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Keynote message of Secretary Arsenio Balisacan at the APEC Policy Partnership in Science, Technology, and Innovation

PPSTI Boracay Sec. Balisacan

5th APEC Policy Partnership in Science, Technology, and Innovation (PPSTI)

16 May 2015; 10:45 AM

Crown Regency Beach Resort, Boracay, Aklan, Philippines

Arsenio M. Balisacan

Socioeconomic Planning Secretary and NEDA Director-General

Keynote Message

Distinguished officials and members of the PPSTI; delegates of APEC member economies; colleagues from the Philippine government, especially from the Department of Science and Technology led by Secretary Mario Montejo; our partners from the academe and private sector; ladies and gentlemen, good morning!

It gives me great pleasure to be invited to the 5th Meeting of the APEC’s Policy Partnership on Science, Technology, and Innovation (or PPSTI), this year hosted by the Philippines through our Department of Science and Technology. This year’s meeting, with the theme “Science, Technology, and Innovation for Inclusive Growth”, happens to fall squarely with the Philippine government’s policy of putting inclusive growth at the forefront of our national development agenda. The theme also coincides with the exponential growth of interest on inclusive development seen across the world in recent times. For this, we would like to commend the PPSTI for continually engaging various stakeholders in the government, private sector, and academia in regular and wide-reaching discussions that foster innovation and deepen scientific collaboration across APEC member economies.

Indeed, it is difficult to controvert the singular importance of technology and innovation in promoting growth and development. Prominent models of economic growth point to the ability of technological progress to explain a large part of variations in productivity and living standards observed across countries and across time.

The growth of APEC in particular has benefited largely from technological progress over the years. For instance, we can look at data showing the respective contributions of technological progress—as measured by total factor productivity—in the growth of APEC member economies (excluding Brunei and Papua New Guinea due to lack of data). As the figure in the slides shows, although there was a marked decline in the share of technological progress in growth in the aftermath of the Global Financial Crisis, back in 2002 to 2007 technological progress accounted for more than a third of total growth in APEC. This demonstrates the crucial role played by innovation-led growth in the region, as acknowledged in the 2014 Beijing Declaration by APEC Leaders.

figure 1Figure 1 – Components of growth across APEC (in percentage points). Source: APEC Economic Trends Analysis Report [2014].

Part of the reason behind APEC’s dependence on technological progress as a source of growth is the fact that APEC accounts for a large part of total R&D and S&T innovations worldwide. The data further show that much of the innovation in APEC originates from the high-income member economies rather than emerging and developing ones. The second figure shows that more than half of innovations—as measured by the number of patent applications and the share of R&D spending in GDP—were accounted for by the US and Japan, followed by China and Korea. Meanwhile, the rest of APEC account for only a little more than 10% of total innovations using these metrics. Regardless of their respective contributions to total innovations, there is a clear, strong, and positive correlation between innovation on the one hand and higher levels of prosperity as measured by GDP per capita on the other.

figure 2Figure 2 – Patent applications and R&D spending in APEC, 2002-2011. Source: APEC Economic Trends Analysis Report [2014].

Although undeniably important, fostering technological growth and innovation—especially at the regional and global levels—is usually difficult to implement for a number of reasons.  First, since the private returns to R&D are generally lower than their social returns, there will tend to be underinvestment in innovations coming from the private sector alone. Second, the discovery of innovations is usually highly risky, and without proper support to innovators and venture capitalists, technological progress will not take flight. Third, hindrances in the collaboration and cooperation between innovators, scientists, and researchers across nations can limit the flow of new information and the adoption of new technologies, especially from technologically advanced to less advanced countries. But precisely because new technologies and innovations need only be shared to benefit more people, dismantling barriers to cross-border adoption of new technologies is all the more important in promoting inclusive growth.

This is where the PPSTI plays a very crucial role in the Asia-Pacific region: By working to improve the atmosphere of scientific and technological collaboration across APEC member economies, and harnessing each country’s capacity to foster innovation, the PPSTI provides a crucial global public good that benefits not only APEC member economies but also non-APEC countries.

Indeed, over the years, the PPSTI has produced a number of successful and notable programs and activities that have been widely supported and recognized across APEC for their quality and path-breaking work. For instance, innovative scientific centers based in Korea like the Asia Pacific Center for Theoretical Physics (APCTP) and the APEC Climate Center (APCC) have proven to be pioneering advocates of regional cooperation, instruction, and training when it comes to theoretical physics and climate information management, respectively. The involvement of a number of Nobel laureates in these centers (in various capacities like presidents or chairpersons) is also testament to the quality of these institutions initiated by PPSTI.

The ASPIRE Prize (or APEC Science Prize for Innovation, Research, and Education) has also become a widely recognized award rewarding brilliant young scientists in the Asia-Pacific for their innovations and commitment to rigorous, scientific research.

And in last year’s Meeting, the White Paper on Internet of Vehicles (IoV) was a truly pioneering document that explored the possibilities and challenges of the APEC related to the imminent arrival of “smart cars” and “smart roads” in the near future. That is, amid the arrival and promise of new technologies like intelligent traffic management and even “driverless” cars, the White Paper has outlined for the first time the possible impact of such technology on a wide variety of region-wide issues like infrastructure, competition, road safety, energy, and the environment—issues which will undoubtedly have to be contended with by each and all APEC member economies soon.

Truly, there has been a tremendous growth in the body of high-quality knowledge, expertise, and experience borne by PPSTI’s activities over the past years since it was established. However, there seems to remain a great but untapped opportunity as to how these outputs could be put to further use and contribute to foster inclusive growth in the region and improve the lives of the people within APEC. I am talking here about the institutionalized incorporation of PPSTI’s outputs as valuable inputs into policies that can be adopted by APEC Leaders through, for example, the Leaders’ Statement.

In my own professional experience—both in academia and government—I have extensively witnessed the power that well-crafted studies and high-quality data can lend to the formulation of policies that affect the lives of millions of people through public policy.

For instance, many of the policies and recommendations contained in the Updated Philippine Development Plan crafted by NEDA rely heavily on the surveys and statistics generated by the Philippine Statistics Authority, as well as the corpus of research produced by leading individual scholars (both local and foreign) and groups including University of the Philippines and the Philippine government’s official think tank, the Philippine Institute for Development Studies.

Research in science and technology also directly feeds into many of our high-level discussions in development and social policy. For instance, for the past years we have implemented a conditional cash transfer (CCT) program aimed at solving persistent poverty and helping the poor escape intergenerational poverty. The program has been expanded rapidly, but recent evidence shows that the results were quite limited. Studies and simulation have suggested, however, the possibility of extending the program’s coverage into high school education, which could tremendously improve the rates of return by as much as 40%. In this case, the use of evidence has convinced high-level policymakers—including Congress and the President no less—to put more money into the CCT program. While the program has had many critics over the years, we were able to address their concerns using honest-to-goodness, solid empirical work.

It is this type of melding between statistical and scientific studies on the one hand and high-level policymaking on the other that we wish to see implemented more in APEC through the initiative of the PPSTI. Indeed, the years of research, innovation, and collaboration generated by PPSTI could be put to further use as inputs to policy statements adopted by APEC Leaders. This translation of the outcomes of R&D into tangible and actionable policies will only strengthen one of the components of the APEC Leaders’ Growth Strategy agreed to in 2010—that of promoting innovation policy and research cooperation toward inclusive growth. More importantly, elevating the outcomes of PPSTI to the level of APEC Leaders will be a golden opportunity to popularize scientific research throughout the region and widen possible avenues for scientific collaboration and cooperation in the future.

To this end, we seek member economies’ support for the Philippines’ initiative to promote evidence-based policymaking within APEC. The current plan proposes a three-day workshop in Manila in September 2015 that will serve as a crucial venue for stakeholders—including researchers, academics, scientists, inventors, and sector representatives— to hem out details on how to formulate policy statements out of the outcomes of the activities of PPSTI. I understand that the main output will be policy statements and recommendations serving as inputs for the consideration of APEC Leaders.

In conclusion, evidence-based policy making has root ground as an ideal standard adopted by individual countries and governments in their respective policymaking frameworks. However, there is no reason to believe that similar evidence-based policy making cannot also be made at the regional level, especially within APEC which accounts for a large part of the world’s innovations and technologies. What better way to celebrate the significant scientific and technological advances that have arisen from PPSTI’s activities over the years than by stepping up their significance and translating them to policies that could be formally adopted and endorsed by our leaders. In doing so, we will show the world that collaborative work in science and technology is hardly confined within journal articles and ivory towers, but can in fact serve as major drivers of growth and development, as well as improve the lives of millions of people inside and outside APEC.  Let us all work together to promote evidence-based policymaking in the region as the primary—if not only—way of supporting lasting and inclusive development in the region.

Thank you all for your time and good day.​


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