the potential to act on this by discovering or creating business opportunities. It is a lifelong process from elementary school to adulthood. their lives.

3/13/14 4:41 PM

49

MAIN TOPIC : MODELS OF ENTREPRENEURSHIP EDUCATION & TRAINING SPEAKER

: Dr. Luis G. Sison, Vice-Chancellor, for Research and Development, UP Diliman Session Topic : UP Technopreneurship Program MAJOR POINTS DOST-UP Technology Business Incubator infrastructure to minimize their cost, thus allowing them to allocate their limited envisioned to be the standard for all future science and technology parks in the Philippines.

The new addition to the line of TBIs is the DOST-PEZA Open TBI, located right beside the Advanced Science Technology Institute (ASTI). It encourages the creation and growth of technology entrepreneurs whose start-up projects involve ICT and electronics.

To further support technopreneurship start-ups, UP launched the Enterprise Center for Technopreneurship in February 2010. Aside from providing a venue for Incubation and base camp pre-incubation, the Center also offers services such as mentoring sessions, coaching sessions, and networking events According to Dr. Sison, some of the privileges of being a TBI locator are: of competent individuals and industry experts within the university, and exposure to potential clients & investors.

To attain success in their operations, the Center must be able to: • • • • • •

tere_1_for print.indd 49

further promote technology in the country gain support from the Government establish strong collaboration with the private sector put emphasis on business development services regularly improve its facilities, and conduct aggressive marketing campaigns.

3/13/14 4:41 PM

50

|Philippine Journal on Innovation & Entrepreneurship |

Target Markets • • •

Innovators – researchers, faculty, students, alumni with exciting technology products / services Industry – companies wanting to enter new markets or outsource their R&D Investors – those diversifying into techno sector or looking for a technical team to address new technologies and markets

MAIN TOPIC : MODELS OF ENTREPRENEURSHIP EDUCATION & TRAINING SPEAKER

: Ms. Rachelle T. Abordo, Entrepreneur, Sweetven, Ateneo de Naga University

Session Topic : Testimonial: Rachelle Abordo’s Sweetven MAJOR POINTS The concept of making chocolates using pili nuts as a main ingredient started as a senior project in the BS Entrepreneurship curriculum of Ateneo de Naga University. Ms. Abordo was made to recruit 3rd year students at their university to form a seven-member enterprise, with herself as the manager. They named their enterprise and product Sweetven, a contraction of sweet seven, and started their operation on July 16, 2005.

Sweetven partnered with the Department of Science and Technology and the Department of Trade and Industry. DTI gave the training and assistance, while DOST provided the loan for the project.

Ms. Abordo shared her hardships and trials as she struggled to start their the other members of their enterprise. She said that Sweetven had encountered many of her functions as manager after she accepted a teaching position at Partido State University. Despite all these, she said that what kept her going was her optimistic view in life.

Eventually, all her six partners in Sweetven decided to resign from the enterprise. In 2010, Abordo renewed the contract with DOST and Ateneo de Naga University by assuming the enterprise as a single proprietor.

Sweetven is now a six-year old business with great potential both in the domestic and foreign markets. It is distributed to more than 20 authorized outlets in Legazpi, Partido, Pili, and Naga in the Bicol Region, and has gained market acceptance in various national and international trade fairs and exhibits.

tere_1_for print.indd 50

3/13/14 4:41 PM

51

PARALLEL SESSIONS MAIN TOPIC :ISSUES, OPPORTUNITIES, CHALLENGES AND INNOVATION IN ENTREPRENEURSHIP EDUCATION AND TRAINING PRESENTER and FACILIATOR : Prof. Melchor C. Morandarte, Chair, BS Entrepreneurship, Malayan Colleges Laguna Session Topic : Curriculum Design SUMMARY The main issues affecting the development of curriculum design are the diverse faculty orientations on how to approach entrepreneurship subjects and the low enrollment of students. A good opportunity that would promote the development of curriculum design is to partner with other academic institutions, entrepreneurs, government agencies, and small and medium enterprises, with which students can have their practicum.

The challenges that entrepreneurship educators face are the different standards in teaching entrepreneurship, limited facilities and literature, and shortage of entrepreneurship practitioners. Suggestions for improving curriculum design include: an experience-based curriculum, a strong coaching program, stronger academe-industry linkages, inclusion of concepts of long-term planning, sustainability and eco-friendly entrepreneurship in the curriculum, and encouragement of friendly competitions among schools.

PRESENTER : Dr. Salvador I. Sibayan, University Extension Specialist V, UP ISSI FACILIATOR : Dr. Paz H. Diaz, Vice President for Academics, Roosevelt College Session Topic :Instructional Materials Development SUMMARY The main issue which impedes the development of instructional materials is the lack of local and foreign resources. Educators agree that there is a need for Additional issues are the lack of standard exercises that practice risktaking and the lack of evaluation tools for the current instructional materials.

Results from the discussion suggest that instructional materials may be developed and institutions, foreign instructional materials, and customized instructional materials developed by the faculty themselves.

Challenges that the educators have recognized are the lack of funds, entrepreneurship education at the theoretical and practical level. The educators proposed that innovations to instructional materials development be made by

tere_1_for print.indd 51

3/13/14 4:41 PM

52

|Philippine Journal on Innovation & Entrepreneurship |

putting more emphasis on Finance.

PARALLEL SESSIONS MAIN TOPIC ISSUES, OPPORTUNITIES, CHALLENGES, AND INNOVATION IN ENTREPRENEURSHIP EDUCATION AND TRAINING PRESENTER: Prof. Maria Luisa B. Gatchalian, Faculty, Entrepreneurship Department, Miriam College FACILIATOR: Prof. Julita W. Bokingo, Professor, College of Business Administration, Mindanao State UniversityIligan Institute of Technology Session Topic : Learning Methodologies SUMMARY Issues in the area of Learning Methodologies are (1) whether or not and (3) how theory can be translated to action. Other issues in common with the other areas of entrepreneurship education are (1) the limited resources and facilities, (2) lack of support from the private sector and (3) lack of continuing professional trainings available. The development of learning methodologies can be made through (1) linkages with private and public sectors, (2) network with fellow entrepreneurship educators, and (3) the use of new technologies funded by private companies and of new information available on the Internet.

The major challenges or the development of learning methodologies are: educators’ competencies, the lack of rubrics for entrepreneurship, and the lack of a universal association for entrepreneurship educators. New learning methodologies that can bolster entrepreneurship education are: holding business pitches, inviting successful entrepreneurs for the project defense, and using the UP OVCRDinitiated technopreneurship boot camp.

PRESENTER & FACILITATOR : Dr. Alice T. Valerio, Chairperson, Allied Professor, College of Business Administration, De La Salle University – Dasmariñas Session Topic : Research Gaps

tere_1_for print.indd 52

3/13/14 4:41 PM

53

SUMMARY Much research has used the managerial approach as well as the economic and the sociocultural approach. More research using the psychological approach can be done on topics such as the linkage of individual traits and behavior to entrepreneurship performance, gender and entrepreneurship, family business,

Research needs that were assessed by the educators are: improvement in

and other demand-driven researches. Innovations in entrepreneurship research which surfaced from the discussion are: the use of multi-source data sets, the use

tere_1_for print.indd 53

3/13/14 4:41 PM

54

|Philippine Journal on Innovation & Entrepreneurship |

FIGURE 1 BELOW SHOWS THE INTERRELATIONSHIP DIGRAPH ON ISSUES AND RECOMMENDATIONS.

IN

OUT

1

0

2

3

0

1

4

0

2

5

0

1

6

0

1

7

0

3

8

0

2

9

0

2

10

0

2

11

0

1

12

0

3

13

0

1

14

0

1

15

0

2

16

0

2

17

1

0

18

0

2

19

1

0

21

1

0

23

0

2

24

0

1

25

0

2

27

3

0

28

1

0

29

0

2

30

0

2

C

1

0

D

2

1

E

1

0

F

0

5

G

3

0

H

1

0

I

1

0

J

2

0

K

1

0

L

1

0

N

2

0

O

2

0

P

7

1

Q

1

0

R

2

0

S

2

0

T

2

0

U

2

0

V

2

0

W

2

0

Driver Outcome

tere_1_for print.indd 54

3/13/14 4:41 PM

55

FIGURE 2 BELOW SHOWS THE INTERRELATIONSHIP DIGRAPH ON RECOMMENDATIONS.

OUT 0

4

3

6

0

9

5

0

1

2

0

0

0

0

0

0

0

0

0

0

1

2

0

2

0

0

0

3

0

1

2

2

0

2

2

1

1

2

2

1

2

2

1

2

4

2

A

B

C

D

E

F

G

H

I

J

K

L

M

N

O

P

Q

R

S

T

U

V

W

IN

tere_1_for print.indd 55

3/13/14 4:41 PM

56

|Philippine Journal on Innovation & Entrepreneurship |

CONCLUSION The main issue that entrepreneurship educators face is the diverse orientations or perspectives on how to teach Entrepreneurship to students. Current coach students to be entrepreneurs. This observation implies that there is a need Entrepreneurship educators have agreed that stronger relations with the government, academic, and private institutions, and entrepreneurs are needed in order to advance and improve entrepreneurship education in the country.

This includes the sharing of curriculum, learning methodologies, instructional materials, researches, facilities, and other resources that may be available.

In addition to the challenge of having different standards in teaching Entrepreneurship, two salient challenges for the educators are the lack of funds and facilities of many academic institutions for entrepreneurship education, as well as limited literature and lack of accessible source.

Results show that the main driver for the improvement of entrepreneurship education is the need for educators to continually develop their competencies in entrepreneurship education. This might lead to: 1.

2.

3.

4.

5. faculty empowerment and development. education and training. Factors that may drive to this outcome are: 1.

current different perspectives on how Entrepreneurship should be

2. tweaked current perspectives on BS Entrepreneurship (taga-salo) and 3.

4.

5.

6. slow progress in the development of instructional materials.

tere_1_for print.indd 56

3/13/14 4:41 PM

57

RECOMMENDATIONS Entrepreneurship educators suggested strengthening the collaboration national standard for entrepreneurship education and training. This involves the following: 1.

Benchmarking and formulating a standard of entrepreneurship

2. Revisiting and revising the current CHED Memorandum Order on 3. Aligning the curriculum with the Medium Term Philippine Development Plan 2010-2016, which supports job-creation for Filipinos.

It was also suggested that schools and institutions coordinate with the Department of Education to strengthen high school and elementary awareness of entrepreneurship by including the same in their curriculum. Educators recommended that UP ISSI, SERDEF, and ENEDA should take the lead role in continuing education and training for entrepreneurship educators.

Academic institutions are encouraged by entrepreneurship educators to develop a curriculum emphasizing skill development and core competencies relevant to the global market. They should also invest in faculty empowerment and development. Results show that the need for educators to develop their entrepreneurship education competencies is the driver that might lead to the following: 1.

2. development of a rich curriculum to come up with various instructional 3. development of a Graduate Program/ Continuing Education Program for 4. exercises/games/ instructional materials that would encourage & develop 5.

6. modeling and sharing of best practices in learning methodology.

The sharing of all instructional materials by sourcing them from a central development of instructional materials, and the improvement of entrepreneurship education in general. These instructional materials would encourage and develop entrepreneurial skills, capture what the market really is, and be applicable to Filipino culture.

tere_1_for print.indd 57

3/13/14 4:41 PM

58

|Philippine Journal on Innovation & Entrepreneurship |

Proceedings of the Roundtable Workshop on Enterprise Upgrading1

INTRODUCTION The need to create development strategies that are focused on the entrepreneur for upgrading micro, small and medium enterprises (MSMEs) was highlighted in this special, invitation-only Roundtable Workshop on Enterprise Upgrading.

Organized in cooperation with the Deutsches Institut f端r Entwicklungspolitik (DIE), or the German Development Institute, this workshop, which was also streamed live via the UP ISSI website, www.entrepreneurship.org. ph, started with a musical rendition of the invocation, the Philippine and German national anthems and the UP Naming Mahal hymn by Bernadette Canay and Roberto Miguel Ra単eses. The event proper started with the welcome remarks of UP ISSI Director Nestor O. Raneses, proceeded by the inspirational remarks of UP President Alfredo E. Pascual. The presentations of the resource speakers followed smoothly. Dr. Tilman Altenburg, Dr. Aimee Hampel-Milagrosa, Ms. Ma. Victoria Antonio, Ms. Maika Schmidt, and Mr. Jerry T. Clavesillas enlightened the audience on enterprise upgrading. In the afternoon, a workshop was conducted after which the UP ISSI Director, Prof. Nestor O. Ra単eses, provided the integrative synthesis and summary of the entire event.

This UP ISSI special event was attended by top executives from the

Leones, Deputy Director for Loans and Credits of the Bangko Sentral ng Pilipinas. also present during this event including Dr. Maragtas S.V. Amante, UP Vice

Edward F. David, Chairman of the Board of the Philippine Food Processors and

1 Journal on Innovation & Entrepreneurhip 1 (58-84).

tere_1_for print.indd 58

Philippine

3/13/14 4:41 PM

59

Querol-Areola, Executive Director of Manila Tytana Colleges and President of

Enterprises Research and Development Foundation, Inc. led by its President, Dr. Paterno V. Viloria.

The presentations can be accessed through the UP ISSI website, www. entrepreneurship.org.ph, or via the following link, http://entrepreneurship.org. ph/index.php?option=com_content&view=article&id=360.

WELCOME REMARKS Prof. Nestor O. Rañeses Director, UP Institute for Small-Scale Industries Prof. Rañeses welcomed everyone to UP ISSI. He began by stating the objectives of the Roundtable Workshop. These are: (1) to clearly understand how micro and small enterprises upgrade in (2) (3) implementation for accelerating the SME sector within the context of (4) to strengthen the SME network cooperation and collaboration.

Altenburg, Dr. Aimée Hampel-Milagrosa, Dr. Markus Loewe and Caroline Reeg. upgrading in the Philippines.

Professor Rañeses continued with his presentation, highlighting some relevant developments to consider. He said that the Philippines must be shielded unable to compete with advanced economies in high-skill innovations, or with low-cost economies in the cheap production of manufactured goods. He also emphasized that the country is in the brink of entering into the “demographic

tere_1_for print.indd 59

3/13/14 4:41 PM

60

|Philippine Journal on Innovation & Entrepreneurship |

At present SMEs in the Philippines are categorized as per RA 9501 according to employee number and asset size as follows: Enterprise

Number of Employees

Small Large

Asset Size

1-9 10-99

Above 3 million and below 15 million

100 and above

15 million and above

After presenting the challenges posed by the reports from INSEAD, the World Economic Forum and the World Bank’s International Finance Corp., Professor Raùeses, who also emceed the program, enjoined everyone in the

Finally, he encouraged everyone to discover new solutions from a different standpoint or look at them from same standpoint but with a different frame of learnings from the speakers.

INSPIRATIONAL REMARKS Hon. Alfredo E. Pascual President, University of the Philippines He said that the undertaking was worthy of support and he immediately granted the invitation when he received it from ISSI. The importance of MSMEs cannot be overemphasized, he said. He cited statistics to support the common knowledge that these enterprises bring the engine of economic growth in developing countries like the Philippines. He noted value-added products of large companies. He also cited examples of successful enterprises in the country but noted that they were in the wholesale or retail trade and not in manufacturing, which would have provided more value-added products and processes.

He enumerated some problems which SMEs suffer from which include as bureaucratic impositions of governments like in the registration of businesses.

tere_1_for print.indd 60

3/13/14 4:41 PM

61

He eventually asked how each can then make sure that this upgrading can

At the end of his speech, President Pascual challenged ISSI to become the lead institution in developing MSMEs in the country. He noted that UP ISSI as a unit carries the burden or lead role in paving the way for micro-small from 1% to 5% growth. The Institute, he said, must be transformed into the lead institution of innovation and entrepreneurship in the University and in the country. By becoming the center of excellence for nurturing and advancing an entrepreneurial society, noted the event as the best proof that the Institute continues to create knowledge and information for SME to grow and prosper.

He ended his inspirational message by encouraging everyone to enjoy the morning and end with a bang with solutions that can be implemented.

MSME UPGRADING (WHY DOES IT MATTER AND WHAT DETERMINES UPGRADING): EVIDENCE FROM EGYPT, INDIA AND THE PHILIPPINES Dr. Tilman Altenburg Head of the Department Competitiveness and Social Development German Development Institute / Deutsches Institut f端r Entwicklungspolitik Bonn, Germany Dr. Tilman Altenburg began by showing the outline of his presentation namely: (1) Why are MSMEs important in economic development?

(2) What determines their upgrading?

(3) Findings (4) Conclusions wages than small ones as proven by the 2013 World Development Report, MSMEs can still contribute to higher productivity using two mechanisms: (1) entry of newcomers challenges incumbents and thus enhances

as inventors.

However, Dr. Altenburg noted that these two mechanisms do not work following observations:

tere_1_for print.indd 61

3/13/14 4:41 PM

62

|Philippine Journal on Innovation & Entrepreneurship |

Developed countries

Developing countries

towards higher productivity, the persisting and widening productivity gaps, the

that MSEs ARE drivers of development if they challenge incumbents and drive innovation and if they increase the gains of specialization in the overall production system. In this respect, he concluded that MSE upgrading is crucial.

Dr. Altenburg said that while there is an obvious diagnosis about the conditions of the MSMEs in developing countries, there was no consensus on the explanation about their stagnation. There were also many monocausal narratives in the past such as lack of entrepreneurship (as espoused by renowned American (which includes the ease of doing business). These, coupled with the “very different assumptions about ‘binding constraints’ and growth potential once these are project.

While surveys like the ones conducted by World Bank cannot capture individual stories and in-depth case studies do not readily provide patterns, the to company registries, near-to representatives list, recommendations and walking the street especially if they are in geographical clusters. This research design also made the study purposive and explorative. These successful upgraders were interviewed to determine their success factors. And they were then compared with the non-upgraders by interviewing the non-upgraders on what they did differently.

While the study started with the determinants most offered by literature (the entrepreneur’s and the enterprise’s characteristics, personal and business networks, and the business environment), the study clustered the upgrading into two and came up with sample SMEs in both: Quantitative Improvement (MSE upgrading)

Qualitative Improvement (Innovation)

Employment, sales, return of investment, assets, turnover

Innovation

have grown fast in relative terms considering the climate in each country

tere_1_for print.indd 62

than competitors

3/13/14 4:41 PM

63

and developed the onion model with the following as the innermost to outermost layers: (1) the entrepreneur: human capital, family background, work experience, (2) the enterprise: location, size, degree of formalization, workforce characteristics, product portfolio, strategy, market orientation, (3) the social networks or personal relations with family, relatives, friends, neighbors, etc.

(4) the business networks: memberships in business organizations, relations with buyers and suppliers, relations with competitors (5) regulations The study also had to make do with the employment number as a criteria for classifying the enterprise into micro, small and medium as the number is easy to observe and remember as opposed to paid-in capital and sales. It also does not sustainability or maturity of the company.

Dr. Altenburg nevertheless noted that there are different threshold levels what drives SMEs to go to the next level. He also said that despite the boom-andbust tendency of companies, what were really considered are companies which upgraded from one level to the next from inception to 2012 regardless of the intervening slack or up-and-down performance.

Threshold Employee Level per Country Country

Micro

Small

Medium

India

1-9

10-19

20-99

Egypt

1-9

10-49

50-99

Philippines

1-5

6-10

11-99

constraints and success factors among upgraders and non-upgraders in the three countries as follows: Determinant

Constraint

Success Factor

Entrepreneur

Low education No training

Human capital through quality education, training, international exposure, and work experience

Enterprise

Lack of market information No worker motivation High turn-over

treatment and participation Systematic R&D and market research

tere_1_for print.indd 63

3/13/14 4:41 PM

64

|Philippine Journal on Innovation & Entrepreneurship |

Business environment

Value chains

The study noted that gender of the entrepreneur did not have any considerable impact on upgrading. Degree of formalization did not have any effect because it was mostly a deliberate decision to remain informal. State bureaucracy was seen as manageable for SMEs but the problem really was the insecurity or

expectations.

In conclusion, Dr. Altenburg was happy to note that there were upgraders the upgrading achievement. He also noted different trajectories in the different three countries involved and there were different sectors in each country in the study as well. Hence, he said, there is no such thing as “SME Guidebook for the as often emphasized in literature. He also mentioned that the entrepreneur, the innermost determinant in the onion model, matters.

Against the challenges, strategies or mechanisms to surmount them were tabulated as follows in the study: Challenges

Entrepreneur

Enterprise

Social Network

Business Network

Business Environment

Finance

Personal savings

Employees as stakeholders

Family savings and friends

Cash advance

Bank loans

Labor

Personal labor

Incentives for workers to stay

Family labor

Pooling or outsourcing

Availability of skilled workers

Security

Readiness to accept risks

Portfolio

Insurance

Economic stability Rule of law

International exposure

Own market research

Personal outreach

Global value chains

Published market research information

Quality education

R&D

Exchange of ideas

Value chains

Availability of external training

Technology and creativity

have money, connections, good education, international experience, land, relevant work experience, motivation, ability to accept risks and can thereby circumvent

tere_1_for print.indd 64

3/13/14 4:41 PM

65

However, Dr. Altenburg emphasized that development strategies focusing

practice-oriented research could help the excluded circumvent the constraints.

QUESTIONS AND ANSWERS: DISCUSSION WITH PLENARY Dr. Tilman Altenburg: All policies that contribute to change in the 90s when people thought it was no good like World Bank except some individual economists which resulted in a great failure. Greening efforts can also be done if the government does something.

Dr. Ed Q. Canela: Do you still think there is still a role for industrial policy despite the many things or inner voices emerging now?

Romeo Carandang: There is a mismatch between supply and demand we want to address the problem of missing middle so we provide help to small project), wholesale lending to cooperatives who participate in CSF but limited contribution to address the matter.

Dr. Tilman Altenburg: I am not an expert on Philippine context or business environment.

Romeo Carandang needed.

Question from one delegate: What is the applicability of this study to the Philippine setting given its archipelagic geography including the geographical constraints?

Dr. Tilman Altenburg: Infrastructure constraints are indeed countryProf. Nestor O. Ra単eses: What is distinct, however, is the entrepreneur, who is seen as the necessary and Danillo A. Songco: The methodology in the study is the interview so by the program in Bangkok which pushed a lot of business. The great expense of upgrading is emphasized so that government subsidy plays a great part. I would

tere_1_for print.indd 65

3/13/14 4:41 PM

66

|Philippine Journal on Innovation & Entrepreneurship |

literacy but also on the loan products being offered because what entrepreneurs sometimes need are not the ones available or being offered.

Louella D. Leones: BSP is addressing it through CSF. If micro enterprises graduate to medium level, we offer a program. We conduct a lot of training but we need a follow up. BSP does grassroots training and does follow up. BSP surely Dr. Carl Balita my PHD in PLM, 3000 enterprises were surveyed. In my observation, there are eight (8) indicators: opportunity is the greatest but capacity is the lowest. There are two reasons for absence of upgrading but ultimately, how do you upgrade if capacity is not there. The prime motivation is the family but it is also a constraint.

Dr. Tilman Altenburg: Financial aspect affects both the demand and supply sides. Subsidies are a valid point. If the government has a limited

to different environments.

Findings and Conclusions from the MSME Upgrading Project: Philippines Dr. AimĂŠe Hampel-Milagrosa Institutional and Agricultural Economist German Development Institute / Deutches Institut fur Entwicklungspolitik Bonn, Germany Dr. AimĂŠe Hampel-Milagrosa began her presentation by giving an outline of her presentation as follows: (1) (2) (3) (4) (5) (6)

Overview of Philippines SMEs Constraints to SME upgrading in the Philippines Success factors for SME upgrading in the Philippines How entrepreneurs combine factors to create strategies Main messages

As an overview, she noted that as of 2009, MSMEs comprise 99.6% of all businesses in the Philippines and they are generally distributed as follows:

tere_1_for print.indd 66

3/13/14 4:41 PM

67

Wholesale and retail trade Manufacturing Hotels and restaurants Real estate (renting and business activities) Community, social and personal services Others

(49%) (14%) (13%) (6%) (6%) (12% )

Out of 112 enterprises the study considered, the following clustering was made: Sample enterprises Upgraders

21

Non-upgraders

91

There was a decision to focus on manufacturing industry because this is where most innovations come from.

Industry distribution Textile and garments

31

Food processing

49

Footwear and leather

32

A huge chunk of the sample enterprises came from Davao because this is where most food processing industries are.

Regional Distribution National Capital Region

36

Central Luzon

12

CALABARZON

1

Central Visayas

1 62

Location Rural

30

Urban

82

In describing the start-ups’ upgrading, the movement from small to medium enterprise employment thresholds was noted from the inception of the enterprises until 2012. There was also a notable increase in access to regional, national and international markets among the upgraders as opposed to merely increase in access to the local and regional markets among non-upgraders.

tere_1_for print.indd 67

3/13/14 4:41 PM

68

|Philippine Journal on Innovation & Entrepreneurship |

The constraints and success factors were noted and clustered as follows: Constraints Across sectors Finance (lack of access to, literacy) Workers (training, motivation, ethics,

loyalty)

to food processing industry) processing industry)

Technology (low levels) textile and garment industry) Success Factors Across Sectors Entrepreneur Education, training and motivation Proactive search for information Own capital International exposure/Work experience

Working with agents Participation in trade fairs Location / Security

Enterprise/Employee Catering to local taste Employees (kind, training and welfare) Investing in technology Network Full family support in all business aspects (+Finance) Strong relation with buyers and suppliers (+Feedback) Integration into Global Value Chains Being in productive social networks Business Environment Employment regulation Access to government facilities and services Trade fairs, exhibits

In order to surmount the challenges, the entrepreneurs employed different strategies in the various determinants in the onion model. To beat the

tere_1_for print.indd 68

Entrepreneur

Education, training, proactive search for information and capital

Enterprise

Simple R&D, training of core workers, investing in technology

Networks

Family support, strong buyer and supplier relations, integration into the value chains

Business environment

Access to credits, trade fairs and exhibits, access to government services and facilities

3/13/14 4:41 PM

69

To have and keep skilled workers, one entrepreneur used the following strategies: Challenge: Labor Entrepreneur

Education, training, international exposure, work experience

Enterprise

Training of core workers, preferential hiring and improve workers’ welfare

Networks Business environment

Availability of skilled worker, employment regulations

In conclusion, Dr. Hampel - Milagrosa noted the following as major insights from the study: (1) Entrepreneurs use a combination of strategies to upgrade.

(2) Entrepreneurs simultaneously need to overcome structural and sector (3) Intangible characteristics sometimes as important for upgradingas tangible ones.

(4) Personal and professional networks matter a lot.

(5) Industrial development and international trade policies should harmonize.

(6) of strategies at all levels.

QUESTIONS AND ANSWERS: DISCUSSION WITH PLENARY

Dr. Ed Q. Canela: For training providers and trainers, how do we develop training programs if we acknowledge that entrepreneurs also do it themselves?

Dr. Aimée Hampel: We must restructure training programs to respond to changes and developments. Linking entrepreneurs with students via DOST’s Lakbay Aral program is a good model partnership between entrepreneur and government agency to facilitate entrepreneurship development.

Ma. Victoria Antonio: Where do business development services come in?

Dr. Aiméee Hampel-Milagrosa there is one sector which avails of business development services, it is the tourism sector but this sector was not interviewed.

Ma. Concepcion M. Arcega: What are the strategies to consolidate preparation and gone to trainings here on food safety at UP ISSI. We have existing

tere_1_for print.indd 69

3/13/14 4:41 PM

70

|Philippine Journal on Innovation & Entrepreneurship |

wonder what strategies can be done to consolidate supplies in order to compete globally. Now there is only a partnership with East West Seeds and a lot more.

Dr. Aimee Hampel-Milagrosa: There must be farmers who link farmers to the markets. Investing in communication and dialogue is crucial.

One must be persistent in telling farmers how to organize and the importance of organization.

Question from one delegate: Why the three countries?

Dr. Tilman Altenburg: Just by chance.

Prof. Nestor O. Raneses: But, of course, Philippines is in the study because of Dr. Hampel – Milagrosa.

Dr. Aimee Hampel-Milagrosa: …which also helped the country.

Prof. Nestor O. Rañeses: I would just like to comment on the concern of Ms. Arcega. There are plenty of us in this room and we are all here. So what is 9501, 10% must be given to MSE. But we must look at the problem by focusing on the missing middle.

Edward F. David: I can note the absence of a representative from the Department of Agriculture. The food sector is not the concern of DTI. In the raw material supply, the program is one product per town so there is no volume. that in Davao, the people are rich. Before, if you want to go into farming, they say you go to Mindanao. But typhoons strike it now. In fairs, UP ISSI and DA must go

Question from one delegate: How do you incorporate entrepreneurial Dr. Aimee Hampel-Milagrosa: I have cited recommendations in the study.

Magdalena Mendoza: Can we teach the entrepreneurial spirit? A lot of the factors on upgrading depend so much on the entrepreneur. In the two senior years, livelihood and entrepreneurship skills must be incorporated to develop critical competencies at age 18. Hopefully, we can generate more enterprising Prof. Nestor O. Rañeses: It is actually an oxymoron looking at the entrepreneur as the success factor and also the inhibitor. So, to make Philippines grow, we must understand the factors.

tere_1_for print.indd 70

3/13/14 4:41 PM

71

Dr. Aimee Hampel-Milagrosa: We can also incorporate in the subject a tour in micro – small and small-medium enterprises and not to large enterprises just to encourage the students to start.

Dr. Herminia Fajardo: Education must be at the pre-school level and among the faculty.

EXPERIENCES IN SME UPGRADING IN THE PHILIPPINES – SMEDSEP Ma. Victoria Antonio and Maika Schmidt Promotion of Green Economic Development (ProGED) Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH or the German International Cooperation Ms. Antonio began the presentation by giving an overview of the GIZ which of international government cooperation. It has been working in the Philippines

Meanwhile, PSP SMEDSEP is a recently concluded nine-year project in cooperation with the Department of Trade and Industry (DTI) with the primary objective of improving the performance of SMEs in the Visayas region.

There were three (3) phases of the PSP SMEDSEP project: (1) Phase 1 was the pilot stage where business and investment climate models were introduced in was divided into three more parts: (a) MSME Strategy development, (b) improved local and regional competitiveness, and (c) improved sector competitiveness.

Ms. Antonio also announced the present project with DTI Regional Operations and Development Group (RODG) from January 2013 - December 2015 that aims to enhance competitiveness of enterprises in Cebu and Bohol through the adoption of climate-smart and environment-friendly strategies. The idea behind the project is that if they go green, they have more resources to plough back to their operations. She also announced the website, greeneconomy.ph, for the audience to learn more about the project.

Going back to the subject proper, Ms. Antonio noted that the studies were an insight on the behavior of SMEs in the Philippines. Six such studies were enumerated.

tere_1_for print.indd 71

3/13/14 4:41 PM

72

|Philippine Journal on Innovation & Entrepreneurship |

AIM Policy Center’s Enterprise Survey 2009 as part of the PCCRP (not published) Evaluation of the SME Development Plan 2004 – 2010 2010 Baseline MSME Survey for the last phase of PSP SMEDSEP (2010 – 2012) 2012 Follow-up MSME Survey for the last phase of PSP SMEDSEP (2010 – 2012) 2012 Case Studies to evaluate the impact of PSP SMEDSEP on MSME Development 2010 Study on Gender Issues

Ms. Maika Schmidt continued with the presentation with the synthesis of the aforementioned studies and noted the characteristics of the SMEs in the Philippines. These include lack of new technology, predominance of women entrepreneurs, and 40-year old and above entrepreneurs.

Also, upgrading was seen in these studies in the form of growth in

the value chain, market access, price of inputs, and lack of well-trained staff. staff, entrepreneurial training and/or consultancy, networks, matchmaking and

among the challenges, there were really lacking market information, unstable

Concluding the presentation, Ms. Schmidt stressed that knowledge about and access to markets are crucial as well as formal and informal networks. reliance on savings is a good thing, whether the 40-year and above age of entrepreneurs has an impact, and whether gender should be an issue given that most enterprises are owned by women.

tere_1_for print.indd 72

3/13/14 4:41 PM

73

CHALLENGES AND OPPORTUNITES OF SME UPGRADING WITHIN THE CONTEXT OF THE PHILIPPINE MSMED PLAN 2011-2016 Mr. Jerry T. Clavesillas Director, DTI Bureau of Small, Medium Enterprises Development Mr. Clavesillas started by showing the current framework of the MSMED development plan which was crafted after a rigorous discussion and consultation with the various stakeholders from all over the country spearheaded by the MSMED Council composed of the DTI, DILG, DOST, DOT, DENR, CDA, UP ISSI, PCFC, NLDC and DA among others. The framework is projecting an increase in the MSMEs’ contribution to the economy by 2016.

He noted that the primary reason for the SME upgrading in the Philippines is to generate labor and employment. This is also how SMEs are gauged, that is, how much labor a particular enterprise has generated and whether the interventions from the private and public sectors contributed to this labor generation. As an monitoring the SMEs and creating a database of all SMEs, which of these SMEs have availed of interventions and how much the interventions cost.

He stated that DTI is at the forefront since it is tasked in developing the market. It is acknowledged, he said, that before you develop a product, you must develop the market. In organizing the MSMED Council, however, he stressed that it can readily be seen that the efforts are being institutionalized and synthesized.

He ended by conveying his hope that DTI’s interventions will inevitably result into a more vibrant MSME sector in the country.

The challenges and opportunities in the four determinants of upgrading are noted as follows: BUSINESS ENVIRONMENT • • • • • • • • •

tere_1_for print.indd 73

Challenges High cost of doing business (taxes, fees, etc.)

Registration and licensing procedures are tedious, lengthy and complicated Efforts to develop a BE are not coordinated, harmonized and sustained by concerned agencies Several regions lack investment codes or are not implementing them Business development is too focused on micros Several regions lack the infrastructure and utilities needed to promote business and investments Some regions are prone to risks

• • • •

Opportunities Streamlining of Business Regulatory requirements Philippine Business Registration National Economic Research and Business Assistance Center (NERBAC) Various LGUs’ initiatives in streamlining business registration

3/13/14 4:41 PM

74

|Philippine Journal on Innovation & Entrepreneurship |

ACCESS TO MARKET Challenges • needs • Stiff competition from unregistered enterprises and cheap imports • Limited access to organized marketing networks of independent consolidators • • Poorly packaged and labeled products • Limited capacity for product development and design • Lack the capacity to use modern technology, i.e. internet, for marketing purposes • • Lack access to market information

• • • • •

•

Opportunities Enhanced Support for trade Fairs and Exhibitions Product Development and Design Services Export Pathways ProgramRegional Interactive platform for Philippine Exports (RIPPLES) OTOP Tindahang Pinoy Program on Philippine Traceability for Revitalized Agriculture Competitiveness Enhancement (P-TRACE) Information Sessions on free Trade Agreements

ACCESS TO FINANCE Challenges • Stringent and voluminous requirements and long processing time of loan applications • High interest rates • • • • No funds available for start ups • No access to venture capital funds • • Limited access to information regarding the sources of funds and how to avail

Opportunities • •

Agri-Agra Reform Credit Act

PRODUCTIVITY AND EFFICIENCY • • • • • • • • •

Challenges The unsteady supply and high cost of water and electricity reduce their productivity Lack of information and education on productivity Level of productivity is reduced by their poor working conditions arising from non-compliance with labor laws Production systems are not environment friendly Lack in the knowledge and capacity to comply with international quality standards Piracy of highly skilled workers Vocational and technical schools do not offer learning programs that are

• • • •

Opportunities Productivity Awareness Programs ISTIV Small Enterprise Technology Upgrading Program (SET UP) Shared Service Facilities (SSF): an integration of the various interventions by the various providers with DTI identifying potential participants, training needs, and training providers

Low investment in productivity-enhancing technologies The services of government-subsidized technology/packaging centers are expensive

• cost

tere_1_for print.indd 74

3/13/14 4:41 PM

75

WORKSHOP PRESENTATIONS After the plenary speeches, the delegates were grouped into three (3) sectors, the academe, the government and the industry and service sectors. They talked about the challenges and constraints to upgrading and proposed action plans for their respective sector to consider.

A. Academe Facilitator: Ms. Antonette L. Dungca, UP ISSI Rapporteur: Atty. Maria Theresa M. Bautista, UP ISSI Group Leader: Prof. Eunice Mareth Querol-Areola, ENEDA Issues and Concerns: 1.

2.

3.

4.

5.

Solutions and Plans of Action:

Resistance to relinquish entrepreneurial power to professional management providers How to drive innovation Need to focus on the entrepreneur Lack of access to BDS providers There are efforts but there is a gap in communication

6. between predecessor and successor 7.

8.

9.

10.

11.

Information dissemination related to programs and trainings on entrepreneurial trainings Vague government policies and different implementation for start-ups Petty corruption in the government which is manageable but it still exists

12.

13.

e.g. taxation, labor laws, and govt. subsidy Novel and innovative technologies and products

1.

Training programs that cater to behavioral transformations 2. No known solution 3. Heavier stress on trainings for the young; need to start entrepreneurship at a young age; BEST program of SERDEF (kindergarten and Gr. 1 pupils with DepEd) 4. Institutions to provide trainings and BDS 5. Identify the gaps 6. Identify the unique situation and dynamics of family businesses 7. Stress the importance of networks 8. Importance of mobile entrepreneurial training and workshops 9. Openness and willingness to be part of the international research such as this 10. Policy implementation should be uniform and clear 11. Group inspection to avoid collusion 12. Studies should look into the incentive structure “space”, “time” and “resources” 13. Systematic R and D and awareness on Intellectual Property

What the academe can do to contribute to enterprise upgrading Policy

Review of counterproductive policies Evidence-based policy making Transforming research into policy and understandable outputs

Training

Provide incubation programs like the program in UP Outcome-based design and more on experiential learning beyond the theoretical learning Creativity should be cultivated from the lowest level of education

Research Systematic dissemination or sharing such as this Roundtable Workshop

tere_1_for print.indd 75

3/13/14 4:41 PM

76

|Philippine Journal on Innovation & Entrepreneurship |

B.

Industry and Service Sector

Facilitator: Ms. Crispina B. Almonte, UP ISSI Rapporteur: Ms. Joanna Rose T. Laddaran, UP ISSI Group Leader: Dr. Carl Balita, Carl Balita Group of Companies Parameters

Issues and Concerns

Entrepreneur credits

Solutions Entrepreneurs’ education to the available resources Financial institutions make information entrepreneurfriendly

Action Plans Strict implementation of the Review and simplify requirements and procedures

Banks are not motivated in extending assistance to Life-long education of entrepreneurs as a discipline (capability

Educate the family

Develop a pool of mentors and coaches Life Enterprises for Family Enterprises (LIFE)

management of family enterprise Enterprise

Networks

Lack of initiatives and innovations on the part of entrepreneurs and sectors

Assistance on product development, process improvement and product quality improvement through R&D and innovation

Introduce, develop and use the Hackathon process

Trial and error management

Leadership and management capabilities of entrepreneurs through education

Educate entrepreneurs on the science of leadership and management

Succession planning

Visioning for sustainability

Inadequate social networks social network learning Organize and strengthen association by industry or sector

Identify value chain per locality as a unit of measure for tracking performance Revisit and prioritize industry sectors

Business networks

Weak local chamber movement

Encourage membership Educate business groups

Educate members Train leaders

Business environment

Business friendliness of local governments and other agencies

processes and procedures citing best processes

DILG to prescribe standards using information technology Get help from media

tere_1_for print.indd 76

3/13/14 4:41 PM

77

C.

Government

Facilitator: Engr. Ma. Luisa Solarte-Lee, UP ISSI Rapporteur: Ms. Bernadette Escoto, UP ISSI Group Leader: Mr. Romeo Carandang, Development Bank of the Philippines Constraints • • • • • • • •

Value chain Choice and sustainability of business Lack of market information Entrepreneurial mindset Availability of raw materials Linking of raw materials to processors Competition with imports/cheaper products and with small scale and large scale enterprises Availability of right skills Technology Ease of doing business

• • •

Possible Solutions • • • • • • • •

Do more rigorous mentoring/coaching Facilitate industry/business associations by sector/ industry cluster Increase government support to fund training or capacity enhancement Do follow-through Craft a more aggressive promotion plan on info dissemination and a strategic communication plan

• •

•

information center with competent/passionate personnel (if possible at the barangay level) committees Lobby for bills in the Senate/Congress

Synthesis, Conclusions and Next Steps Prof. Nestor O. Rañeses Director, UP Institute for Small-Scale Industries The director synthesized all the presentations and highlighted the important points as follows: Entrepreneurship must essentially involve values formation.

Entrepreneurship teachers must be entrepreneurs themselves.

SME upgrading efforts must be coordinated and integrated.

There are many upgraders despite the various constraints.

The onion model explains multi-factor upgrading.

Informality is no constraint.

Regulation and state bureaucracy are not constraints in themselves.

Personal and professional networks matter a lot.

SME Roving Academy: integration of various interventions by various providers.

tere_1_for print.indd 77

3/13/14 4:41 PM

78

|Philippine Journal on Innovation & Entrepreneurship |

driven

He further approach to

said the study presented a upgrading. The Pareto of Drivers

multi-factor include the

that the entrepreneurial behavior and mindset are paradoxical in the context of Filipino entrepreneurs because they can either be (1) an inhibitor - myopic and short- term ( no growth mindset) or (2) a critical success factor (strong locus of education and training).

constraints to upgrading provides strength and intensity of policy direction with the resulting bias on the entrepreneur and business environment.

He noted the challenges and constraints as follows:

Access to markets

• • • • • • • • • • • • • • • • • •

Productivity and

• • • • • • • • • • • •

tere_1_for print.indd 78

Not responsive to market needs No access to market hubs No formal marketing plans Limited access to organized marketing networks Limited access to mainstream domestic markets Poor packaged and labelled products.

Limited capacity for product development and design.

Lack the capacity to use modern technology, i.e. Internet, for marketing purposes.

Lack access to market information.

Collateralized credit corporations Information asymmetries

Weak technological foundations and capabilities Failure to engage in innovation and research and development Inadequate awareness on alternative technologies and support services Lack of education and promotion on productivity improvement Not compliant to international quality standards, requirements, and good manufacturing practices Use of information and communications technology is not pervasive.

Low level and intensity of technology content in the whole supply chain High cost of electricity , water and other utilities Inadequate human resource development Government programs on productivity improvement are not coordinated and convergent

3/13/14 4:41 PM

79

Business environment

• • • • • • • • •

High cost of doing business in the country Burdensome bureaucratic procedures Inadequate physical infrastructure Weak public-private policies Weak or missing links with large enterprises Inadequate support to start up entrepreneurs Lack of holistic and integrated approach to enterprise development implementation and growth

He, too, enumerated some strategies to surmount the above mentioned challenges as follows: Entrepreneur

Networks

• • • • • • • • • • • •

Accelerated Training by Public Training Institutes Training Levies Apprenticeship Best Practices Network General Taxation to Finance Training Fiscal Incentives to Reward Training Education and training institutes on quality, productivity and technology Align the Export Pathway Program Priority Sectors with the OTOP Regional clusters and the SETUP Sectors and the innovative ISTIV to achieve optimum impact and focus.

• • •

Accelerate the setting up of TBI and Small Business Incubation Centers (SBIC).

Set-up the national quality infrastructure that will converge and standardize the

• practices in all aspects of business operations and technology acquisition and diffusion.

• Establish e-centers to enhance access knowledge and technology especially those in remote areas. Bundle communication technologies with business applications •

• •

belong to the industry cluster chain.

Set up common service facilities and technology assistance centers. based on a credible statistical system.

Business Environment

tere_1_for print.indd 79

• • • • • • • • •

Information and market materials in different languages Big brother small brother supply chaining Clustering and market “ hubbing “ Interest-free loans and credit guarantee systems

3/13/14 4:41 PM

80

|Philippine Journal on Innovation & Entrepreneurship |

programs and enhancing credit worthiness of SMEs. Finally, he thanked all for their attendance to the Roundtable Workshop which he noted as a testament to the shared commitment to uplift the SMEs in the Philippines.

ALPHABETICAL LIST OF DELEGATES

Abad, Jerry Kent B., Science Research Specialist II, DOST - MIMAROPA Abilay, Regional Director, DOST - MIMAROPA Acosta, Ace, OVCRD, UP Agustin, Maria Theresa A., Director, Development Academy of the Philippines Altenburg, Tilman, Head, Department of Competitiveness and Social Development, GDI Amalin, Divina M., Consultant, COCOAPHIL Amante, Maragtas S.V., Vice President for Administration, UP Antonio, Ma. Victoria, Promotion of Green Economic Development Arce, Tim, OVCRD, UP Arcega, Maria Concepcion M., President, Mills Enterprises Florida – Lubao Organic Farmers Association Querol-Areola, Eunice Mareth, Executive Director; President, Aparejado, Dang, PhilExport Balita, Carl, Chair, Carl Balita Group of Companies Bartolome, Nancy, Professor, Entrepreneurship Dept, UST Bernardo, Dianne Marie, Planning and Evaluation Service, DOST Canela, Eduardo Q., Consultant, Asian Development Bank Carandang, Romeo B., Assistant Vice President, Development Bank of the Philippines Cariaso, Teresa Leighlany T., Chief Planning Division, Cooperative Development Authority of the Philippines Clavesillas, Jerry T., Director, BSMED, DTI Cruz, Cynthia P., Executive Director, Institute for Labor Studies Cubillas, Leoncio Jr. T., Chair, Extension and Technical Development Services, UP ISSI David, Edward F., Chairman of the Board, Philippine Food Processors and Exporters Organization, Inc. dela Cruz, Jazzie, Senior Economic Development Specialist, National Economic Development Authority de Vera, Ian Jester, Chair,

tere_1_for print.indd 80

3/13/14 4:41 PM

81

Esmane, Janice, Department of Tourism Fajardo, Herminia R., Trustee, SERDEF Floro, Franciso R., Chair, MSME Committee Philippine Chamber of Commerce and Industry Formento, Rosalie B., , DOST NCR Fortuna, Teresita C., Regional Director, DOST NCR Gonzalez, Nelia T., Trustee, SERDEF Gonzales, Jovito, Chief Science Research Specialist, Investment and Operations Division, TAPI, DOST Guanzon, Jaime Jr. S., University Extension Specialist III, UP ISSI Hampel-Milagrosa, Aimee, Institutional and Agricultural Economist, GDI Bass-Hernandez, Antoinette, Assistant Vice President for Academic Affairs, UP Hernandez, Leo, Manager, Davao Cacao and Realtor, Consortium Realty Lahan, Zulaizah Genesis M., NWPC Lastimosa, Francisco, Corporate Planning Department, People’s Credit and Finance Corporation Lavador, Serenidad F., Technical Adviser, Board of Trustees, SERDEF Leones, Louella D., Deputy Director, Bangko Sentral ng Pilipinas Magpayo, Rosette D., Meridian International Learning Experience Mendoza, Magdalena, Senior Vice President, Development Academy of the Philippines Mercado, Jerry P., Supervising Research Specialist, DOST MIMAROPA Mirasol, Grace T., PHILEXPORT Morales, Jan Junio Morandante, Melchor, Chair, Chapterization ENEDA Region IV Navo, Nova Z., SERDEF Niggel, Matthias, GIZ Opeña, Alice M., Chief, Policy Planning and Research Division, DTI BMSMED Pascual, Alfredo E., President, University of the Philippines Pasquin, Eric, Faculty, UST Perez, Emelda J., President, Builder’s International Placement Rañeses, Nestor O. Director, UP ISSI Reyes, Emmanuel C., Phil Foodex Rosales, Arlene G., Iloilo City Salazar, Irene D., Department of Finance Schmidt, Maika, Promotion of Green Economic Development Kevin Sharp, USAID Songco, Danilo A., President and CEO, Pinoy Me Foundation , Edith, NISMED Villaviray, Aurora Luz, , Department of Finance Viloria, Paterno V., President, SERDEF

tere_1_for print.indd 81

3/13/14 4:41 PM

82

|Philippine Journal on Innovation & Entrepreneurship |

ABOUT THE DIE SPEAKERS Dr. Tilman Altenburg Tilman Altenburg is the Head of the Department Competitiveness and Social Development at the German Development Institute/ Deutsches Institut f端r Entwicklungspolitik (DIE), the government-funded think tank for development policy in Germany.

Before joining DIE in 1995, Mr. Altenburg was a research fellow of the Latin American Institute of the Free University Berlin and the Philipps University Marburg. He received his doctorate in Economic Geography from the University of Hamburg, Germany in 1991. Since 1986 Mr. Altenburg has done empirical research on issues of economic development in Latin America, Asia and Africa, with a focus on competitiveness, industrial and innovation policy, SME promotion and value chain development.

Currently he is coordinating several international research projects on low carbon industrial policy in developing countries.

Mr. Altenburg has published more than 100 academic papers on these issues, and he is regularly working as an adviser to the German government and international development agencies. Dr. Tilman Altenburg regularly works as an adviser to the German government and several international development agencies.

He is an avid bird watcher and photographer.

Dr. Aimee Hampel-Milagrosa Development Economics (MSc, cum laude) from the University of the Philippines - Los Ba単os and the University of Gent, Belgium respectively. At the age of 30, at Wageningen University and Research Centre in the Netherlands under full scholarship from the International Food Policy Research Institute and Wageningen University Mansolt Graduate School.

After obtaining her doctorate in 2006, she worked as a Senior Researcher at the Department of Economic and Technological Change at the Center for working as a Senior Researcher at the Department of Competitiveness and Social Development of the German Development Institute (DIE).

Alongside working under BMZ-funded projects, she is a consultant on private sector development, gender and industrial policy issues for the Bonn International Centre for Conversion (BICC), Danish International Development the United Nationals International Development Organization (UNIDO) in Vienna and Hanoi.

tere_1_for print.indd 82

3/13/14 4:41 PM

83

Dr. Hampel’s most recent publications include a forthcoming book on MSE upgrading in the Philippines (2013), a book on gender related obstacles to Vietnamese women entrepreneurs (in English and in Vietnamese, 2012) and a book on the impact of tradition and regulation on Ghanaian entrepreneurship (2011). basic Italian.

PICTURES

The delegates with the resource persons and conference organizers.

UP ISSI Director Nestor O. Raneses welcomes all the delegates to the event.

tere_1_for print.indd 83

UP President Alfredo E. Pascual provides the inspirational remarks.

3/13/14 4:41 PM

84

|Philippine Journal on Innovation & Entrepreneurship |

presentation.

Dr. Aimee Hampel-Milagrosa shows

Ms. Maika Schmidt continues the GIZ studies presentation.

Philippines

Director Jerry T. Clavesillas of DTI BMSMED showcases the perspective from the MSMED Council.

Ms. Victoria Antonio presents the studies made by GIZ.

UP ISSI Director Nestor O. Ra単eses synthesizes the event.

tere_1_for print.indd 84

3/13/14 4:41 PM

85

Proceedings of the Roundtable Discussion on Priming Philippine SMEs for the 2015 ASEAN Integration1 (13 August 2013)

INTRODUCTION The need to heighten the readiness of SMEs and deepen the understanding to overcome them was highlighted in this Roundtable Discussion on Priming Philippine SMEs for the 2015 ASEAN Integration held on 13 August 2013 at the UP ISSI Teodoro Room.

This event aimed to map where the Philippine SMEs are with regard the inevitable intraregional economic cooperation, help enhance awareness of the impact of the ASEAN integration among various stakeholders and boost readiness of the SMEs. The end view was to craft practical and realizable solutions that will mainstream Philippine SMEs with their counterparts in the ASEAN region.

Organized by the UP Institute for Small-Scale Industries in partnership with the Department of Trade and Industry Bureau of Micro, Small and Medium Enterprises Development (DTI BMSMED) and the Small Enterprises Research and Development Foundation, Inc. (SERDEF), the event started with a warmup activity initiated by event host, Ms. Crispina B. Almonte. All the participants took turns introducing themselves after which the event formally started with the invocation and the singing of the Philippine national anthem and the UP Naming Mahal.

This UP ISSI special event went on with the featured presentations of the invited guests including Hon. Alfredo E. Pascual, President of the University of

Executive Director and Associate Professor of Economics of the Asian Institute

1 Cite as UP Institute for Small-Scale Industries. (2013). “Proceedings of the Roundtable Discussion on Priming Philippine SMEs for the 1 Philippine Journal on Innovation & Entrepreneurship 1 (85-114).

tere_1_for print.indd 85

3/13/14 4:41 PM

86

|Philippine Journal on Innovation & Entrepreneurship |

Clavesillas, Director of the DTI Bureau of Micro, Small, and Medium Enterprises Development.

Prof. Nestor O. Rañeses, Director of the UP Institute for Small-Scale Industries presided over the entire event. There was a robust participation from the audience after each presentation. Questions were raised by the participants which were readily and succinctly answered by the resource persons. There was a lot of sharing of insights. Noted among the 90-plus attendees were Prof. Eunice Mareth Q. Areola of ENEDA, Ms. Fenina M. Bonoan of DTI BETP, Mr. Rosulo Bueno of DOT, Ms. Cristina Candelaria of DOST, Ms. Ma. Juanita P. Carpio of PAO, Mr. Eulogio T. Castillo of CDA, Ms. Myrna R. Co and Ms. Herminia Fajardo Francisco R. Floro of MAP MSME, Ms. Juliet R. Fojas of ILS-DOLE, Mr. Jaime C. Fraxidio Jr. of Union Bank, Ms. Rosemarie G. Garcia of DOST-FNRI, Dir.Edgar NWPC, Ms. Ma. Amelou E. Lim of IPOPHIL, Ms. Irene Macas of TESDA, Ms. Anne Daisy T. Omila of DTI BPS, Ms. Alice M. Opena of DTI, Mr. Vic Pati-on of McBride Corporation, Atty. Elizabeth R. Pulumbarit of UP TTBDO, Ms. Jennifer Ragma of the Tariff Commission, Ms. Cristina F. Rodrigo of CITEM, Mr. Joel S. Rodriguez of PITC, Ms. Irene Salazar of DOF, and Mr. Ray Tadeo of ECOP among others.

The presentations can be accessed via the UP ISSI website, www. entrepreneurship.org.ph, or via the following link, http://entrepreneurship.org. ph/index.php?option=com_content&view=article&id=394.

WELCOME REMARKS Prof. Nestor O. Rañeses Director, UP Institute for Small-Scale Industries Prof. Rañeses welcomed everyone to the UP ISSI which he dubbed as the Center for Creating and Empowering Filipino Enterpreneur Today and Tomorrow carrying the tagline, Usaping Pangnegosyo Ilaw, Salamin at Sandata ng Industriyang Pilipino. He thusly reminded everyone of the objective of the event which is to discuss burning issues concerning SMEs which hopefully would not just surface ideas but also craft solutions.

One Vision, One Identity and One Community.” one prosperous region not just dominated by the top three nations, Singapore, Malaysia and Thailand.

He cited the main elements of the ASEAN Economic Community: (1) the

tere_1_for print.indd 86

3/13/14 4:41 PM

87

He noted that the AEC reported the achievements in these four pillars but he promptly reminded everyone that these are just numbers and hopefully the event will surface the realistic scenarios. He enumerated the Strategic Action internationalization, (3) service centers, (4) marketing and ICT skills, (5) human resource development and capability building, and (5) incubator and local SME development. He further elaborated on the ASEAN report particularly on SMEs which are the creation and launching of the SME Advisory Board, the SME Innovation Awards, the SME Directory, the Innovative SMEs Directory and the SME Policy Index. He also noted the many agreements crafted by ASEAN with other nations known as ASEAN Plus.

Before concluding his remarks, he aptly reminded again the audience of the three basic reasons for this event which are to heighten and deepen understanding on the 2015 ASEAN Integration, to clearly understand where SMEs are and to craft practical and realizable solutions for Philippine SMEs.

KEYNOTE ADDRESS: CHALLENGES AND OPPORTUNITIES OF THE 2015 ASEAN INTEGRATION

Hon. Alfredo E. Pascual President, University of the Philippines The president bid everyone a blessed morning. He expressed his joy in sharing his thoughts and advocacies in gearing UP in the 21st century.

He likened the ASEAN Integration with the paradigm of his leadership which is to have “One UP, One University”. He said that he is currently shepherding the UP constituents similar to ASEAN “One Vision, One Identity and One Community.” He cited two strategies in achieving that namely: through academic and solely the National University and one that assumes leadership in the country and the fountainhead of innovation. ranking of UP among ASEAN universities. But he lamented the fact that among its ASEAN neighbors, UP is lower than 2 universities in Singapore, 3 universities in Malaysia and 2 universities in Thailand. UP is the 8th among ASEAN universities in the 100 ranking of schools. Meanwhile, Japan has th

tere_1_for print.indd 87

3/13/14 4:41 PM

88

|Philippine Journal on Innovation & Entrepreneurship |

He said that UP is like the ASEAN having many constituents in over 16 campuses all over the country. The goal is for UP to make it in the top ten among various stakeholders are also gathering together to make Philippine universities competitive. He noted that attention be given to human capital. While it is true that Filipino graduates get jobs, these graduates are underemployed being not fully prepared like their counterparts. This, he said, prompted the government unlike its ASEAN counterparts. In the 2015 ASEAN Integration, there will be free movement of human capital hence the need to upgrade the academe sector similar with how SMEs need to shape up for the integration.

The president continued by saying that the integration is a systemic process always fraught with a myriad of opportunities and challenges. The ASEAN

ability to globally compete but will strengthen its strong foundation for closer collaboration among the 10 member states. It aspires to enlarge the ASEAN market and production base by removing all trade barriers. With AEC, business networks will be strengthened to build growth and prosperity in the ASEAN region. It will enlarge opportunities for everyone. The other three pillars of the ASEAN Economic Community (AEC) 2015 aim to convert the growth potentials of the region into a integrated into the global economy. Clearly, AEC 2015 should be a boon to all member states of ASEAN provided we do the necessary preparation.

But he cautioned that there are several challenges for the Philippines as it confronts the realities of AEC 2015. The biggest challenge is how to improve the abilities and capacities to systematically compete. The global competitiveness scorecards still show the Philippines trailing our ASEAN neighbors. The Philippines th is the 6th out of 5 in th of 9 in the 2012 World Bank IFC Ease of Doing Business, 6th th th of th of 8 in the 2012 Future Brand th

6 of 10 in ASEAN with respect to investment attractiveness. th

constraints, he went further on. Assistance in participating in trade fairs and business missions to ASEAN countries were surfaced as an area for improvement.

Other challenges are in the area of improving productivity, standards and

tere_1_for print.indd 88

3/13/14 4:41 PM

89

conformance. The president also noted the challenges in the mutual recognition arrangement of good manufacturing practices, movement of skilled labor, and mutual recognition arrangement for eight professional services – engineering, architecture, nursing, surveying and accounting services, tourism professionals, medical professionals, and dental professionals. acknowledged the need to sharpen the climate change resiliency strategies.

Improving connectivity and focused technology innovation are needed to boost productivity in both industry, services and most especially in the priority sectors of ASEAN and in food security. Intellectual Property is also a major concern.

He then encouraged everyone to widen and deepen the understanding of the key issues on how we can strengthen our game plan for the 2015 ASEAN integration by putting many initiatives, programs, and projects in place and pooling and creating the most synergistic partnerships and collaboration among the key stakeholders .

He stressed that the clarion call is for all of us – industry, government and academe to collaborate effectively, connect with our target markets, conform to standards and processes and compete sustainably .

In conclusion, he congratulated the organizers – UP ISSI, the Bureau of Micro, Small and Medium Enterprises Development (BMSMED) and the Small Enterprises and Development Foundation, Inc (SERDEF) for organizing this Burning SME Issues and Solution interaction Roundtable Discussion which he truly believes will contribute in sharpening and focusing the efforts and initiatives in addressing the challenges of ASEAN 2015 Integration and making productive exchange of ideas.

GEARING UP SMES FOR ASEAN ECONOMIC COMMUNITY 2015 Dr. Rafaelita M. Aldaba Vice President Philippine Institute for Development Studies

Manufacturing Roadmap. economy. Considered as an important segment of ASEAN economies and growth driver in many countries, she said that, MSMEs constitute the bulk of enterprises,

tere_1_for print.indd 89

3/13/14 4:41 PM

90

|Philippine Journal on Innovation & Entrepreneurship |

mostly comprising more than 99% of all enterprises, employ more than 60% of the workforce and contribute to exports from 16% to 31% in ASEAN. She then charted the structure of Philippine enterprises as follows: MSMEs: 99.6% of total – Wholesale & retail: 50% – Manufacturing: 15% – Hotels & restaurants: 12% Micro: 1-9 workers – 52% wholesale & retail Small: 10-99 workers – 30% wholesale & retail Medium: 100-199 workers – 31% manufacturing Large: 200 & up workers – 36% manufacturing She noted too the employment contribution and value-added contribution of these SMEs as follows: Employment: 62% SMEs: 22% mfg, 23 wholesale & retail Value Added: 35% Micro: 35% wholesale & retail Small: 20% wholesale & retail, 19% mfg Large: 40.4% mfg After making a comparative table of constraints to SMEs, she went further by noting the constraints particular to Philippine SMEs as follows: Constraints

Indonesia

Philippines

Vietnam

Cambodia

Laos

Thailand

Raw materials Finance Technology and Skills Infrastructure environment

She further noted the constraints to Philippine SMEs which include (1) private banks to lend to SMEs and focus of government lending programs on

tere_1_for print.indd 90

3/13/14 4:41 PM

91

availability of inputs and supply chain problems due to problems in getting sources of and transporting of raw materials.

The banks, on the other hand, are concerned with the mSMEs bankability, the high risks and high costs involved in lending to them which in turn compels them to provide a limited credit of P150,000-P5M. She gave lending programs as examples and noted that there is lending She provided data taken from a survey among SMEs and listed increasing competition as the greatest constraint followed by rising business cost, instability regulations, management capacity, insurance premiums and environmental crises. from personal savings of business, then from retained earnings, trade credit owing to suppliers, commercial or personal loans, micro-credit, loans from employees, leasing and last resorted to is from credit through government lending. The list of from friends or relatives, commercial or personal loans, retained earnings, trade credit owing to suppliers, leasing, credit through government lending and microcredit.

business, poor business plan, age of business and gender of owner as reasons.

As government policy responses, virtually all developing countries assist technology extension services, marketing assistance, and business development services. She noted Indonesia’s Credit for People’s Business, Malaysia’s Small and Medium Industries Development Corporation Matching Grants, Singapore’s Start-up Enterprise Development Scheme, and Thailand’s Financial Promotion Programs.

Most governments also provide technology extension services, trainings, testing facilities, tool rooms and trade fairs. Some best practices include Malaysia’s 3rd Industrial Master Plan, Singapore’s Technology Innovation Program Local Enterprise Trade Advisory Scheme, Thailand’s Network for Promoting Innovation and Commercialization, China’s National Medium and Long-term Plan for Science Technology Development, and Taiwan’s Heavenly Dragons 8 Steps Project.

tere_1_for print.indd 91

3/13/14 4:41 PM

92

|Philippine Journal on Innovation & Entrepreneurship |

The Philippine government has also implemented similar programs (1) to

BMBE Act and the OTOP. In connection with the ASEAN integration, Dr. Aldaba noted opportunities and challenges. She mentioned that international and regional production networks have driven growth in the region. Philippine SMEs can become potential suppliers of outsourced parts and services and can provide links to exports in auto, machineries, electronics and garments. The ASEAN with an estimated population of 600+ million aims to have a single market and production base hence actions and interventions must be informed by the ASEAN Policy Blueprint for SME Development 2004-2014 enumerating access to information, market, human She then proposed a three-phase structural roadmap for structural strengthen emerging industries, and maintain competitiveness of comparativeadvantage industries. Phase II (2018-2021) is to shift to high value-added activities and investments in upstream industries and link and integrate industries. Phase III (2022-2025) is to participate as hubs in the global and regional networks for automotive, machinery, garments and food industries.

To achieve, however, 15% employment and 30% value-added products and services, she cited coordination mechanism and integration of horizontal (investment measures, power, logistics and infrastructure) and vertical measures (closing of supply chain gaps, expansion of domestic market and exports, improvement of HRD and skills, SME development, technology upgrading, innovation, and use of common facilities.

In addition to the above-mentioned strategic actions, she also noted some complementary measures like open trade regime, sustainable macro policies, rights, institutions that promote adaptive research and patent regime, and access

tere_1_for print.indd 92

3/13/14 4:41 PM

93

WHAT IS OUR LEVEL OF AWARENESS AND ENGAGEMENT FOR THE ASEAN INTEGRATION? Mr. Junie del Mundo Chair Committee on ASEAN Integration Management Association of the Philippines Mr. del Mundo began his talk by citing that he was wearing two hats for the occasion: (1) as Chair of the ASEAN Integration Committee under the Management Association of the Philippines, and (2) as a communication and public relations practitioner, having established and led EON, a Stakeholder Relations Firm, since 1998.

He recalled that when he was appointed as Chairman of the MAP ASEAN Integration Committee, his concerns were centered on the business community’s low level, if not lack of, awareness on the AEC hence, together with the strong support of the Philippine-ASEAN Business Advisory Council (Phil-ABAC) and the MAP Board of Directors, the ASEAN Integration Committee decided to conduct a series of forums on the AEC which was dubbed as the AEC Exchange.

He then provided an overview of the ASEAN Integration which he said would (1) help address ASEAN countries’ individual disadvantages compared to trade in goods or services) creating large potential economic impact to all and knowledge transfer and promote peer learning.

The AEC aims for the economic integration of the 10 ASEAN member states. The four pillars of this vision expected to be realized on 31 December 2015 are: (1) single market and production base – where we intend to capitalize on the economic region – where we are looking at strengthening ASEAN’s competition policy, intellectual property rights, consumer protection initiatives, infrastructure, the SME sector and bridge the gaps between the economically-developed ASEAN (4) integration into the global economy – where we solidify our efforts to build relations with trade and investment partner-countries such as, among others,

and strengthen the company’s brand and the Philippine country brand.

tere_1_for print.indd 93

3/13/14 4:41 PM

94

|Philippine Journal on Innovation & Entrepreneurship |

And the Philippine brand, he claimed, lies in the Filipino. He then cites

energy exuded by our people, and (4) CREATIVE evident in the designs and the craftsmanship that the people of Cebu are known for.

He concludes that in sum, it is politics, policies and real innovation touching on tourism, culture and heritage, people, trade and investment, public diplomacy that would give us the sum total of experiences that will make up the country brand.

He insisted that the Philippines needs to differentiate itself from the rest of ASEAN to be able to compete and cooperate in the broader ASEAN. Why should an investor come to the Philippines and not choose any of the 9 other ASEAN member states? But even if he ruefully stated that we don’t have the answer to this brand, he still hopefully mentioned that we will have one before 2015.

ADVANTAGE OF THE BENEFITS THAT AEC WILL BRING TO THE US? While the initial reaction may be fear or panic, he illustrated what he did as a businessman which SME owners can somehow emulate. This is what he calls the ABC of EON. (1) AUDIT YOUR ENVIRONMENT - Understand the threats and

business mapping. Identify PARTNERS you can do business with.

your company’s image and reputation as credible players in the region through

(3) COMMUNICATE - Reexamine all the communication channels you

traditional and non traditional media like social media.

He gave so many examples of successful branding campaigns. He cited brand communication.

tere_1_for print.indd 94

3/13/14 4:41 PM

95

He concluded by saying that the AEC is happening whether we like it or not. Country-level commitments have been made, the ground work has been done. He cited the former ASEAN Secretary General Dr. Surin Pitsuwan saying “…the road to economic community is still a long one, with bumps and challenges along the way... However, I am certain that by 2015 the very foundations of the the importance of the private sector players, industry groups, and individual companies’ preparation for it.

WHAT ARE THE CRITICAL SUCCESS FACTORS AND INHIBITORS FOR THE 2015 ASEAN INTEGRATION? Mr. Sergio Ortiz-Luis, Jr. President Philippine Exporters Confederation, Inc. Mr. Ortiz-Luis zeroed in on exporters becoming ready for the ASEAN integration which topic, he jokingly claimed, was already covered by Dr. Aldaba.

He also congratulated Mr. Del Mundo for his company’s having won a prestigious award in the region recently.

He provided an overview of the PhilExport. He informed everyone that the He cited the improving performance of the association within the context of the Philippine Export Development Plan. higher the value chain, maximizing free trade agreements, integrating tourism in The ASEAN market, he said, accounts for 20% of the export. The ASEAN market, too, is a great source of raw materials. He said that indigenous materials can be harnessed while maximizing the creativity of Filipinos.

He emphasized the importance of road maps attuned to market realities that are sustained in the long run. He also noted the programs that seek to improve He said that the likely winners are the electronics and semiconductors, automotive and machineries, and consumer goods like garments and agricultural products.

Part of the EDC agenda include facilitating a competitive currency,

tere_1_for print.indd 95

3/13/14 4:41 PM

96

|Philippine Journal on Innovation & Entrepreneurship |

fasttracking infrastructure projects, institutionalization of the export fund, and completion of reforms of the BOC (computerization, approval of bill on competition law, etc.).

He was optimistic in the resolution of the issue on the Cabotage Law. He showed great hope also in the Trade-Related Technical Agreement by the European Union which he said would greatly accelerate export in the EU. He, however, called for stronger relationships and linkages among complementary industry associations. He also called for the liberalization of air, water, and land transportation across borders to facilitate regional trade.

He cited the World Investment Report saying Philippines is lagging behind Vietnam in terms of foreign direct investment. This performance however

Urgent reforms are thus necessary, he said. Priority bills are pending amendment of the charters of the BSP, Philippine Port Authority, and Laguna Lake Development Authority, the Cabotage Law, among others.

HOW DO WE REINVENT AND INNOVATE ACCESS TO FINANCE FOR SMES? Mr. Benel P. Lagua Development Bank of the Philippines Industrial Guarantee and Loan Fund

the large companies are getting.

He then enumerated the reasons for this discrepancy as follows: (1) information providers in the marketplace, higher costs of obtaining (2)

tere_1_for print.indd 96

3/13/14 4:41 PM

97

technology and skills to process SME loans (3) more likely to default, more vulnerable to market changes, limited annual closure rate is above 20% in most countries and imperfections in collateral markets He presented the estimates of unmet demand in various studies: (1)

He also noted that the overall compliance of the banking sector with the Mandatory Credit under the Magna Carta for MSMEs is only 5.34% for micro/ sector loan portfolio increased by 154.9% from 2001 to 2012, the micro/small loan portfolio increased by 30.05%, and the medium loan portfolio increased Enterprise Portfolio and 6 in the Medium Enterprise Portfolio.

The graph below more succinctly states his point: 2001

4th Qtr 2012

Increase (in Php Billion)

Percentage Increase

Total Net Loan Portfolio

992.24

3,522.29

2,530.05

154.98

Total Direct mSE Loans

144.18

187.92

43.74

30.05

87.75

213.89

126.14

143.75

929 854 75 26

No available data from BSP’s new reporting System

15.64%

5.34%

9.43%

6.07%

No. of Operating Banks No. of Reporting Banks No. of Non-reporting Banks No. of Non-complying Banks mSE Compliance Rate (vs 8.0% requirement) (vs 2.0% requirement)

The challenges are thus surfaced as follows: (1) processing time of loan applications.

(2) The interest rate charged is very high.

(3) period restrictive.

tere_1_for print.indd 97

3/13/14 4:41 PM

98

|Philippine Journal on Innovation & Entrepreneurship |

(4) urban areas.

(5) (6) There are no funds available for start-up SMEs in several regions.

(7) SMEs do not have access to venture capital funds.

(8) SMEs have limited access to information regarding the sources of funds and on how to access these.

(9) Banks have not been responsive to SME needs.

(10) Banks need to revisit and retool to meet SME needs. doing its best to respond to all of this through a convergence of assistance in the forms of risk-based lending and credit scoring, capacity building for SME lending

MSMES AND INCLUSIVE GROWTH Dr. Ronald U. Mendoza Policy Center Executive Director and Associate Professor of Economics Asian Institute of Management Dr. Mendoza prepared slides answering: (1) Do MSMEs hold the key to inclusive growth? (2) Can they help countries break free from the middle income country trap? (3) What are the challenges faced by MSMEs in the Philippines? (4) What role can internationalization play and what are the challenges to increased internationalization?

Doing away with most of his slides, he went on with his informal talk and code-switched in Filipino to illustrate his points to the rapt and appreciative audience. like Mr. Del Mundo’s. Many SMEs are not as competitive. But, he surmised, the challenges may not turn out to be competing against ASEAN counterparts. These challenges can be in the form of unpaved roads and corrupt LGUs. These challenges may be in the environment. the Ease of Doing Business survey among ASEAN countries. He lamented the sorry

In the 2012 AIM-ADB Survey, these adjustments or resilience measures

tere_1_for print.indd 98

3/13/14 4:41 PM

99

include postponement of tax payment, postponement of payment for services, bonuses, sold some assets or amenities, invited an investor, shifted to cheaper brands, borrowed funds from relatives / friends, discontinued/closed some

products / services, asked suppliers for credits on transactions and reduced R&D spending.

In terms of internationalization, he cited a study by Harvie, Narjoko and Oum in 2012. SMEs were grouped into whether they are part of production networks or not. These SMEs were assessed as to size, age, share of foreign ownership, skill intensity and labor productivity. They were also surveyed as to whether they complied with ISO standards, established new divisions or plants, bought new machinery or improve existing machinery, introduced new know-how production method or product, introduced ICT and got involved in networking activities.

He ended his talk saying that the greatest asset of the Philippines is the people, the soft power of the country on whom entrepreneurship can be encouraged.

Entrepreneurship, according to Dr. Mendoza, is what keeps the people here and what will make them contribute more to the country. The new hero, he said, is not the OFW but the Filipino entrepreneur.

HOW DO WE IMPROVE TECHNOLOGY AND PRODUCTION EFFICIENCY OF SMES FOR THE 2015 ASEAN INTEGRATION? Dr. Carol M. Yorobe Undersecretary for Regional Operations Department of Science and Technology Dr. Yorobe stated that the Department is very much aware of the integration. But she said that the goal should be to make Filipinos not just as buyers but more importantly, as suppliers.

by DOST. She informed the audience not only of the absence of interest in the three years otherwise a penalty fee is imposed. which include full ownership by Filipinos. There must also be a technological need

tere_1_for print.indd 99

3/13/14 4:41 PM

100

|Philippine Journal on Innovation & Entrepreneurship |

recently with DBP to provide technological assistance and capitalization to owner must also present a proposal which will be evaluated.

conduct of trainings. Other SME interventions, she cited, include energy audit, cleaner production energy, food manufacturing practices and agricultural consultancy services through experts in the industry and experts from the academe, research and development sectors.

She also gave an overview of the SETUP project since its inception to the current year. SETUP is DOST’s initiative to gear up SMEs for the ASEAN integration. The project, she said, already addresses the needs of the industry and in employment.

Aside from these efforts, DOST also conducts benchmarking among the behind. can be visited by SMEs if they have a need that can be addressed by DOST. In sum, she stated that, the assistance that DOST provides altogether aims to make SMEs competitive through technology intervention.

WHAT PRODUCTS HAVE ZERO TARIFFS AND HOW COMPETITIVE ARE WE WITH THEM VERSUS OUR ASEAN NEIGHBORS? Ms. Ma. Lourdes M. Saluta Chief Tariff Specialist Tariff Commission

ASEAN Trade in Goods Agreement (ATIGA) as follows: No. of 2012 AHTN Lines

Share to Total

Products Covered

With zero tariff

9,685

98.63%

All except those listed below

With 5% tariff

74

0.75%

Products Category Inclusion List:

tere_1_for print.indd 100

3/13/14 4:41 PM

101

Special Consideration for Rice and Sugar

35

0.36%

Rice: 2013-2014 - 40%, 2015- 35%; Sugar: 2013 -18%, 2014 -10%, 2015-5% Arms and ammunition

Exclusion List

26

0.26%

Total

9,820

100.00%

She also informed the audience of the different Free Trade Agreements by 2015.

2015 Rates of Duties

Percentage Share ACFTA

AKFAT

AANZFTA

AIFTA

AJCEPA

Timeframe

2010

2010

2013

2018

2018

0

86.84

88.09

92.89

3.47

67.12

0.75-5

3.43

0.51

1.90

57.17

24.15

5.25 - 15

4.10

3.77

4.83

23.11

4.01

15.36-25

3.17

3.87

0.05

0.88

1.59

25.18 UP

2.05

-

0.41

1.12

0.76

HSL

0.01

3.35

-

-

-

GE/EL

0.40

0.39

1.00

14.24

2.43

TOTAL

100.00

100.00

100.00

100.00

100.00

She listed all the existing FTAs in the Philippines.

FTA

Implementing EOs

TIG Agreement Signed

ATIGA (AFTA-CEPT )

850

26 Feb. 2009

Entry Into Force

ACFTA

485, 487, 613, 618, 814, 71, 72

26 Nov. 2004

2006

AKFTA

638, 639, 812, 73,74

24 Aug. 2007

01 Jan. 2008

PJEPA

767, 905

09 Sept. 2006

2008

Jan. 2010)

AJCEPA

852

14 April 2008

July 2010

AANZFTA

851

19 Feb. 2009

01 Jan. 2010

AIFTA

25

13 Aug. 2009

She then presented the next steps. For the government, she recommended for the completion of the tariff reduction schedule to 0-5% for IL products in CLMV countries, the elimination of non-tariff barriers, continuous reform, enhancement customs integration and customs development to operationalize the ASEAN Single Window.

For the SMEs, on the other hand, she recommended for the awareness

tere_1_for print.indd 101

3/13/14 4:41 PM

102

|Philippine Journal on Innovation & Entrepreneurship |

of consultations with various government agencies and the availment of the advantages of all the institutional and informal channels to proactively participate in decision-making process.

HOW DO WE ENGAGE THE LGUs FOR THE 2015 ASEAN INTEGRATION? Mr. Dennis D. Villase単or Provincial Director Department of Interior and Local Government Mr. Villase単or tackled the engagement of the LGUs for the 2015 ASEAN Integration. He noted the mandate of the DILG which is to capacitate the LGUs for SME development.

Overwhelming outcomes expected of the LGUs, he mentioned, are to make the respective LGUs business friendly and to ensure that the enabling actions of the LGUs are effective. Crucial among the projects to achieve these outcomes is improving the transactional process. The DILG has partnered with other agencies in has covered 1000 LGUs. It has also initiated the computerization of the process.

He showcased the Seal of Good Housekeeping project of the department.

He enumerated the different efforts of the department in making the business

He also noted the alliances among local government units and LGUs with the academe and other stakeholders which have spurred local development.

2015 ASEAN INTEGRATION ACTION POINTS FOR SMES Mr. Jerry T. Clavesillas Director DTI Bureau of Micro, Small, and Medium Enterprises Development Director Clavesillas started by saying that after all the presentations it is imperative that we chart where we are going. He noted the MSMED Development framework and its overall objective which is to generate employment.

He said that inclusive growth can be manifested if all is included starting

tere_1_for print.indd 102

3/13/14 4:41 PM

103

from the base of the pyramid. All interventions must therefore cascade to the lowest level if not spring from below. Efforts must also be towards increasing the gross value of the MSMEs through three focus industries like tourism, agriculture The presentations, he said, cited best practices, but the target must be are varying differences within a particular sector. environment to achieve the overarching objective of increasing employment. He talked about the BMBE law which does not have enough incentives. The BMBE law exempts entrepreneurs from national taxes and not from local taxes. There to register to obtain exemption. But he cautioned everyone in blaming the DILG because according to him, the LGUs only implement what the national government has mandated.

There are many entrepreneurs, he claimed, who are successful and yet decisively remain in the micro level. So the answer or strategy seems to be in clustering them so that these successful micro entrepreneurs can still be part of the value chain. He also talked about the Magna Carta wherein an allocation for SMEs is mandated. These examples he cited are the pressing matters that must be an agency which is after revenue generation. Hence, the various sectors must be involved to make SMEs. project of DOST among others. The third area is the market. There must be an alignment with the value chain. SMEs must connect with the global and regional

In conclusion, he inspired the audience to contribute towards the aim of the ASEAN integration. He said that everyone can do something beyond just citing other governments and statistics. He encouraged the members of the audience to make their recommendations known. He concluded by saying that the major activity of the Department is more on information dissemination now.

While he said that occasions and activities like the present event have been done many times over, he said that there is always an entrant in the SME environment. So the take-off point is really to leave something for the next generation.

tere_1_for print.indd 103

3/13/14 4:41 PM

104

|Philippine Journal on Innovation & Entrepreneurship |

He lauded the presence of DTI personnel among the audience and the possible.

WHAT HAVE WE LEARNED: SUMMARY AND SYNTHESIS Prof. Nestor O. Ra単eses Director UP Institute for Small-Scale Industries targets include 2 million jobs created and 40% value added. For 2013, the expected investment is 91,988 M pesos, the exports are expected to be 636 M dollars, domestic sales should reach 153,888 M pesos and MSMEs should number around 188,160.

He noted the big push for SMEs using the cluster-based development strategy which includes the product development and market like the Philippine Traceability for Revitalized Agriculture Competitiveness Enhancement (PTRACE), 26 shared service facilities, micro-enterprise development through the RuMEPP and LRED projects and the industry clustering project like the National Industry credit amortization through the ASENSO project or Access to Small Enterprise of Sound Lending Opportunities.

He also mentioned that the task is not just the task of DTI but the cooperation and collaboration of different agencies like the DA, DENR, DOT, DOST, DAR, CHED, DEPED, DSWD, DOLE, TESDA, DOH, DILG, NAPC, and CDA. He noted that the ASEAN 2015 is fast approaching hence the need to focus amid the varieties of activities being done and conducted. He said that all interventions must be analyzed in terms of impact. He said that all actions must be synergized. Legislations must be enabling so it is high time to revisit the competition and trust law, the customs and tariff act, the Cabotage law, the export laws, among others. He also emphasized the need to build resilience of SMEs especially in facing climate change. He encouraged everyone from the government, academe and industry to participate in this endeavour. He concluded by thanking everyone who attended the event.

tere_1_for print.indd 104

3/13/14 4:41 PM

105

THE VOICE OF THE STAKEHOLDERS: QUESTIONS AND INSIGHTS FROM THE AUDIENCE I come from an NGO interested in conducting training programs and seminars for LGU personnel to enhance their capacities. What is required by DTI on this matter? lowered?

What do you mean by high value-added activity in upstream industries?

Please give an example of upstream industries. concerns?

Kindly elaborate on the RA 9178? Is this being promoted all over the country?

What do you think is the reason for the low number of registrants of BMBEs considering that we have 99.6% of the business in the MSME sector? What is the implication of the low turnout? program for UP Academicians turned entrepreneurs or innovators who will put up a start-up/spin-off companies which will make produce services generated from research. Can DBP consider an equity swap funding assistance? Jane Ann Gonzales of BSP answered that BSP conceptualized the CSF to make MSMEs bankable.

Strengthen industry academe linkage through the network of innovation and Branding is important.

Please make the MSME development plan and export development plan available at the DTI website.

Marketing SME products is not an expertise of SMEs maybe the government can help them with this.

It is unclear what the contribution of MSMEs to GUA that is why Dr. Aldaba of establishments but this does not refer only to MSMEs. What are the common challenges for a new service company to enter the arena of globalization?

tere_1_for print.indd 105

3/13/14 4:41 PM

106

|Philippine Journal on Innovation & Entrepreneurship |

We didn’t touch on promoting competitiveness among cooperatives, mutual help. Let’s discuss further this idea. It might give us some clues in solving the problems of poverty and underdevelopment of our country. Eulogio Castillo, administrator of CDA What steps has the department undertaken to make LGUs business permit processes in sync with some national govt units like in issuing business licenses. Right now, requirements somehow are too belaboring on small details making business applicants susceptible to corruption.

How will the agencies help the producers like organic farmers gain place in the coming ASEAN integration?

What agencies should producers get in touch with to market their goods or make their goods value added as mentioned Daniel Vincent Catabay, FLOFA member The problem lies in the execution. The concerned MSMEs are not given comprehensive information about things.

For seminars like this, we must invite more SMEs. Excellent line-up of topics and speakers.

Interesting and relevant topics but only a handful of SME participants.

Please include IPR in the topics.

I had a better grasp of both the government and private groups’ initiatives on AEC 2015.

Great. Perfect.

Info-overload but very good topics. ASEAN integration is scary but this is a challenge for us.

Topics presented were very helpful and informative.

Include cooperatives as a strategy in promoting SMEs. Can this be brought down to the level of barangays and even indigenous people? discussion could have ensued. dissemination, better involve media, SMEs should be educated on this contact us should you think we can help you in any way.

tere_1_for print.indd 106

3/13/14 4:41 PM

107

Please continue spearheading similar activities. There should be more interaction with the speakers.

Please post all presentations to the UP ISSI website.

Please provide contact number or email in the invitation letter.

More ISSI staff participation for professional development, fewer speakers or more time.

Too many topics in one day.

More a for like this as we approach 2015.

Conduct a mini-RTD or FGD where various SMEs can be invited.

Del Mundo’s, Aldaba’s and Mendoza’s were eye-openers. Please provide their contact numbers so we can invite them in our events.

More forum for SME development.

Good job. :) I gained understanding or awareness on the current state of SMEs. More time to accommodate participants’ questions and concerns. Thank you.

Relevant to my organization.

There must be impact evaluation as discussed by Dr. Mendoza. Please include IPR’s role.

TESDA should be more proactive and responsive.

Congratulations to the organizers. Topics were well-presented and discussed. More meaningful discussions to come.

I learned about the progress on the integration and the efforts of agencies for the integration.

Sessions are very informative.

It is important to have country branding.

More tourism-related SME info/success stories.

Investment is important for SMEs. The Philippine SMEs are in need of government assistance.

The participants actively participated and the speakers more than

tere_1_for print.indd 107

3/13/14 4:41 PM

108

|Philippine Journal on Innovation & Entrepreneurship |

answered their queries.

Please invite me again.

I learned about the fundamentals of SMEs, integration, and branding.

Better set-up for chairs and desks; control temperature.

Very informative especially the explanation about the roles of the different government agencies.

I learned about the convergence of government efforts and initiatives.

We should get our acts together to succeed.

The topics were all very informative and should be disseminated to more SMEs. I learned about helpful programs for SMEs. The speakers should have spoken in Filipino. More presentation on how SMEs can be competitive.

Some of the attendees are locals so speakers could have used Tagalog.

The side monitors did not serve their purpose, they were covered by the heads of the participants. Ang bagong bayani ay ang entrepreneur.

More discussions on SMEs. The presentation of the tariff commission rep is very shocking. She made us realize that the tariff negotiation is out of the table and is already being the AEC 2015.

ALPHABETICAL LIST OF DELEGATES Abanto, Melvin Abrera, Rosalie B., OPR DTI, Analyst Aguilar, Jonathan Carl S., Export Development Council, Agustin, Ma. Theresa A. Alconera, Lucila M., ITDI-DOST Aldana, Myleen V., DTI Andayon, Julie V., Project Coordinator Antonio, Catherine R. Arcega, Maria Concepcion M. Areola, Eunice Mareth Q. Aumentado, Virginia F., IPRSV, IPOPHL Bagaman, Ma. Teresa Belga, Marie Edraline Bobadilla, Ana Bonoan, Fenina M., DTI BETP Bueno, Rosulo N., Director, Internal Audit Service, Department of Tourism Candelaria, Cristina B., Senior Research Specialist, ITDI-DOST

tere_1_for print.indd 108

3/13/14 4:41 PM

109

Carpio, Ma. Juanita P., PAO STIDS Castillo, Eulogio T., Administrator, Cooperative Development Authority Catabay, Daniel Vincent L.,FLOFA Chan, Theresa Marie N., Senior Research Specialist, ITDI-DOST Co, Myrna R., SERDEF Crismundo, Kris M. Cualteros, Norman E., LSO, de Guzman, Ines A., HEED Department, de Vera, Ian Jester M., UP ISSI De los Santos, Ephraim N., Consultant Domondon, May Esguerra, Merceditas A., UP ISSI Esmane, Janice E., Department of Tourism Fajardo, Herminia R., SERDEF Faminialagao, Jan Carl Floro, Francisco R. Fojas, Juliet R., Institute of Labor Studies, Department of Labor and Francisco, Melody G. Francisco, Jed M. Fraxidio, Jr. Jaime C., Business Manager, Union Bank Gabuya, Restituto Felipe R., DOST MIRDC Garcia, Rosemarie G., Food and Nutrition Research Institute, Department of Science and Technology Garcia, Edgar I., TAPI Director Go, Alexander T. Gonzales, Gregorio M., FLOFA member Gonzales, Jane Ann S., Bangko Sentral ng Pilipinas Gonzalez, Nelia T. Gonzalo, Richard Philip A., UP ATI Guce, Gregoria M., Department of Agriculture ACPC Gumasing, Jeffrey F., STIDS, Igusim, Louie Lagcao, Kim S., Division Chief, NWPC Lee, Ma. Luisa S., UP ISSI Leonardo, Nicolas M., FLOFA member Lim, Ma. Amelou E., IPRS V, IPOPHIL Lopez, Emma Lina F. Lopez, Joy Valerie L. Macas, Irene L., Senior TESD Specialist, Magsino, Ma. Veronica F. Manalad, Maria Elena A., Executive Director Mariano, Vicente D., UP NCPAG Mijares, Emmarita Z. Morandarte, Melchor C., Chair, Malayon Natividad, Paul Jan Patrick P. Navo, Nova Negre, Florenda G. Omila, Anne Daisy T., DTI BPS Ope単a, Alice M.

tere_1_for print.indd 109

3/13/14 4:41 PM

110

|Philippine Journal on Innovation & Entrepreneurship |

Ortiz, Alexis M., FNR1-DOST Pajarillo, Ma. Elenita I., TOO II, Department of Tourism Pati-on, Vicente T., General Manager, McBride Corporation Perez, Edward Pobre, Ma. Jocelyn Q. Pojas, Helen M., UAE II Provido, Jeff Pulumbarit, Elizabeth R., Legal Counsel, UP TTBDO Ragma, Jennifer, Senior Tariff Specialist, Tariff Commission Recio, Gloria S. Rodrigo, Cristina F., CITEM Rodriguez, Joel S., Philippine Institute of Trade and Commerce Rodriguez, Sonia L. Sabat, Eduardo G. Salazar, Irene, DMO II, Department of Finance Saluta, Ma. Lourdes M. Sison, Florencio G., CMDF, DTI-DED Tabinas, Jason G., Technical Staff, DAP Tadeo, Ray, ECOP Talladen, Neva, Secretary, Nationwide Association of Consumers, Inc., Valdeavilla, Sonia T., CIAP-POCB Valle, Divino Seer P. Villacrusis, Maria Luna “Pinky� Z., M&S Manager Villarica, Ald Villasenor, Dennis D., DILG Villaviray, Aurora Luz D., DMO V, DOF Wong, Douglas ABOUT THE SPEAKERS Dr. Rafaelita M. Aldaba is a senior research fellow and acting vice president of the Philippine Institute for Development Studies. From 2008 to 2009, she served as Team Leader of Asian Development Bank-Asia Regional Integration Center. She has extensive research experience covering development issues on competition policy, trade and industrial policy, regional integration, small and

Institute of World Economics in Germany and obtained PhD in Economics at the University of the Philippines.

Mr. Jerry T. Clavesillas is the Director of the DTI Bureau of Micro, Small, and Medium Enterprises Development.

Mr. Junie del Mundo is the Chair of the Committee on ASEAN Integration Management Association of the Philippines and the Chairman and CEO of EON The Stakeholder Relations Firm. He founded EON in 1998 believing that communications has the power to harmonize stakeholders and enable positive change in society. Fourteen years after, EON is now regarded as one of

tere_1_for print.indd 110

3/13/14 4:41 PM

111

in the Philippines representing some of the top brands in the country including Shell, McDonald’s, Nestle, Visa International, AES Power, Lafarge, Diageo, Sony, Mr. Benel P. Lagua is the Executive Vice President and Chief of the Development Bank of the Philippines and the Chief Dr. Ronald U. Mendoza is the Policy Center Executive Director and concurrently an Associate Professor of Economics of the Asian Institute of Management. He is a senior economist with extensive research and experience the Executive Director of the Asian Institute of Management Policy Center. He joined AIM in January 2011, and is core faculty of the Center for Development Management. He concurrently serves as the Executive Director of the AIM Policy Center. He obtained his MA and PhD in Economics from Fordham University, School of Government, Harvard University and his Bachelor’s Degree in Economics Honors (Eco-H), Ateneo de Manila University.

Mr. Sergio Ortiz-Luis, Jr. is concurrently Honorary Chairman of the Philippine Chamber of Commerce and Industry (PCCI), Chairman of the Board of Advisers of Philippines, Inc. and Vice Chairman of the Export Development Council and Philippine Small and Medium Enterprises Development (PHILSMED). He also sits as Chairman of Integrated Concepts and Solutions, Inc. and serves as directors of various companies such as Capital Consortium, Inc., Makati Medical Center, and Waterfront Philippines, Inc., among others. In the EDC, he is likewise the Chairman of the Networking Committee on Finance. He also used to be a Commissioner of the Social Security System (SSS) and Director of the Employees Compensation Commission (ECC) and a recipient of the Presidential Merit Award degree in Liberal Arts 1964, a post graduate of Bachelor of Science-Commerce major in Finance and Business Administration in 1965 and Masters in Business University.

Hon. Alfredo E. Pascual is the 20th President of the University of the Philippines. Before assuming the position, he was an Alumni Regent in the Board non-faculty member to become the University of the Philippines President.

Prof. Nestor O. Raneses is the Director of the UP Institute for SmallScale Industries and concurrently the Assistant Vice President for Administration of the UP System. He is also an Associate Professor at the Department of Industrial Technology Management Center of UP Diliman.

Ms. Ma. Lourdes M. Saluta is the Chief Tariff Specialist of the involved in the conduct of studies, investigative analysis in bilateral, plurilateral,

tere_1_for print.indd 111

3/13/14 4:41 PM

112

|Philippine Journal on Innovation & Entrepreneurship |

and multilateral negotiations and other international fora under the Tariff and the formulation of policies pertaining trade and economic matters.

Mr. Dennis D. Villasenor is the Assistant Director of the Bureau of Local Government of the Department of Interior and Local Government.

Dr. Carol M. Yorobe is the Undersecretary for Regional Operations of the Department of Science and Technology.

PICTURES

From left to right: Ms. Crispina B. Almonte, Mr. Benel P. Lagua, Dr. Rafaelita Aldaba, Mr. Sergio Ortiz-Luis, Hon. Alfredo E. Pascual, Dr. Ronald U. Mendoza, Mr. Junie del Mundo, and Director Nestor O. Ra単eses

tere_1_for print.indd 112

3/13/14 4:41 PM

113

UP ISSI Director Nestor O. Ra単eses welcomes everyone to the event.

UP Pres. Alfredo Pascual provides the audience with an inspirational message.

PHILEXPORT Pres. Sergio Luis Ortiz-Luis provides the insight on the ASEAN Integration from the industry sector.

tere_1_for print.indd 113

Mr. Junie del Mundo of the Management Association of the Philippines Committee on the ASEAN Integration tells about the importance of branding and the strategies that business owners can do to be able to compete in the ASEAN 2015.

Dr. Rafaelita Aldaba of PIDS presents the

Mr. Benel Lagua of DBP tells about the DBP strategies and contributions to the ASEAN integration.

3/13/14 4:41 PM

114

|Philippine Journal on Innovation & Entrepreneurship |

Dr. Ronald Mendoza tackles inclusive growth and inspires more among the audience by speaking in Filipino.

Ms. Lourdes Saluta of the Tariff Commission presents the different FTAs.

Mr. Dennis Villase単or talks about the proactive actions of the DILG.

Dr. Carol Yorobe of DOST informs the preparation for the ASEAN integration.

Director Jerry T. Clavesillas of DTI-BMSMED sums up the entire event.

tere_1_for print.indd 114

3/13/14 4:41 PM

PHILIPPINE JOURNAL ON INNOVATION & ENTREPRENEURSHIP Editorial Board EMMA C. FRANCISCO

RUPERTO P. ALONZO Professor, UP School of Economics

, UP TMC

EPICTETUS E. PATALINGHUG Professor, UP College of Business Administration

VIRGEL C. BINGHAY

EDGAR I. GARCIA

Associate Professor, UP School of Labor and Industrial Relations Director, Center for Industry Productivity & Competitiveness

Director, Technology Application and Promotion Institute

NESTOR O. RAÑESES

MIFLORA M. GATCHALIAN

Director, UP ISSI Associate Professor, UP College of Engineering

CEO, Quality Partners Company, Ltd.

EDUARDO Q. CANELA Freelance Consultant, Asian Development Bank

BENUEL P. LAGUA

SERAFIN D. TALISAYON

President and COO, Small Business Corporation

Association of the Philippines

EDNA ESTIFANIA A. CO Dean, UP National College of Public Administration and Governance

SERENIDAD F. LAVADOR Trustee, SERDEF

AIDA L. VELASCO

RAYMUND E. LIBORO Director, Science and Technology Information Institute

Director, Center for Business Research & Development Associate Professor, Decision Sciences & Innovation Department De La Salle University

Undersecretary, Department of Science and Technology Professor, UP College of Engineering

EDUARDO R. MAGTOTO

PATERNO V. VILORIA

Former DOST Undersecretary Trustee, SERDEF

President, SERDEF

HERMINIA R. FAJARDO

IRIS ANN G. MARTINEZ

Vice-President for Development, UP Professor, UP College of Business Administration

MERLY M. CRUZ Undersecretary, Department of Trade and Industry for Regional Operations

FORTUNATO T. DELA PEÑA

Trustee, Small Enterprises Research & Development Foundation (SERDEF)

Associate Professor and Chairperson, UP Department of Industrial Engineering & Operations Research

ELVIRA A. ZAMORA

Issue Editor NESTOR O. RAÑESES Assistant Vice President for Administration, UP Associate Professor, UP Department of Industrial Engineering Director, UP ISSI

The Philippine Journal on Innovation & Entrepreneurship (PJIE) is published semiannually. It is dedicated to the publication of entrepreneurship and technology solutions. It aims to promote a dynamic and enriching exchange of innovative ideas and solutions in creating, developing and improving small and medium enterprises. PJIE contains conceptual, research, and case-based works that can be of practical value to business persons, educators and advocates.

VATION & ENTREPRENEURSHIP tere_1_for print.indd 2

3/13/14 4:41 PM

Call for papers on Innovation & Entrepreneurship Enterprise development Entrepreneurship Education Marketing and customer management Product design and development Technology management Quality management Productivity improvement and management Ergonomics and safety Environment and energy management and green enterprises Innovation management Financial management Human resource management Information management SME policy development The PJIE will accept papers that present original and unpublished work. These papers should not be under evaluation for publication elsewhere.

The target groups for this publication are school and their libraries, industry associations, government and non-government institutions involved in SME development, SME consultants, faculty, students and entrepreneurs.

Please send all submissions to:

Please visit the UP ISSI website http://entrepreneurship.org.ph/ for the complete Guide for Authors.

ISSN 2350-7829

The Editor, Philippine Journal on Innovation & Entrepreneurship (PJIE) Research and Extension Division (RED) UP Institute for Small-Scale Industries E. Virata Hall, UP Campus, Diliman Quezon City, Philippines 1101

Volume I, Number 1: December 2013

We would like to invite you and your colleagues to submit papers or articles that will deal with the application of experiences on SME development and advancement involving the following areas:

PJIE

Philippine Journal on Innovation & Entrepreneurship

PHILIPPINE JOURNAL ON INNOV tere_1_for print.indd 3

3/13/14 4:41 PM