DR. RAFAELITA M. ALDABAUndersecretary

Competitiveness & Innovation GroupABAC PH Digital Innovation Forum, 21 October 2020

Digital Innovation for MSME Development

Empowering MSMEs to Connect to the World

Smart Manufacturing Survey of Establishments

Planning & scheduling

Manufacturing activity

management

Equipment connectivity &

data management

Material management & handling

Equipment maintenance

Shop floor visibility

Quality Cybersecurity

• Survey Tool developed by Manufacturing Enterprise Solutions Association (www.mesa.org)• Assess technology utilization status of manufacturing firms dimensions • Understand where firms are in terms of Industry 4.0 preparedness

SMART Manufacturing Maturity Index (SMMI)

PurelyManual

With Spreadsheet Management

Stand-alone DB Management System with

Legacy Applications

Mostly Manufacturing

Execution System used in

this Layer

Industry 4.0: MES + IIoT, Big Data, Machine

Learning, Robotics, etcLEVEL 0

LEVEL 1

LEVEL 2

LEVEL 3

LEVEL 4

Total Respondents: 144 Firms 79% or 114 respondents have Very Low or Low Technology Utilization

Rev

enue

(Phi

lippi

ne P

eso)

Dimension Score (0 – 40)

1

10

100

1,000

10,000

100,000

1,000,000

10,000,000

100,000,000

1,000,000,000

10,000,000,000

100,000,000,000

1,000,000,000,000

(3,000,000) (2 ,000,000) (1 ,000,000)

-0 5 10 15 20 25 30 35 40

Micro Small Medium Large

No Technology(6)

Very Low(57)

Low(53)

High(17)

Very High(7)

79% of the respondents are in levels from very low to low technology utilization

40% of firm respondents are in Level 1, 38% in Level 2

Source: DTI Survey on the Technology Utilization Status of Manufacturing Companies in the Philippines

13%

17%

4%

20%

67%

25%

65%

40%

48%

30%

38%

13%

38%

24%

13%

4%

13%

8%

4%

13%

5%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Large

Medium

Small

Micro

All Categories

Level 0 Level 1 Level 2 Level 3 Level 4

Cybersecurity, Quality, and Manufacturing Activity Management: highest tech utilization

Legend: 4 (Highest) =High Technology Utilization, 0 (Lowest) =No Technology Utilization

Large manufacturers recorded the highest technology utilization across all manufacturing

dimensions

Large enterprises in highly urbanized areas have the highest technology utilization

Legend: 4 (Highest) =High Technology Utilization, 0 (Lowest) =No Technology Utilization

Firms with High Technology Utilization concentrated in NCR, Region 3, Region IVA

Digital divide may widen existing regional economic development imbalances in the country

Opportunities and Challenges in Transforming to Industry4.0 Technologies

Source: DTI Survey on the Technology Utilization Status of Manufacturing Companies in the Philippines

77%

67%

microenterprises are familiar with Industry 4.0

small and medium enterprises are familiar with Industry 4.0

83%largeenterprises are familiar with Industry 4.0

Primary Considerations for Shifting to Industry 4.0

28%Improvement in Productivity and Competitiveness

13%Innovation and

Technology Advancement

13%Cost of

Investment & Funding

10%Market

Conditions

7%Others

29%Not Considering/

Unfamiliar

Barriers to Industry 4.0 Transformation

#1Lack of financial

capability

#2Unfamiliar/Not Considering

#3Other

Company Reasons

#4Market

Conditions

#5Lack of Skills, Knowledge,

and Expertise

#6Poor Digital

Infrastructure

The Philippine MSME Landscape35.7%

2018 MSME Contribution to Value Added

63.2%

2018 MSME Employment Share

MSME CONTRIBUTION (%)

Micro Small MediumEnterprises 88.5 10.6 0.5Employment 28.9 27.0 7.3

99.5%99.5%Of Philippine Establishment

are MSME

(998 342 establishment)

SECTORAL DISTRIBUTION

123

Wholesale & Retail Trade 46.3%Establishment: 461,765 (46.3%)Employment: 2,040,774 (35.7%)

Accommodation & Food Service 14.5%Establishment: 144,535 (14.5%)Employment: 882,455 (15.4%)

Manufacturing 11.7%Establishment: 116,335 (11.7%)Employment: 767,831 (13.4%)

Source: BSMED 2018 Philippine MSME Statistics

INDUSTRY 4.0READINESSINITIATIVES

SME ACADEMY INDUSTRY 4.0 PILOT FACTORYINDUSTRY 4.0 ROADMAPS

UPSKILLING & RESKILLING OF WORKFORCE

PHILIPPINES AS ANAI CENTER

Securing Manufacturing Revitalization & Transformation (SMaRT)

GUIDING PRINCIPLES

WHAT TO SUPPORT?

SELECTION CRITERIA AND GUIDELINES

HOW TO SUPPORT

Performance Based

Time-Bound

Targeted

Transparent

Industry 4.0 Adoption

Product Upgrades

New Business Models

Service Upgrades Process Upgrades

Soft LoansGrants

Incentives, Vouchers, Tariffs

Other Fiscal and Non-Fiscal Support

Intellectual Property Protection

Standards Subsidies

Global Value Chain Upgrading

Adoption of Industry 4.0 technologies to catalyze manufacturing growth &

the economy

Commercialization of Innovation and R&D

Industrial Development in Rural Areas, new industries,

clusters & activities to address supply/value chains

gaps

Innovating and Preparing for the New Normal

The DTI moved to use Digital Platforms and E-Commerce Technology to amplify its

Promotional Fairs sharing and responding more information to potential buyers and the public.

DTI Programs aimed at equipping MSMEs for the New Normal

Virtual Promotions Strengthening Local Businesses

“Buy Local, Go Lokal” campaign supports Philippine MSMEs by shifting buying patterns

towards consumption and purchase of Philippine fresh produce and manufactured goods.

Transforming Skills and Training

Webinars one-commerce to help MSMEs transform their

businesses digitally.

ASEAN SME Academy aims to grow and compete regionally and internationally

With Industry 4.0, industries can be made more efficient & scalable, leapfrog to inclusive, resilient,

& sustainable industrial development

Embrace Industry 4.0 to strengthen competitiveness & sustainability of industries

Adapt programs to meet demand for talent created by Industry 4.0

Innovate, integrate into digital economy, industry clusters & global collaboration

Government-academe-industry collaboration

As we shift towards Industry 4.0, we need to ensure that no enterprise especially MSMEs or region is left behind.

THANK YOU