Report: Observational Study Mission on Innovation and Competitiveness in SMEs, August 25-25, 2015, Republic of Korea

Participants holding APO certificates

Participants holding APO certificates

The Observational Study Mission on Innovation and Competitiveness in SMEs underscored the importance of innovation to the success of SMEs, faced with increasing technological complexity and global competition. SMEs play significant role in the growth of many developing countries. Being the backbone of many economies, SMEs contribute to stimulating gainful employment and generating export products. Thus, building a culture of innovation in SMEs will translate to a more productive and competitive economy.

This four-day activity was aimed at accomplishing the following objectives:

a. To understand innovative strategies for SMEs;
b. To share best practices and initiatives by successful SMEs to promote innovation;
c. To learn how to create and develop innovative and creative culture in SMEs to enhance competitiveness in the market.


B. Nazareth-Manzano, CESO II, DOST Region 9

One of the flagship programs of the Department of Science and Technology is the Small Enterprise Technology Upgrading Program or SETUP. This is a nationwide strategy that assists and encourages Small and Medium Enterprises to adopt technology innovations in order to improve their productivity and enhance competitiveness. Since its implementation in early 2002, the program has provided interventions to over 20,000 SMEs including the microenterprises nationwide, ranging from productivity enhancement, product quality improvement, human resource development and streamlining operational efficiency.

Building a culture of innovation among SMEs is one strategy to sustain a program such as SETUP. Hence, my objective of participating in this Study- Mission was to learn some feasible approaches in developing an innovative and creative culture in SMEs. I expected to gain exposure and broaden my perspective on the strategies for innovation. I also expected to learn from the best practices of participants in promoting innovation.


There were 17 participants representing 13 member-countries of APO; ten (10) of which were male and seven (7) females. The Philippines had two (2) participants, each representing the private and government sector, to wit:

Production and Operations Management Association of the Philippines (PROMAP)

Ms. Brenda L. Nazareth-Manzano
Regional Director, Department of Science and Technology – Region 9


The general coverage of the Study-Mission included the philosophy and concepts of innovation, methodologies for developing innovative strategy and creative culture in SMEs. These were carried out through lectures (2 ½ days), site visits (1 day), country paper presentations (1/2 day) and interactive discussions (all through-out the sessions).


Topic: Productivity and Innovation

Resource Speaker:

Mr. Yasuhiko Inoue
International Cooperation Department
Japan Productivity Center

Topic: Key Attributes and Practices of Innovative and Competitive SMEs

Resource Speaker:

Mr. George Wong
Managing Director and Principal Consultant
Hocklink Systems & Services Pte. Ltd.

Topic: Korean Story of Innovation and Competitiveness in SMEs: The Samsung Story

Resource Speaker:

Mr. Byung Joon Kim
Representative Consultant
Asia Management Consulting

Topic: The case of Jason Electronics LTD of Singapore

Resource Speaker:

Mr. Ronald Tan Lian Huat
Chief Executive Officer
Jason Electronics (Pte) Ltd

Topic: Korean Economy and SME Policy

Resource Speaker:

Mr Dong Sun Kim
Former Administrator
Small and Medium Business Administration

Topic: Becoming Innovative and Competitive SMEs; service innovation, Business Excellence and Benchmarking Innovation and Quality Teams

Resource Speaker

Mr. George Wong
Managing Director and Principal Consultant
Hocklink Systems & Services Pte. Ltd.


Samsung Innovation Museum:

o A display of the history and future of innovations
o Articulates culture thru inspirational and motivational mottos: smart working; endless innovation
o Gives an impression of a happy and good work environment
o Corporate Social Responsibility (CSR) – different approaches/programs depending on the needs of the community (continent): In Africa, rolling internet school; Samsung Vocational school;
o Generates ideas for innovation thru Mosaic, a virtual suggestion box; employees can submit comments/suggestions; management team addresses and takes action
o C-Lab – handles new technical ideas from employees in a competition; the top 5 best ideas were given financial support to start-up.
o It is evident that Samsung does market segmentation well and launches products that meet market requirements (example is the 2 basket type washing machine)
o Industrial cooperation – Samsung doesn’t look at competitors as competitors but as partners and friends
o The museum is safety conscious- has an emergency evacuation plan and communicates this to visitors at the start of every video or film-showing.

RP Corp – a pharmaceutical firm

o Observes Good Manufacturing practices (GMP) and 5S.
o Vision, Mission and Core Values are clear; posted at a bulletin board (a way of communicating it to the employees)
o It is evident that RP Corp does Strategic Planning well and has a strategic roadmap
o Follows a systematic innovation process
o Has a systematic approach in selecting innovation projects (e.g. case of Choline alfoscerate); makes use of data and information
o Management lends strong support to innovation projects; staff and CEO drive innovation.
o Captures customers’ requirements and expectations (VOC) as well as business/stakeholders’ needs and requirements (VOB) – serve as the guide in doing product improvement
o Rewards employees who surpass targets (medals, bonus)
o Has in place good practices on engaging employees.

e-government of Korea

o Impressive program; received awards and citations for best practices
o Integration of whole of government information systems was challenging but can be done! (GIDC)
o 20 e-Government Best Practices, many of which have been shared internationally
o Forward-looking – future directions are clear
o Success factors: strong government leadership; Aggressive financial support; Clear mid and long-term plans; Receptive culture; Excellent infrastructure (fixed and wireless); ICT industry;

Learning from the visits:

 Adopting the Business Excellence Framework is key towards innovation initiatives.
 Sustain what you have started!
 Top management commitment is critical; buy-in of workforce is essential.
 Take care of your workforce; attend to their development, well-being and satisfaction!


The study-mission was well organized in terms of the duration and topics covered. The speakers were excellent and unselfishly shared their knowledge on the topics assigned to them.


B. Nazareth-Manzano, CESO II, DOST Region 9

I am now conceptualizing a project that will level-up our Small Enterprise Technology Upgrading Program (SETUP). The idea is to make available innovation fund that MSMEs may tap to translate ideas into new products or processes. Strong collaboration with academe may also be necessary.

I will make an echo presentation to my fellow directors and highlight the learning gained from the study mission.

I will also organize an innovation summit for MSMEs (either in November this year or February next year) where the Business Excellence Framework will be introduced.


Regional Director
Department of Science and Technology – Region 9


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