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The Philippines Upgrades Services of SETUP 4.0 for MSMEs

The Department of Science and Technology (DOST) has implemented initiatives on the Small Enterprise Technology Upgrading Program (SETUP) 4.0, which is a new and improved nationwide strategy that brings local micro, small, and medium enterprises (MSMEs) to the Industry 4.0 level, also known as the digital transformation of industrial markets, as of last year. The project assists such enterprises in adopting technological innovations to improve their products, services, and operations, thereby increasing productivity and competitiveness.

The Department of Science and Technology-National Capital Region held the virtual kick-off for the Small Enterprise Upgrading Program (DOST-NCR SETUP) e-Caravan, a week-long series of virtual and face-to-face activities to promote the upgraded services of SETUP 4.0, intending to push MSMEs towards smarter and resilient industry players.

Under SETUP 4.0, DOST’s interventions will not only benefit the individual firms. We will also be providing industry-level interventions, making sure that each industry under our priority sectors is following a set roadmap that is directed towards transitioning to the fourth industrial revolution.

– Department of Science and Technology (DOST) Secretary

The SETUP e-Caravan presents the various technical assistance for the MSMEs which include capacity building, technology upgrading, consultancies, and manufacturing enhancement assistance, especially during this time of the COVID-19 pandemic.

Several DOST SETUP proponents were not spared to the pandemic’s negative effects, as they struggled to stay afloat using science, technology, and innovation. According to a study cited by the DOST Secretary, 70.6 % of MSMEs in the Philippines were forced to close temporarily due to the COVID-19 pandemic. He went on to say that “over 70% of local MSMEs had cash flow problems,” forcing owners to borrow from friends and family to keep their business running.

DOST incorporated a moratorium on SETUP refund payments for five months in 2020 and six months this year as part of its contingency plan to soften the blow to its co-operators. DOST is now focused on reintroducing its SETUP programme as SETUP 4.0, which will include industries from the Department’s priority sectors. SETUP 4.0 will not only assist MSMEs in surviving the pandemic’s challenges but will also prepare them and their respective industries for the Industrial Revolution 4.0, which will be characterised by the widespread use of emerging technologies such as automation, Internet of Things, 3D printing, robotics, and artificial intelligence, among others.

Despite the enhancement of the MSME’s competitiveness, the DOST-NCR Director stated that it has been impacted by several factors such as consumer demand for products, rising costs on materials and production, policies, and the emergence of health protocols as a result of the COVID-19 pandemic.

Furthermore, SETUP 4.0 is a response to the rapid emergence of IR 4.0 as well as the crippling effects of the COVID-19 pandemic in local industries. He stated that through this improved service, MSMEs will obtain calibrated assistance or service that considers the type of assistance, the size of the MSME, the level of technological needs, and other factors. Firms and industries will be assisted in transforming these MSMEs into smarter enterprises by utilising more advanced technologies.

OpenGov Asia in an article reported that when considering the innovation process, the image that typically comes to mind is that of multinational corporations with extensive R&D departments and large teams of researchers. Despite their relatively low R&D budgets, MSMEs have significantly innovated their processes, increasing the country’s Global Innovation Index (GII). The Philippines, which was ranked 73rd in 2018, is now ranked 54th out of 129 countries, with a score of 36.18. Considering a large number of Philippine MSMEs compared to large enterprises, the MSME sector’s absolute influence on overall innovation remains significant.

As the supply chain and healthcare industries in Visayas and Mindanao adapt to the effects of the pandemic, one of the Philippines’ enterprise and SME business solution companies is supporting the MSMEs in these regions with digital solutions, providing customers with safer, more reliable, and more convenient ways to move their goods and care for their health.

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