Structural Change, Industry Transformation and Economic Development in the Philippines: An Evolutionary Appraisal

Abstract

The aim of this thesis is to show that Philippine’s economic development grows and develops by a process of structural change that is brought about by the introduction of innovation and technology transfer into an industry. Theoretical Chapters 1 - 3, in accordance with the overwhelming body of economic theory, innovation will be used as the driver of structural change. However, when applying the theory to Philippine telecommunications, Chapters 4 - 8, the term technology transfer will be used. Innovation and technology transfer transform an industry’s pattern of inputs by reducing the primary inputs by more than the increase in intermediate inputs normally associated with the increasing roundaboutness of production. Structural change therefore leads to an increase in the industry’s productivity reflected in an increase in the unit operating surplus, enabling the industry to significantly increase output without increasing costs. In this way economic development can be seen as an increase in output together with a change in the way that output is produced. The approach adopted in this research program was to outline the change in sectoral output over the period 1970 to 2007 and determine where structural change occurred. The use of Input-Output tables as well as individual industry analysis occasionally required the use of data outside the sectoral timetable from 1967 and up to 2010.