Adoption of the DOST developed technologies among SMEs under the DOST IV-A Small and Medium Enterprises Technology Upgrading Program [SETUP] / Maria Judith Lagarde Sablan

Year : 2012

Number of Pages : 93 leaves

Adviser : Prof. Roger D. Posadas

Executive Summary

This paper presents a study on the adoption of DOST-developed techniques under the DOST IV-A SETUP. It primarily aims to determine the extent of adoption of DOST-developed technologies among the MSMEs under the DOST IV-A (CALABARZON) region Small and Medium Enterprises Technology Upgrading Program (SETUP). It specifically aims to profile the different technologies (equipment) availed and adopted by the MSMES under the DOST IV-A SETUP to compare the number of SMEs that adopted DOST-developed technologies against SMEs that purchased commercially available technologies across the six industries under the DOST IV-A SETUP to investigate the adoption and decision processes of SMEs under DOST IV-A SETUP through case analyses of selected firms, and determine the possible factors that influence and/or hinder in the adoption process and, to present recommendations and possible policy actions to address the issues. Nowadays, micro and small and medium enterprises (MSMEs) face greater pressure due to intense competition both in the local and foreign markets brought about by globalization. As one of the major economic players, MSMEs need to increase competitiveness by infusing innovation in their businesses. This technique has been proven by many studies and supported by many scholars. Innovation can be generated internally through the conduct of research and development (R&D) or externally from various sources such as government research laboratories (RDIs) and other private research institutions. However, internal generation of innovation through R&D is quite costly. Thus, small players such as MSMEs often source innovation from outside sources. The government has a major role in bringing innovation to the MSMEs. As a premier agency, the Department of Science and Technology (DOST) has a mission to advance S&T knowledge, services, and innovations produced by committed professionals to ensure sustained socio-economic benefits for the Filipinos. In 2002, the DOST SETUP was launched to assist MSMEs achieve greater competitiveness. One of the strategies was the provision of technology. This program has been implemented in all regions nationwide including region IV-A commonly known as CALABARZON region. Because of its strategic location as the region closest to the National Capital Region (NCR) and the potential number of MSMEs present in the region, CALABARZON was chosen for this study. At present, there is a limited study on the extent of adoption of technologies, particularly, of DOST-developed technologies among MSMEs under the DOST IV-A SETUP. Study on the adoption of DOST-developed technologies will show the extent of linkage between DOST RDIs as provider of technologies and MSMEs as end users. This can guide policy makers in designing strategic plan on programs aimed at supporting SMEs. The study followed the framework of Roger and Shoemaker on the consumer adoption process composed of six stages, namely : awareness, interest, evaluation, trial, adoption and confirmation. To determine the distribution of adopted DOST-developed technologies by MSMEs under DOST IV-A SETUP, secondary data were obtained from DOST IV-A SETUP offices so that a profile on the different technologies availed by MSMEs was made. The number of MSMEs that availed DOST-developed technologies was compared to those that purchased commercially-available technologies. Results showed the low adoption of DOST-developed technologies by MSMEs under the DOST IV-A SETUP. Only 6 of the total MSMEs (58) that availed SETUP assistance opted for DOST-developed technologies while 47 SMEs purchased commercially available technologies. These figures accounted for only 10.0 percent and 81.0 percent, respectively, of the total MSMEs enrolled under the program. The low number of adoption of DOST-developed technologies, however, does not necessarily showed that DOST-developed technologies were inferior compared to commercially available technologies. Further in-depth study is needed on this aspect. To examine the adoption decision process, case analyses of three selected firms were conducted through a face-to-face interview with the firm owners. Semi-structured questionnaire was used to allow the MSME owner to freely express himself/herself and facilitate the interview process. Interview results were recorded, transcribed, and analyzed by searching for patterns and similarities. All three MSMES followed the various stages explained by Rogers and Shoemaker except for the fourth stage, which is the trial phase. This stage was skipped because of the additional cost it will intake. All three firms proceeded to the adoption stage after the third stage of evaluation. The adoption decision process was highly influenced by the power of the MSME owner and their willingness to adopt technologies. There could be several reasons or factors for the choice of the specific technology. No single approach or process may be sufficient to ensure successful innovation and adoption. Emphasis should be given to the quality of the technology assistance regardless of its source. Assistance should be provided in relation to the environment in which the technology will be used by the MSME. Future studies were recommended that stemmed from the present study. Among them was the creation of a centralized DOST technology transfer office that will cater and organize all the technology transfer activities of the seven RDIs under the DOST.