“It is more important to innovate than to invent.” So said Dado Banatao, the most popular and most successful Filipino innovator of the computer within the computer, the semiconductor chip. We can say invention is the first useful manifestation of an idea. But innovation makes the original more useful, without which, the original invention may not only be irrelevant, but even a barrier to potentials, in the present day.
Even international intellectual property laws think the same way. In law, it is not the idea that is protected. It is the expression of those ideas, manifested in new products or services that enjoy protection. It is the reason why the lawsuit of Xerox against Apple for infringing its graphical computer display did not succeed. It is unfortunately the same reason why Apple’s suit against Microsoft for infringing on its own graphical user interface did not succeed. There are substantial differences in expressing ideas, and the innovation is adjudged as an improvement of the original, catering to an unserved need.
Anyone whose idea was copied or improved, without receiving compensation for it, can always reserve the right to feel shortchanged. In today’s fast-paced innovations, however, it seems that the real medal is the usage of one’s product, and real ownership is coterminous with effectiveness until the next more effective product or model comes along. It is obvious that the cardinal rule for any innovator is to never stop innovating.
Invariably though, the ultimate winners in the proliferation of innovation are the quality of life and the economy. To state the obvious, new great products bring fresh revenue, robust employment, new partnerships, more support for businesses, greater tax collections, available capital for reinvestment — and the cycle would continue.
It was apt for the Management Association of the Philippines (M.A.P.) to use innovation as its centerpiece for this year’s international CEO conference. CEOs have been candid in the survey conducted by PwC Philippines for M.A.P. It is the general observation in their industry or in their businesses, that the Filipino CEOs’ desire to innovate is much higher than the actual efforts they put in to innovate. However, while investing in research and development (R&D) is desired, it did not follow that the most innovative companies are the ones who spent most on R&D.
Perhaps unknown to most, there are actually a few laws that the country has passed to encourage inventions and innovations. The current law (Republic Act 7459) gives a token cash grant to the Filipino inventor/innovator of a product, process, design or model. It gives tax exemptions and tax incentives, even a 10-year holiday from all taxes. This law was passed in 1992, amending an earlier law passed in early 1960s. Today there are proposed bills providing a budget of P150 million for this initiative. If there is anything we learned from history, it is that these laws didn’t produce the trick, and perhaps any law, would not make any dent. Incentives alone wouldn’t cut it. Why would a genius need to be incentivized with money? He can make tons of money if his innovation works, and any fiscal government incentive would either be peanuts or totally immaterial.
Private sector efforts sway the tide more. For instance, Mr. Banatao’s Tallwood Venture Capital funds talented start-ups and provides them in-depth mentorship to make a difference in the semiconductor industry. Manny V. Pangilinan’s Idea Space funds “technopreneurs” who come up with great ideas. In last week’s M.A.P. CEO Conference, successful Filipino entrepreneurs taking advantage of the Internet and digital technology were showcased.
Apart from private sector initiatives, I subscribe to the view though that the big bet, if the country is to produce more innovators, lies with the academe. Mr. Banatao, innovator of the semiconductor chip used in all our laptops today, and the innovator of the military’s GPS (Global Positioning System) that he converted to commercial use, laments that the Bachelor of “Sciences” degrees offered in our engineering schools have no real science in them. The “farmer’s son”, already a top graduate of our local Mapua Institute of Technology, needed to pursue further studies in Stanford University in the US to which he credits his technical know-how that complimented his genius and work ethics to create and innovate in a Silicon Valley environment.
Not everyone is similarly wired. But our colleges can easily forge an honor section or a class of highly proficient students on a special program to access education from the right Ivy League schools or foreign experts. There are technologies available to do webinars and web conferences that can make access more efficient or less costly. Foreign aid and financial assistance received by the Philippines are normally directed to infrastructure, governance and poverty alleviation. Education geared towards innovation today would just be as important. We can create a program that allows our best and brightest students to be educated here, and just maybe make more loyal Filipinos out of them.
Innovation cannot be compelled; it can only be inspired. The greatest inspiration of a genius though, may not be society, country, or family, but the sheer joy of individual achievement. We should deliberately spot those geniuses among us and give them the right opportunities. If we help them as individuals, they will eventually help us as a society. As for the rest of us trying to find the innovator in us, we can remember Steve Jobs’ two keys to his genius. He said: “Stay hungry. Stay foolish.”
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Alexander B. Cabrera is the chairman and senior partner of Isla Lipana & Co./PwC Philippines. He also chairs the tax committee of the Management Association of the Philippines (MAP). Email your comments and questions to aseasyasABC@ph.pwc.com. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.