Press Release
November 25, 2010

Strengthening Korea-Philippines Development Cooperation
through the Multi-Industry Clusters (MIC) Project

Korea-Philippines MIC Development Cooperation Forum
25 November 2010, JW Marriot Hotel, Seoul

Senator Edgardo J. Angara
Keynote speech

With sweeping changes in the architecture of the global economy, industry clusters are now becoming more and more recognized as a paradigm for job growth and economic development.

Multi-Industry Clusters (MIC) are networks of interconnected, geographically concentrated businesses in the same industries. The MIC approach supports the creation of regional innovation clusters that leverage regions' existing competitive strengths.

This strategy also promotes networking among local enterprises, buyers, input providers, local policy makers, the academe, research institutions and other industry stakeholders.

Even the Obama administration adopts the idea of MIC. The US budget proposal for FY2011 includes several initiatives to support regional industry or innovation "clusters". It has proposed $50 million in planning and matching grants to be allocated on a competitive basis to local governments that support initiatives in knowledge-sharing, workforce training, or marketing.

Although MIC is an emerging and relatively novel initiative, the theory behind it is nothing new. The classic economic argument is this: through easier access to shared ideas and skills, clusters can produce common benefits that no single company can expect to capture by itself. This makes the common benefit larger than the private costs.

Industry clusters can produce innovation and technological breakthroughs through training and R&D projects, which may be costly for one company but more manageable if more companies collectively pursue it.

In the Philippines, MICs are identified as a major strategy for countryside development and is seen as a focused approach in investment promotion.

The primary lesson of MICs is that the strength of a national economy is reflected by the strength of its regional economies. In a developing economy like ours, it is not enough that progress is concentrated on the National Capital Region. We need to accelerate development to the countryside as well.

This is why the grant from Korea to study the feasibility of MICs in the Philippines is a necessary and fundamental step to improve symbiosis between similar but distinct industries that operate in various regions and economic zones across the Philippines.

It is also a welcome assistance to first study the effects of these clusters in our agriculture sector, and linking them to potential industries.

South Korea's success with MICs has led to productive synergism between agriculture, infrastructure, manufacturing and knowledge-based industries. In the Philippines, we expect the MICs to lead to increased farm production, along with the emergence of manufacturing sectors, increased employment and a more robust rural economy.

I believe that building MICs across the archipelago will lead to increased productivity, as well as boost the growth of small and medium enterprises.

One industry worthy of MIC investment is the Philippine mariculture industry.

The Philippines is a prime spot for investment in mariculture and fisheries because it has large pockets of production and it is strategically located at the crossroads of international export lanes.

Overall, the Philippines is the 6th top fish producing country. We are 9th globally in terms of aquaculture production and the 3rd largest producer of seaweeds.

In my home province Aurora, we have setup within the Aurora Pacific Economic Zone (APECO) a Mariculture Park that promotes fish cage farming to culture milkfish and other economically viable species such as grouper, siganids, and snapper, thereby sustaining our seas' productivity and arresting resource depletion.

The MIC and Agricultural Cooperation between our two countries can become a catalyst for agro-forestry and industrial development, which when realized can ensure food security for both Korea and the Philippines.

It can stimulate the growth of a cluster of agriculture and food-processing industries employing clean technologies. I note, in particular, the efforts of former Korean Ambassador to the Philippines, Ambassador Choi, who has originated this groundbreaking initiative.

This can be expanded to become a wider program of sustainable development of our natural resources.

I hope that this is just the starting point of a long and fruitful cooperation between Korea and the Philippines towards our common goal of national development and growth.

Thank you.

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