Effects of the Small Enterprises Technology Upgrading Program of the Department of Science and Technology–Philippines on the Productivity of Beneficiary Enterprises in CALABARZON

Abstract

The Department of Science and Technology (DOST) initiated the Small Enterprise Technology Upgrading Program (SETUP) to provide assistance to micro, small and medium enterprises (MSMEs) through technological innovations. From 2002 to 2010, 51 projects in CALABARZON availed of the SETUP assistance mainly for the acquisition of production equipment. This study assesses the performance of MSMEs which focused on the achievement of the target level of improvement and identified the factors that affected the achievement or non-achievement of the target. The target differs for every firm and depends on the technological intervention identified during the conduct of Technology Needs Assessment (TNA). Results show that within the short term (i.e., one year after the availment of assistance), more than half of the firms in the food/beverage and furniture/GTH achieved their target. In the medium term (2–3 years), the furniture/GTH sector successfully achieved its target with contributory factors such as innovation, production efficiency and good working condition. The food/beverage and metals/engineering sectors were not as successful due to the decrease in market demand and lack of working capital. In the long term (4 years and longer), the food and beverage sector had achieved the target level of improvement but the metals and engineering sector as well as the furniture and GTH sectors apparently failed. External factors such as 2007-2009 global economic crises and typhoons contribute to the failure of the SETUP-assisted projects. All in all, SETUP is deemed as successful in encouraging and assisting MSMEs to adopt technological innovations that improve their operation and productivity; however, internal and external factors affect the ability of MSMEs to achieve their target level of improvement. Keywords: DOST-Philippines, technological innovation, MSMEs