Innovative firms led by paper, retail, food and metal industries are likely to survive the crisis brought by the pandemic while microenterprises and youth-led firms which fall short when it comes to innovation will need to upskill.
Findings of the new International Trade Centre report cited these innovative companies for turning to online sales instead of firing staff, steps that enabled them to avoid bankruptcy during the pandemic.
Broadly, the report found Filipino firms that invest in research and development (R&d) or are able to produce new products and services have been less affected by new coronavirus disease 2019 as they are better placed to quickly adapt to new market conditions.
The report showed 60 percent of R&D -intensive businesses surveyed in 2019 were strongly affected by the pandemic while for non-R&D-intensive companies, 83 percent were strongly affected.
The findings highlight the fact that government should help SMEs focus on innovation skills, the report added.
The report is based on two surveys – one on competitiveness and the other the business impact of COVID-19 – conducted with the Bureau of Small and Medium Enterprise Development.
While the report found that 80 percent of small and medium enterprises are satisfied with the skills of their workers, a key enabler of innovation, which is employee skills in many smaller Filipino firms, do not match match company needs.
The report said incentives for R&D can help firms compete in lucrative markets.
Other report recommendations include championing the positive role of business support organizations, who get critical market and business support information to small companies. Also, government investment in digital trade facilitation and expanded e-payment infrastructure can reduce exposure to shocks to the cash economy and boost the competitiveness of remote businesses. – Irma Isip