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1. Rapid industrial development dictates a country’s economic future, but it should not neglect its
consequences and effects on other aspects such as the environment.
2. Plastic is one of the biggest pollutants in the world today.
3. Developing countries like Thailand and the Philippines contribute greatly to the plastic pollution
problems that the world faces.
4. Innovation is necessary for a country to capitalize on the opportunities that the Fourth Industrial
Revolution (Industry 4.0) brings and to find new solutions to current socio-economic issues.
5. Countries need to intellectualize and invest in their knowledge capital to prepare their people and
industries for Industry 4.0.
6. Proper intellectualization is a matter of quality; not quantity.
7. Thailand is ready for Industry 4.0, while the Philippines still needs time to catch up.
8. The two countries are on the right track of innovation to reduce their plastic pollution output, but
there is still a long way to go.
Cover Photo Reference:
Howell, E. (2019). Blue plastic trash bags [Photograph]. Unsplash. Retrieved from
https://unsplash.com/photos/xqoco1z7mow.
Recommended Citation:
Magallanes, J., & Tañega, B. (2019). Thailand and the Philippines: Plastic pollution reduction through
intellectualization and the Fourth Industrial Revolution. (Unpublished report). De La Salle
University-Manila, Philippines.
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INNOVATION AT THE COST OF THE ENVIRONMENT
Innovation has always been a vital component of economic prosperity because an
innovative country has a better long-term economic growth potential. It leads to higher
productivity, therefore, generates greater output with less input (European Central Bank,
2017). History saw that everyone’s goal was to be at the top of their game. Nothing ever
seemed to be enough, and products could always be made in a better, faster, or more
convenient way. Take the premise of the First and Second Industrial Revolutions as an
example. In around the late 1700s, manufacturing products in Britain moved from the home
to the factory. The First Industrial Revolution (Industry 1.0) saw a lot of human capital get
replaced as machinery became a primary part of the manufacturing business. Transportation
of goods became quicker with the birth of the steam engine, which relied heavily on fuel and
coal. (Hanlon, 2016). Come the 1800s, industrialization made its way to America and other
parts of the world. This was now the Second Industrial Revolution (Industry 2.0), and it saw
the start of the factory assembly line system as a way to achieve mass production (Wilson,
n.d.). It was an age of great innovation, however, at what cost? Factories belched thick, black
smoke on a daily basis; coal-burning engines left incredible carbon footprints; and the
environment began to degrade. This was one of the first major propellers of serious pollution,
a global issue that still exists today.
In present times, one of the biggest and most popular pollutants is plastic. Plastic got
its first big break in the 1950s and is still being used everyday by billions of people because
of the convenience and multi-purposity it provides, but its effects on the environment can be
severely detrimental. By 2015, the global production of plastic was around 380 million tonnes
in just that year alone (Ritchie & Rosner, 2019).
Plastic is mostly produced in a lot of the more developed countries, however, these
countries typically have better waste management systems ensuring that their level of
mismanaged waste is low. Poorer and lower-income countries, on the other hand, end up
being the major culprits of plastic pollution––despite not being major producers
themselves––simply because of their ineffective waste management systems, with the
largest contributor of 60% to the total global mismanaged waste being the Southeast Asian
region. Two of these countries would be Thailand and the Philippines (Ritchie & Rosner,
2019).
Thailand has a pollution index of 73.91, while the Philippines has a pollution index of
74.43 (Numbeo, 2019a; Numbeo, 2019b).
A study conducted in 2010 found how much plastic each country produces in a year
as well as how much percentage of their plastic gets mismanaged (disposed in dumps,
uncontrolled landfills, the ocean, etc.). Thailand only produces around 3.53 million tonnes of
plastic a year but mismanages 73% of it, contributing 3.23% of the total global mismanaged
waste. The same study found that for the Philippines, they produce only 2.57 million tonnes a
year but mismanage 81% of it, contributing 5.92% of the total global mismanaged waste. It
was also noted that the Mekong River, which flows through Thailand among five other
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countries, and the Pasig River in the Philippines have an estimated annual outflow of 22,800
tonnes and 38,800 tonnes of plastic waste to the oceans respectively. At the rate that these
two countries currently dispose of their waste, it was projected that by 2025, Thailand would
be contributing 3.16% of the total global mismanaged waste while the Philippines would be
contributing 7.37% (Ritchie & Rosner, 2019).
Not only is pollution a threat to the environment, but it is also one heavy blow to an
economy. Countries will spend so much to keep pollution at bay. One example is how the
Philippines is reportedly spending $14 billion (more than ₱700 billion) to construct a
“pollution-free” city that will run on sustainable energy called New Clark City (Nace, 2018,
n.p.).
It is obvious that both countries are major sources of plastic pollution. This is why it is
important for policy-makers and industries alike to determine how they can innovate the
current waste management or plastic production systems in order to lessen the two
countries’ pollution output. Although, how can further innovation be achieved to help
improve the environment when it was the desire for innovation that kickstarted the pollution
problem in the first place? And if lower-income countries are the primary contributors of
mismanaged waste, what solution is there that can both reduce their pollution output and
stimulate their economic growth to ensure that an effective waste management system can
be sustained?
The answer lies in intellectualization.
KNOWLEDGE CAPITAL AND INDUSTRY 4.0
Right now, the world is experiencing the early stages of the Fourth Industrial
Revolution (Industry 4.0) or the further digitization of the Third Industrial Revolution (Industry
3.0), which first introduced computers and automation to the manufacturing process. With
Industry 4.0, communication between people and machines is enhanced. Computers are
making decisions without human instruction, and information is continuously being
exchanged and circulated through the Internet (Marr, 2018; Roblek, Meško, & Krapež, 2016).
This whole movement highlights the potential of socio-technical interaction and
technological development in economic prosperity, but since this sort of industry mainly
manages a lot of intangible inputs such as information, firms can no longer rely on traditional
means for value creation. The focus needs to be redirected to intellectualization or investing
in knowledge capitals (Cabrita, Cruz-Machado, & Duarte, 2019).
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“The cognitive skills of the “KBC [knowledge-based capital] is
population are the most essential increasingly recognised as an important
to long-run prosperity. These skills, driver of investment, innovation and growth
which in the aggregate we call the in OECD economies. The term encompasses
‘knowledge capital’ of a nation, a broad range of ideas, intangible assets and
explain in large part the innovations, including computerised
differences in long-run growth we information, scientific and non-scientific
have seen around the world in the knowledge and processes, business
past half century” methods, intellectual property, and economic
(Hanushek & Woessmann, 2015, p. 2). competencies such as firm-specific human
capital and efficiency-enhancing know-how”
(Organisation for Economic Co-operation and
Development [OECD], 2013, p. 156).
Investing in education and opportunities for research and development are two
possible ways countries can increase their knowledge capitals and, in the process, reduce
their plastic pollution output. However, it is important to understand that this can, at times, be
easily skewed. Policy-makers have shifted their focus from improving the actual quality of
education and ensuring that the skills people learn are of any value to simply remedying
“proxies related to school attainment levels.” Developed countries focus on making sure that
their people complete high school and have access to tertiary education, while developing
countries focus on granting access to education in general and ensuring students finish at
least their lower secondary schooling. This disconnect is a waste of resources because time
spent in school alone is a poor measurement of skill, especially in the international context
(Hanushek & Woessmann, 2015, p. 2).
Providing people quality education and opportunities to be trained can add to their
knowledge value because it makes them productive in their work, and it opens up room for
them to come up with their own ideas, which may then lead to further research and
innovation, thus, continuing economic prosperity. In other words, the growth of knowledge
capital can be self-sustained if people have access to further information (Hanushek &
Woessmann, 2015).
Industry 4.0 is the next big step for innovation around the world, but are low-income
developing countries like Thailand and the Philippines ready enough to operate in this phase
in order to fix their socio-economic issues like plastic pollution?
THAILAND vs. THE PHILIPPINES
Thailand is doing relatively well for a developing country. In just less than a
generation’s time, Thailand has developed extraordinarily in both the social and economic
aspect. The World Bank has even gone as far as to say that “Thailand has been one of the
widely cited development success stories, with sustained strong growth [...] particularly in the
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1980s” (The World Bank, 2019, n.p.). More than 40% of their population was able to be
uplifted from poverty in the last quarter century, and they were one of the more successful
economies following World War II (Jitsuchon, 2012).
Despite this, however, researchers and economists say that there is a possibility of
Thailand falling into a “middle-income trap,” which means they can pull themselves out of the
low-income category, but they cannot fully achieve high-income status. This is because
Thailand has been relying on the same development model for the past few years: cheap
labor and low innovation. They lack skilled laborers, and looking abroad for workers is not a
viable option because it just perpetuates their cheap labor model. Additionally, the supply of
foreign workers willing to move to Thailand will soon run short as other countries around the
world continue to progress and provide better opportunities for their own people to stay in
their home countries instead (Jitsuchon, 2012, p. 14).
Their education system also needs a lot of improvement. With the current quality of
education that the Thai government supplies, they cannot train enough skilled laborers to
meet the demands of Industry 4.0, and their graduates cannot keep up with the global
competition (Jitsuchon, 2012). In 2017, the United Nations Educational, Scientific, and Cultural
Organization (UNESCO) reported that Thailand failed to provide equal opportunities to
quality basic education to both urban and rural areas, which is an obligation that every
government has to its people. The country allocated 4% of their gross domestic product
(GDP), which was 20% of their government budget, to their education system; but it was no
use because the quality they provided still ranked below satisfactory. (Padkuntod, 2017).
Another thing is that research and development was not fully supported in Thailand.
The government had been allocating just 0.2% of their annual GDP to research and
development opportunities for years, which caused their business sector to fall behind when
compared to the rest of the world (Jitsuchon, 2012). Fortunately enough, the country now
sees the benefits of investing in research and development opportunities, and they have
made some major improvements.
They established the Asian Institute of Technology (AIT), whose responsibility is to
maintain relationships with various sectors in order to consistently update and expand the
curriculum and research priorities of the country given the constant advancements in
science, technology, development, and the environment around the world (“Thailand takes
action,” n.d.). Also, at the CEO Innovation Forum 2018 held by the National Science
Technology and Innovation Policy Office (STI), Thailand’s Deputy Prime Minister Somkid
Jatusripitak was quoted to have said that “Innovation is important to drive the country’s
competitiveness and increase GDP growth,” also recognizing the need to encourage
enterprises of all sizes, both digital and not, to engage in innovation themselves in order to
achieve sustainable long-term development (Leesa-nguansuk, 2018, n.p.). This goes without
saying that they see further intellectualization as a way to improve their international
presence.
With all of this said, what can the Philippines do to catch up?
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As one of its co-founding nations of the ASEAN organization, the Philippines had a
very similar economic starting point to Thailand during the postwar era. With the help of
America, it became one of Asia’s industrial powerhouses by the 1960s. It produced consumer
goods; processed raw materials; and had assembly plants for automobiles, televisions and
home appliances. Chemical plants produced drugs. Scrap metal was imported and made into
steel for ships and factories produced cement, textiles and fertilizer. The Philippines also
exported agricultural and mineral products, which helped maintain its growth for the
remainder of the 1970s (Hays, 2015).
Fig. 1. GDP per year (current US$) of Thailand and Philippines, 1960-2017 (The World Bank, 2017)
The Philippines had a slight head start in 1960 (see Figure 1), but for the next two
decades, both countries performed almost identically until the early 1980s. Ever since the
two economies diverged in 1983, the Philippines has failed to close the gap even up to this
day. According to De Dios (2015), the decline in the Philippines’ economy in the 1980s can be
attributed to failed policies by the Marcos administration, which forced industrialization reliant
on foreign debt. The country’s foreign debt level ended up rising from $2.1 billion in 1970 to
$24.4 billion in a span of just 12 years (Africa, 2016). Thailand, on the other hand, was export
driven and was able to curb falling into debt (Asian Development Bank, 2015). They were on
their way to becoming one of the Four Asian Tiger economies; and even after being hit by
the Asian Financial Crisis of 1997, they were still doing much better than the Philippines, who
was still recovering from the Marcos regime.
Although the Philippines’ economic performance improved from 2011-2018, Thailand
consistently ranked higher than the Philippines in terms of innovation, and that could be the
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cause for such a large GDP gap; seeing as how innovation is driven by human capital and
sufficient financing, especially in this day and age of Industry 4.0 (Nicholas, 2011).
Thailand Philippines
Fig. 2. Global Innovation Index expenditure on education and R&D (% of GDP) of Thailand and Philippines
(Dutta et al., 2018)
Fig. 3. Overview of research performance of Thailand and the Philippines, 1996-2017 (Scimago Institutions
Rankings, n.d.)
One measure that can examine a country’s level of intellectualization would be their
research output. According to the current Scimago Institutions Rankings, the Philippines
ranks 14th in Asia and 68th in the whole world in terms of overall research performance,
analyzing their research output from 1996 to 2017. On the other hand, the Thailand ranks 9th
in Asia and 42nd in the whole world. In a study conducted by the Foreign & Commonwealth
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Office (FCO) of the British Council (2015), it was found that in 2013 alone, the Philippines
published over 1,500 academic papers. In relation to Thailand’s performance, this is very low
given that Thailand published over 11,300 academic papers in just that same year.
Additionally, Thailand’s scope of research specializations spans across a total of 40
institutions, earning the country the highest ranking in all of Southeast Asia, while the
Philippines ranked last with just 11 institutions. UNESCO also says that there is a
recommended ratio of researchers in a country to its population, which is 380 researchers
per 1 million people. As of 2013, while Thailand is healthily above this recommended ratio at
974 researchers per million, the Philippines does not reach the quota, sitting at a meager 189
researchers per million (Ambag, 2018).
The year 2013 saw the highest allocation of 0.138% of Philippine GDP to research and
development projects in the past decade or so. The lowest it has ever been within the same
period was 0.110% in 2007 (“Philippines – Research and development,” n.d.)
Fig. 4. Gross enroll ratio in tertiary education of Thailand and Philippines, 1971-2014 (The World Bank, 2017)
Comparing the education systems of the two countries, although Thailand may be
underperforming in this sector, they are still doing much better than the Philippines. Over half
of Thailand’s population was enrolled in tertiary education in 2014, an increase of around
50% since 1971 (see Figure 4). Meanwhile, in the last 43 years, the overall growth of the
Philippines’ gross enrollment ratio in tertiary education has remained a below 20%. In 2014,
only 35.75% of its population was enrolled in tertiary education. Furthermore, the share of the
population that has completed tertiary education for Thailand has been on an increasing
trend with over 10% of its population having completed tertiary education. On the other hand,
the number of tertiary graduates in the Philippines have been on a steady decline since 1980
(see Figure 5) (The World Bank, 2017).
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Fig. 5. Share of the population with completed tertiary education of Thailand and Philippines, 1970-2010 (The
World Bank, 2017)
Although the facts and figures show proof of growth, again, it is important to
emphasize that it may not be enough to fully realize the kind of growth they are looking for.
They cannot simply provide more years of education or spend more money on research and
development projects to improve their knowledge capital and prepare for Industry 4.0. The
two countries must also look into quality, which is why they have developed new industrial
strategies to still meet their goals and capitalize on the development happening all over the
world.
Thailand has Thailand 4.0, a strategy with which the Thai government aims to utilize
technology and innovation to boost their economic prosperity. They plan to turn their labor
force into “knowledge workers,” improving the quality of their education and training more
researchers in order to keep up with the technological advancements happening across the
globe. As mentioned earlier, Thailand’s government encourages the involvement of
enterprises of all sizes to engage in digitization in their processes. The country has around
2.7 million small and medium-sized enterprises (SMEs) that account for 98% of their total
businesses and 37% of their GDP. With Thailand 4.0, their government plans on establishing
digital parks or clusters that can improve information and communication technology (ICT)
between these SMEs, and they have already started executing this by admitting more than
6,000 computer studies graduate students in Thai institutions for further training. The country
expects that improving ICT can help them fulfill Thailand 4.0 because research has found
that just 20% investment in ICT can already increase their GDP by 1%, competitiveness by
2.1%, innovation by 2.2%, and productivity by 2.3% (Jones & Pimdee, 2017). With all this, it is
safe to say that Thailand is fairly ready to keep up with Industry 4.0.
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The Philippines, on the other hand, has the Inclusive Innovation Industrial Strategy
(i S), which was developed by the Department of Trade and Industry (DTI) (Aldaba, 2017). As
3
a developing country, the capacity to keep up with the coming Fourth Industrial Revolution
depends on two things: access to foreign technology and adaptability. Things like trade,
foreign direct investment, and internationalization are merely transmission channels of
monetary policy; but government policies and stock human and knowledge capital are the
real factors that determine the Philippines’ readiness and capacity to utilize new technology
(Albert et al., 2018). Unlike Thailand, which is already relatively advanced compared to the
Philippines, a lot of the current Philippine industries are still transitioning from Industry 2.0 to
3.0. Therefore, the focus of i3S is to prepare the country for Industry 4.0’s full effect by
improving human capital and creating more jobs (Aldaba, 2017). Furthermore, the DTI plans
to collaborate, not just with industries, but also with the academe to promote an inclusive
entrepreneurship and innovation system within the country. To do this, the i3S plan includes
creating relevant education and training curricula, adequate funding and financing projects,
and accessible support services for the country's innovators and entrepreneurs. This
partnership could help solve the industries' technological issues whilst benefiting innovators
financially and commercially (Department of Trade and Industry [DTI], 2017). However, it is
clear that the Philippines must work on a number of things before they can confidently keep
up with the changes to be brought about by Industry 4.0.
PLASTIC POLLUTION REDUCTION EFFORTS THROUGH
INTELLECTUALIZATION
With all the plans that both Thailand and the Philippines have for the foreseeable
future, solving their plastic pollution problem is not impossible. As a matter of fact, each
country has already begun studying possible alternatives in order to reduce their plastic
waste and innovate their waste management systems, ultimately proving the significance and
potential of investing in knowledge capital in the resolution of the long-running pollution
problems that have been affecting both countries. Seeing as how rice is one of the biggest
products of Thailand, as an agricultural country, the country’s Ministry of Industry and Plastic
Institute started the “Rice Resin Project.” They have found a way to create bioplastic from
fermenting rice bran and rice hull. Also, further investing in bioplastic research gives the
country a competitive advantage over other players in the global bioplastic industry (Chaisu,
2016). Similarly, the Philippines has also started looking into possible bioplastic alternatives.
Researchers from the Philippine Science High School found that cassava starch is a viable
candidate for a source of biodegradable plastic (Girao et al., 2012).
If all goes according to plan, both Thailand and the Philippines can obtain sustainable
economic growth and reduce their plastic pollution output, ultimately reducing the pollution
problem that affects the entire world. Pollution may not be solved completely by the efforts of
two small countries alone; but with continuous effort and innovation through
knowledge-based industries, the efforts of these two small countries can eventually magnify
into something greater.
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