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Philippines: The innovation drive that turned social

About the author

Jonathan Kalan is an independent journalist and photographer specializing in social innovations in emerging markets. Based in Nairobi, Kenya, he frequently reports from around the region, specialising in the spaces where technological innovation, social justice and media converge. You can find him on Twitter at @kalanthinks

Philippines: The innovation drive that turned social

(Copyright: Thinkstock)

The Philippines wanted tech start-ups to blossom and make it a global competitor. Instead people focused on finding solutions to local problems. What happened?

There was a summit, a steering committee, a policy document and even a somewhat awkward new brand name: “filipinnovation”, a word that is not as catchy as it is intended to be, but gets easier to say after a few attempts.

Around six years ago, Gloria Macapagal-Arroyo, the then President of the Philippines, had launched a drive to encourage technological innovation. The goals, according to the strategy document, were primarily economic. Market-driven innovation would make the country more globally competitive.

The good news is that after a National Conference on Innovation followed by a National Innovation Summit, followed by a National Innovation Strategy, there are signs that Filipinos have taken the message to heart. By the end of the first quarter of this year, the Philippine economy had grown 7.8 % year-on-year, knocking China, which grew 7.7%, into second place in Asia. In 2011, 93.9% of internet users in the Philippines were Facebook users – the highest penetration in the world, according to an analysis published by web analytics company comScore.

But what’s interesting is that the drive for innovation hasn’t been primarily driven by profit motives. Instead they are about finding local solutions to social problems, such as poor access to clean water, the high costs of joint replacement surgery and slow responses to natural disasters.

Persuaded by country’s improving economic prospects, comparative youth and high social media use, Earl Martin Valencia returned to his home country after studying for an MBA at Stanford University, California. Last year he helped found IdeaSpace, a not-for-profit technology business incubation and education scheme with $12.5 million of funds to invest in Filipino start-ups. In April, IdeaSpace announced the winners of its competition to identify the most promising start-ups in the country. From over 700 applications they chose 10 companies to support with around $12,000 and six months of mentoring. Most of these were designed to solve social problems, especially those related to health and the environment.

“Necessity is the mother of invention, people are looking at the needs they see every day, and trying to solve them,” says Valencia, Head of Corporate Innovation for Smart Communications, the country’s largest telecoms company. “For the longest time in emerging markets like the Philippines, access to capital dictates opportunity. So how do we democratise access to capital? Reward merit.”

One of the winners, for example, was Aqua-Powered Solutions, a company that has developed Life, a small, lightweight and low-cost water purification device without the complexity, and thus cost, of more conventional purifiers. Every day, according to the company, 55 Filipinos die from water-related diseases. The company claims its prototype fits onto most taps, can purify about 25,000 litres of water and can kill 99.9% of microbes. Co-founder Michiel M. Perez says they are hoping the devices will cost $30-40 each.

Another entrant, which made the shortlist of 20 finalists but was not among the 10 winners, was Tudlo, a smart phone app that crowdsources information in real-time on road accidents, storms, floods and other natural disasters, while also disseminating emergency-related information from government agencies and other sources. So, for example, it might show an official flood warning, along with specific advised precautions and procedures, while displaying hotline numbers as well as relevant user-generated content. In 2011 over 1,200 people were killed in severe flooding in the Philippines, which ranks third in a 2012 United Nations league table of countries most vulnerable to natural disasters.

Custom companies

While young entrepreneurs are behind most of the competition entries, one winner, Mirand, was founded by Dr Rene Catan, a 55-year old orthopaedic surgeon. For over 20 years Catan had been dreaming of a way to make knee and joint replacements more affordable for Filipinos. Hearing about IdeaSpace inspired him to try to devise one.

Most recent technical innovations in knee and joint replacements, Catan claims, have been unnecessary. He says, for example, that the replacement of plastic parts with metal ones has resulted in a doubling of the costs with little improvement in function.

Another issue, he says, is that “Asians are smaller than Caucasians [for whom most knee replacements are designed], while demand for knees is much higher for Asians, because we squat or kneel more.”

By making the size of replacements more appropriate for Filipinos, using more plastic components and using local labour, Catan says he has produced a prototype joint that should cut the cost of such surgery in half – from nearly $10,000 to around $5,000 or less. He is due to conduct the first seven surgeries with his new technology this month.

Henry Motte-Munoz, a former analyst at Goldman Sachs and co-founder at Bantay.ph, a Philippine NGO that seeks to reduce corruption in the country through education and the use of technology, says that the recent rise in social innovation has occurred because despite impressive economic growth figures, there has been little reduction in inequality. “The wealthy are always at an advantage here, always have the upper hand,” he says. “What I find so interesting is inequality-reducing innovation, trying to bring equality to consumers.”

Ideas such as low-cost ways to purify water or reduced cost artificial knee joints are good examples of potential solutions that can reduce inequalities, but there remains a need to support such innovators, especially when it comes to financing, says Motte-Munoz. “It’s a high-risk country already, and a high-risk tech start-up is even more risky.”

This risky environment helps explain why large companies are behind tech start-up incubator schemes. IdeaSpace was created by Smart Communications, while Kickstart, another incubator (not to be confused with the crowdfunding firm Kickstarter), is backed by Globe, the country’s second biggest telecoms company.

While these telecom giants are helping fund and spur grassroots entrepreneurial social innovations, they are also backing novel solutions to social problems more directly. The Philippines is hailed as the “text messaging capital” of the world. Mobile subscribers send an average of 600 text messages per month, around 43% more than those in the US.
The market for mobile phones is 90% pre-paid, and people change Sim cards frequently. Last year, Smart realized they were sitting on a stockpile of unused and expired Sim cards, and decided to try to put them to good use. The result was TxtBks, a system that transforms Sim cards into lightweight textbooks, with lessons broken down into 160-character text messages.

The scheme has been tested, primarily as a means to teach English, in three schools. Smart hope to turn the pilot into a commercial service for the country’s Alternative Learning System programme, whereby teachers travel to students in more remote locations and islands around the country, holding classes in the hills, farms and marketplaces.

Of course part of Macapagal-Arroyo’s rationale for stimulating the competitiveness of the private sector through innovation was the provision of jobs for Filipinos, which can in turn can help solve social problems. Whether this happens depends how the spoils of economic progress are distributed. Irrespective of the politics, for many of the country’s apparently growing band of social innovators, improving the lot of ordinary people is a higher priority than making profits. If this can be achieved, and a tongue-twisting brand name helps speed the process, perhaps we can learn to love filipinnovation after all.

If you would like to comment on this article or anything else you have seen on Future, head over to our Facebook page or message us on Twitter.

There was a summit, a steering committee, a policy document and even a somewhat awkward new brand name: “filipinnovation”, a word that is not as catchy as it is intended to be, but gets easier to say after a few attempts.

Around six years ago, Gloria Macapagal-Arroyo, the then President of the Philippines, had launched a drive to encourage technological innovation. The goals, according to the strategy document, were primarily economic. Market-driven innovation would make the country more globally competitive.

The good news is that after a National Conference on Innovation followed by a National Innovation Summit, followed by a National Innovation Strategy, there are signs that Filipinos have taken the message to heart. By the end of the first quarter of this year, the Philippine economy had grown 7.8 % year-on-year, knocking China, which grew 7.7%, into second place in Asia. In 2011, 93.9% of internet users in the Philippines were Facebook users – the highest penetration in the world, according to an analysis published by web analytics company comScore.

But what’s interesting is that the drive for innovation hasn’t been primarily driven by profit motives. Instead they are about finding local solutions to social problems, such as poor access to clean water, the high costs of joint replacement surgery and slow responses to natural disasters.

Persuaded by country’s improving economic prospects, comparative youth and high social media use, Earl Martin Valencia returned to his home country after studying for an MBA at Stanford University, California. Last year he helped found IdeaSpace, a not-for-profit technology business incubation and education scheme with $12.5 million of funds to invest in Filipino start-ups. In April, IdeaSpace announced the winners of its competition to identify the most promising start-ups in the country. From over 700 applications they chose 10 companies to support with around $12,000 and six months of mentoring. Most of these were designed to solve social problems, especially those related to health and the environment.

“Necessity is the mother of invention, people are looking at the needs they see every day, and trying to solve them,” says Valencia, Head of Corporate Innovation for Smart Communications, the country’s largest telecoms company. “For the longest time in emerging markets like the Philippines, access to capital dictates opportunity. So how do we democratise access to capital? Reward merit.”

One of the winners, for example, was Aqua-Powered Solutions, a company that has developed Life, a small, lightweight and low-cost water purification device without the complexity, and thus cost, of more conventional purifiers. Every day, according to the company, 55 Filipinos die from water-related diseases. The company claims its prototype fits onto most taps, can purify about 25,000 litres of water and can kill 99.9% of microbes. Co-founder Michiel M. Perez says they are hoping the devices will cost $30-40 each.

Another entrant, which made the shortlist of 20 finalists but was not among the 10 winners, was Tudlo, a smart phone app that crowdsources information in real-time on road accidents, storms, floods and other natural disasters, while also disseminating emergency-related information from government agencies and other sources. So, for example, it might show an official flood warning, along with specific advised precautions and procedures, while displaying hotline numbers as well as relevant user-generated content. In 2011 over 1,200 people were killed in severe flooding in the Philippines, which ranks third in a 2012 United Nations league table of countries most vulnerable to natural disasters.

Custom companies

While young entrepreneurs are behind most of the competition entries, one winner, Mirand, was founded by Dr Rene Catan, a 55-year old orthopaedic surgeon. For over 20 years Catan had been dreaming of a way to make knee and joint replacements more affordable for Filipinos. Hearing about IdeaSpace inspired him to try to devise one.

Most recent technical innovations in knee and joint replacements, Catan claims, have been unnecessary. He says, for example, that the replacement of plastic parts with metal ones has resulted in a doubling of the costs with little improvement in function.

Another issue, he says, is that “Asians are smaller than Caucasians [for whom most knee replacements are designed], while demand for knees is much higher for Asians, because we squat or kneel more.”

By making the size of replacements more appropriate for Filipinos, using more plastic components and using local labour, Catan says he has produced a prototype joint that should cut the cost of such surgery in half – from nearly $10,000 to around $5,000 or less. He is due to conduct the first seven surgeries with his new technology this month.

Henry Motte-Munoz, a former analyst at Goldman Sachs and co-founder at Bantay.ph, a Philippine NGO that seeks to reduce corruption in the country through education and the use of technology, says that the recent rise in social innovation has occurred because despite impressive economic growth figures, there has been little reduction in inequality. “The wealthy are always at an advantage here, always have the upper hand,” he says. “What I find so interesting is inequality-reducing innovation, trying to bring equality to consumers.”

Ideas such as low-cost ways to purify water or reduced cost artificial knee joints are good examples of potential solutions that can reduce inequalities, but there remains a need to support such innovators, especially when it comes to financing, says Motte-Munoz. “It’s a high-risk country already, and a high-risk tech start-up is even more risky.”

This risky environment helps explain why large companies are behind tech start-up incubator schemes. IdeaSpace was created by Smart Communications, while Kickstart, another incubator (not to be confused with the crowdfunding firm Kickstarter), is backed by Globe, the country’s second biggest telecoms company.

While these telecom giants are helping fund and spur grassroots entrepreneurial social innovations, they are also backing novel solutions to social problems more directly. The Philippines is hailed as the “text messaging capital” of the world. Mobile subscribers send an average of 600 text messages per month, around 43% more than those in the US.
The market for mobile phones is 90% pre-paid, and people change Sim cards frequently. Last year, Smart realized they were sitting on a stockpile of unused and expired Sim cards, and decided to try to put them to good use. The result was TxtBks, a system that transforms Sim cards into lightweight textbooks, with lessons broken down into 160-character text messages.

The scheme has been tested, primarily as a means to teach English, in three schools. Smart hope to turn the pilot into a commercial service for the country’s Alternative Learning System programme, whereby teachers travel to students in more remote locations and islands around the country, holding classes in the hills, farms and marketplaces.

Of course part of Macapagal-Arroyo’s rationale for stimulating the competitiveness of the private sector through innovation was the provision of jobs for Filipinos, which can in turn can help solve social problems. Whether this happens depends how the spoils of economic progress are distributed. Irrespective of the politics, for many of the country’s apparently growing band of social innovators, improving the lot of ordinary people is a higher priority than making profits. If this can be achieved, and a tongue-twisting brand name helps speed the process, perhaps we can learn to love filipinnovation after all.

If you would like to comment on this article or anything else you have seen on Future, head over to our Facebook page or message us on Twitter.

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