17th Sustainable Shared Growth Seminar University of the Philippines- Diliman

Introduction

Data and Methodology

Philippines Knowledge Economy

Regional Knowledge Economy

• fundamental resource for economic efficiency and

growth;

• knowledge accumulation is essential for economic

systems to be able to face world competition;

• new and appealing products become vital for

stimulating scarce demand;

• new organizational and managerial solutions are

crucial for increasing firm’s efficiency

• Source of comparative advantage of most

developed economies

• externalities stemming from urban environments

• knowledge spillovers subject to strong and visible

distance decay

• collective learning occur and embedded in

geographical space.• Silicon Valley, Third Italy

Oslo and Bogota Manual

OECD

human capital

R&D inputs( R&D investment and personnel)

R&D Outputs(Patents)

• Analyze the the geographical distribution of

knowledge in the Philippines.

• Contribute to the understanding of the spatial

dimension of knowledge in developing countries

InputR&D Personnel (Public, Private, and Non-profit)

Higher Education Institutions (HEI) Enrollment

R&D Expenditure (Public, Private, Non-profit, and Industry)

Number of micro, small, and medium enterprises (MSME)

Number of HEI (Public and Private)

OutputLET Passing Rate

Other Fields Passing Rate

COE Programs

COD Programs

Gross Regional Domestic Product(GRDP)

Unit of Analysis: Regions

Principal Component Analysis (PCA)

� Cornell University, INSEAD and the World Intellectual Property Organization (WIPO).

� (1) Institutions,

� (2) Human capital and research,

� (3) Infrastructure,

� (4) Market sophistication,

� (5) Business sophistication.

� (6) Knowledge and technology outputs and

� (7) Creative outputs.

52

54

56

58

60

62

64

66

68

0

10

20

30

40

50

60

0 5 10 15 20 25 30 35 40 45

Institutions

Human Capital and Research

Infrastructure

Market Sophistication

Business Sophistication

Knowledge and Technology Outputs

Creative Outputs

-1.000

-0.500

0.000

0.500

1.000

1.500

2.000

2.500

NCR

CAR

Region I(Ilocos)Region II (Cagayan Valley)

Region III(Central Luzon)

Region IV-A(Calabarzon)

Region IV-B(MIMAROPA)Region V( Bicol)

Region VI (Western Visayas)Region VII (Central Visayas)

Region VIII (Eastern Visayas)Region IX(Zamboanga

Region)

Region X(Northern

Mindanao)Region XI(Davao Region)

Region XII(SOCCKSARAGEN)

CARAGA

ARMM-1

-0.7

-0.4

-0.1

0.2

0.5

0.8

1.1

1.4

1.7

2

2.3

-1 -0.8 -0.6 -0.4 -0.2 0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 2 2.2 2.4 2.6 2.8 3 3.2 3.4 3.6 3.8 4

Knowledge Index

GRDP

NCR

CAR

Region I(Ilocos)Region II (Cagayan Valley)

Region III(Central Luzon)

Region IV-A(Calabarzon)

Region IV-B(MIMAROPA)Region V( Bicol)

Region VI (Western Visayas)Region VII (Central Visayas)

Region VIII (Eastern Visayas)Region IX(Zamboanga

Region)

Region X(Northern

Mindanao)Region XI(Davao Region)

Region

XII(SOCCKSARAGEN)

CARAGA

ARMM-1

-0.5

0

0.5

1

1.5

2

2.5

-2 -1.5 -1 -0.5 0 0.5 1 1.5

Knowledge Index

Distance

NCR

CAR

Region I(Ilocos)Region II (Cagayan

Valley)

Region III(Central

Luzon)

Region IV-

A(Calabarzon)

Region IV-

B(MIMAROPA)Region V( Bicol)

Region VI (Western

Visayas)

Region VII (Central

Visayas)Region VIII (Eastern

Visayas)Region IX(Zamboanga

Region)

Region X(Northern

Mindanao)Region XI(Davao

Region)Region

XII(SOCCKSARAGEN)CARAGA

ARMM -1

-0.8

-0.6

-0.4

-0.2

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

2.2

2.4

-0.5 -0.3 -0.1 0.1 0.3 0.5 0.7 0.9 1.1 1.3 1.5 1.7 1.9 2.1 2.3 2.5 2.7 2.9 3.1 3.3 3.5

Knowledge Index

R&D Expenditure

High Knowledge Index, Low R&D

Expenditure

Region III(Central Luzon)

Region VII(Central Visayas)

High Knowledge Index, High R&D

Expenditure

NCR

Region IV-A

Low Knowledge Index, Low R&D

Expenditure

ARMM, CAR, CARAGA, Region I,

Region II, Region IV-B, Region VI,

Region VIII, Region IX, Region X,

Region XI, Region XII

NCR

CAR

Region I(Ilocos)Region II (Cagayan Valley)

Region III(Central Luzon) Region IV-A(Calabarzon)

Region IV-B(MIMAROPA)Region V( Bicol)

Region VI (Western Visayas)

Region VII (Central Visayas)

Region VIII (Eastern Visayas)

Region IX(Zamboanga

Region)

Region X(Northern

Mindanao)

Region XI(Davao Region)

Region

XII(SOCCKSARAGEN)

CARAGA

ARMM

-2

-1.7

-1.4

-1.1

-0.8

-0.5

-0.2

0.1

0.4

0.7

1

1.3

-1 -0.7 -0.4 -0.1 0.2 0.5 0.8 1.1 1.4 1.7 2 2.3 2.6 2.9

Output

Input

High Input, Low Output

Region I, Region II, Region VII,

Region VIII, Region X, Region XII

High Input, High Output

NCR

Region III

Region IV-A

Low Input, Low Output

Region IV-B, Region V, Region VI,

Region IX, Region XII, CARAGA,

CAR, ARMM

Low Input, High Output

• Huge gap among regions

• More affluent regions have higher knowledge

index

• Proximity to the capital translates to higher

knowledge index

• Majority of the regions, especially in Mindanao fare

poorly in the taxonomy

� Audretsch, D.B & Feldman, M.P .(2004). Knowledge spillovers and the geography of innovation. In J. V. Henderson& J.F Thisse(eds.), Handbook of Regional and Urban Economics, edition 1, volume 4 (pp. 2713-2739). Elsevier.

� Camagni, R. &Capello, R. (2009). Knowledge-based economy and knowledge creation: The Role of Space. In U. Fratesi & L.Senn(eds.), Growth and innovation of competitive regions: the role of internal and external connections (pp. 145-165). Berlin: Springer

� Crescenzi, R. & Rodriguez-Pose, A.(2009). Systems of innovation and regional growth in the EU: endogenous vs. external innovative activities and socio-economic conditions. In U. Fratesi & L.Senn(eds.), Growth and innovation of competitive regions: the role of internal and external connections (pp. 145-165). Berlin: Springer

� Fratesi, U.& Senn, L. (2009). Growth and Innovation of Competitive Regions: The Role of Internal and External Connections. Berlin: Springer