Knowledge capital for self-sustaining, inclusive development

That education is indispensable for personal advancement and national progress is widely acknowledged. Good education that’s widely shared results in higher productivity and entrepreneurial skills and, hence, lower levels of poverty and inequality. It’s practically gospel truth largely taken for granted as the discourse has moved on, especially in the more dynamic countries, to the pursuit of knowledge capital for still higher levels of development that’s inclusive and sustainable.

Knowledge capital—also referred to as “suprastructure”—derives from science and technology and the arts and underpins a country’s capacity for innovation and creation. The concrete outcome is (or should be) the evolution of innovative and creative industries that require a dynamic and self-sustaining ecosystem comprising, at any one time, lower and higher levels of education and skills. While the Philippines has made strides in this direction, much more needs to be done to be at par with our more progressive Asean neighbors.

This, in essence, describes the theme of the University of the Philippines’ “Knowledge Festival—Utak at Puso,” held last April 17-19. The idea was to celebrate what UP has accomplished thus far and further energize faculty and staff to reach loftier heights, as well as lead, as the national university, the other educational institutions nationwide in making greater strides.

A dynamic education ecosystem entails solid quality education—basic, tertiary and postgraduate—which means sharply increased investment spending from both public and private sectors in all levels of the system. To be fair to President Aquino’s administration, it has actually accorded education high priority. For instance, of education’s increased budget of P365 billion for 2015, P43.3 billion was given to state universities and colleges (SUCs)—an increase of nearly 14 percent over that for 2014. Upward of P3 billion was made available for scholarships under SUCs and more than P2 billion for scholarships administered by the Commission on Higher Education.

Nevertheless, our country has a great deal of catching up to do. While the other four Asean founding members spend an average of 5-6 percent of their GDP on education, we make do with 3 percent of a smaller GDP and a larger student population! This readily explains why even our best universities lag behind their global and regional counterparts. Our study notes that in 2014, UP ranked just eighth of the Top 10 universities in Asean. In 2010, the Philippines ranked 89th in the global Knowledge Economy Index, way behind Singapore, which placed 19th.

A “UP think paper” that served as a background piece for the Knowledge Festival notes: “Our level of technology remains low in quality and scale, and concentrated in low-productivity sectors. To catch up and move ahead faster, we need to raise our scientific and technological skills, which only better and more focused education can achieve. This calls for massive government investment in high-level knowledge capital—the so-called “suprastructure” of long-term economic growth. This human capital will create a knowledge-based economy driven not just by brawn but [also] brains, tapping into one of our richest but least developed resources.

“In other words, and to put it plainly, we need more brain power—more nerds, if you will—of the kind who can innovate, produce, do trailblazing research and network with their global peers. That kind of knowledge can reap sizeable benefits for our economy, as it’s done for Singapore, China, South Korea and a host of other countries who’ve invested in their suprastructure.”

But PhDs don’t come easy, and aren’t cheap. The UP paper argues that our government should have a plan to produce them systematically. The object of our educational system shouldn’t just be producing hordes of college graduates who can’t find good jobs, but also graduates in fields and with skills that the economy actually needs. The best of them should be sent abroad for advanced degrees, and then brought home with sufficient incentives and an environment conducive to research. Further, it recommends that in areas where we lack expertise, world-class professors and researchers should be enticed to teach here and work with their local counterparts, in a similar manner that Singapore was able to considerably shorten its learning curve.

While much of this will occur in science and technology, the paper wisely notes that: “Because values are important in setting the right path to growth, the promotion of science and engineering should be closely integrated with the social sciences, the arts and the humanities to ensure the holistic development of the Filipino.”

For UP to play its role as the national university and spread the work and its benefits, the UP paper envisions a hubs-and-spokes model of development anchored on regional centers of excellence in specific fields. To the extent that these HEI (higher education institution) centers of excellence are located in leading regional growth centers, this model can well fit into the country’s regional development strategy to decongest the National Capital Region long plagued by diseconomies of agglomeration.

There’s a lot more in the UP paper titled “Knowledge-Based Development and Governance: Challenges and Recommendations to the 2016 Presidential Candidates.” It was prepared and given to the candidates prior to the second presidential debate, for which education was among the identified topics. But it was never touched on. Let’s hope that that doesn’t reflect any or all of the candidates’ lack of interest in this all-important subject for self-sustaining, inclusive development.

Ernesto M. Pernia, PhD, is professor emeritus of economics, University of the Philippines, and former lead economist, Asian Development Bank.