“Seventy-three percent of Philippine business firms are led by or have women occupying senior leadership positions, which implies that at least 50% of the owners are female. We found that Philippine firms led by women are more likely to adopt product and logistics innovations. Moreover, firms where women make up the majority in management, administration, and in sales, are more likely to adopt innovative methods of production, as well.”
These were among the results from "Women-led Firms and Innovation: Evidence from Philippine Enterprise Survey" presented by Assistant Professor Imee Marie Acopiado of the University of the Philippines (UP) Mindanao School of Management in the online forum “Towards Creating Impact: UP Mindanao-funded Research” held on 20 April 2022.
As background, the World Economic Forum’s Global Gender Gap 2021 report had showed that The Philippines’ Gender Gap Index of 0.784 ranked 17th in the world, and second in the Asia-Pacific region. This value, between 0 to 1, is based on measures in health, education, the economy, and politics, where 1 indicates full equality for women.
On the other hand, The Philippines ranked 50th in the global innovation index. Hence, leading the research team—composed of SOM faculty members Jon Marx Sarmiento, Thaddeus Acuña, Glory Dee Romo, and Acopiado—to explore the link between women-led firms and innovation.
The research team looked at 497 samples among the 1,335 firms that participated in the World Bank’s Philippine Enterprise Survey in 2015. The effects of women's participation, particularly in the manufacturing and services firms, were analyzed using four models of firm-level innovation: 1) products or services, 2) methods of production, 3) logistics, delivery and distribution, and 4) supporting services.
While women in leadership, sales, and management roles leads to more innovation, a high number of women involved in a firm’s supporting activities showed slow innovation growth. These support activities are the production lines, maintenance systems, purchasing, accounting and, computing operations. “Firms may need to focus on increasing the participation of women involved in support services in providing innovations,” Prof. Acopiado said.
Other drivers of innovation in business firms include the share capital of the largest owner, having a foreign-owned licensed technology, the annual sales, the direct exports, material inputs of foreign origin, the number of non-production workers, the firm’s capacity utilization, and its hours of operation, the study concluded.