One of the prominent issues facing local economies is the need to add more value to the economy. This means creating more income out of the products and services available in the local market. Producing goods of higher value means more income for businesses and employees. As a result of this collective effort, the economy expands. Time and again we have discussed in many forums how innovation will be needed to achieve this. This week I would like to focus on specific areas where local innovation can add value and how startup businesses can drive innovation.
One area is agriculture, which is faced with the challenge of increasing yield to meet local food security goals while tackling climate-related challenges. Innovative solutions will be needed in developing climate-smart agriculture. In particular, this includes methods and technologies for increased crop yields to meet food security goals despite shifting weather patterns due to climate change.
On the ground and at the farm, climate change manifests as either having too much rain or too much heat within certain periods, breaking long-established climate patterns on which farmers schedule interventions, such as applying fertilizer. Depending on the crop characteristics the yields will either increase or decrease.
For example, fruit-bearing crops require enough heat and sunshine to facilitate flowering that produces the fruit. Too much rain hurts the plant's ability to flower since rain causes the buds to fall from their branches. In turn, fewer flowers mean fewer fruits per tree or plant, or per hectare as the case may be. When costs such as fertilizer go up, additional expenses shrink revenue. On a yearly basis, it means less farm income.
Having less yield matters when your community has set goals for ensuring local food security. Worse, higher transport costs between regions in recent years hikes logistics expenses. These additional travel costs are passed on to buyers and consumers and manifest as higher inflation. Many communities will need to invest in local food production to manage the additional cost challenges since shorter routes from farm to market can lower costs.
Another area is housing. As more Filipinos move to urban areas the 6.5 million housing backlog becomes more prominent. Having decent living spaces is critical to ensure our family’s well-being. This is even more acute in areas where access to clean water is a challenge.
Innovation in the use of locally available resources and materials has the potential to boost local housing development since they can allow local houses to be built at lower costs. It is time to engage our startups to push ideas and enterprises to solve this problem
To deal with the previously discussed challenges, innovation is a key strategy, since it harnesses creativity, technology and skill and can address costs to solve problems. With this, a key enabler of local innovation is the startup community in our respective cities.
It is good that agencies such as the Department of Information and Communications Technology and the Department of Trade and Industry are identifying and mapping start-ups and organizing start-up communities. Matching them with partners, funders and financing institutions must include encouraging venture capital funds at the local level.
This, in my view, will accelerate the creation of more startups. With financial technology apps and new tools such as digital banks providing easy access to credit, I believe the future will see more startups blazing paths in innovation, solving problems and adding value to the local economy.