DTI adjusts industrial development plans

Strategic actions described by the previous administration as crucial to the country’s industrialization have been modified by the Department of Trade and Industry (DTI) under its current political orientation.

Under the Duterte government, the Department of Trade and Industry has implemented the Inclusive Industrial Innovation Strategy or I3S that aims to promote positive changes in the manufacturing, agriculture and service industries in the Philippines.

Six strategies are identified for adoption by the country, industries, and academy: Embracing Industry 4.0 technologies, Developing innovative start-ups, SMEs, Production system consolidation, Improving ease of doing business, Upskilling/Reshaping workforce, and Building. An ecosystem of innovation and entrepreneurship.

In a speech Monday to the Institute of Financial Executives of the Philippines, Secretary of Commerce Alfredo Pascual said that there are six strategic actions that must also be pursued in line with an industrial policy based on science, innovation and technology.

As with the previous I3S programme, the former also includes the adoption of Industry 4.0 and its attendant technologies such as artificial intelligence and smart manufacturing.

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The second also emphasizes the need to develop innovative micro, small and medium enterprises as well as start-up companies, while the third – integrating trade policies, investment promotion and industry development – expands the previous concept of linking production systems and value chains.

Improving the ease of doing business has been reframed as creating and fostering an enabling economic environment to attract more investment while upskilling/reskilling is now developing human capital and capacity building programs to prepare the workforce for the future.

Finally, promoting regional industrialization through innovation and entrepreneurship has replaced the previous strategy of building an innovation and entrepreneurship system.

The previous I3S program identified the following as priority industries: automobiles and auto parts; electronic manufacturing services, aircraft parts, and aircraft maintenance, repair, and life; Chemicals; Shipbuilding and ship repair. Furniture, clothing and creative industries. iron and steel tools and molds; Construction and IT/Business Operations Management and E-Commerce; transportation and logistics; tourism; and agricultural industries.

Meanwhile, DTI’s current industrial policy has identified four sources of growth: industry, manufacturing, and transportation (IMT); Technology, Media, and Communications (TMT); Health and Life Sciences (HLS); Modern basic needs and flexible economy packages.

“The top three industry clusters align with trends in the global reshaping of global value chains (GVCs) due to the pandemic, the emergence of disruptive technologies, and ‘service’ manufacturing,” a transcript of Pascual’s discourse states.

Meanwhile, the fourth component “strengthens the foundations for the country’s economic recovery, and long-term sustainable and inclusive growth.”

In particular, Pascual said that in terms of IMT, the Philippines should process and produce semi-finished and finished metal products rather than just export raw ore.

Meanwhile, the continued integration of pharmaceutical and medical devices and healthcare services has been seen in the wake of the Covid-19 pandemic facilitating the development of the HLS cluster in the Philippines.

Regarding the fourth group, Pasquale said that it will be given priority “given the need to pursue food security, the modernization of the agricultural and fishing sectors, and the important goals in basic needs, quality education and clean energy.”

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