Philippines - Second Engineering and Science Education Project

Report No. PID7184 Project Name Philippines-Second Engineering and Science... Education Project Region East Asia and Pacific Sector Education Project ID PHPE53223 Borrower Government of the Philippines Implementing Agency Department of Science and Technology Gen. Santos Ave., Bicutan, Taguig, 1604 Metro Manila Tel: 632-837-0758 Fax: 632-838-9080 Date PID Prepared December 1998 Projected Appraisal September 1999 Projected Board Date February 2000 Background 1. Country and Sector Background. Although the importance of technology is widely recognized, the technological capabilities of Science and Technology (S&T) manpower in the Philippines are well below those of its neighbors, especially Korea, Singapore and Malaysia. The poor performance reflects underinvestment in capital, both human and physical. International indicators show that the Philippines is not well-endowed with S&T skills, which is currently around 1.5 per 10,000 of the population compared with Korea which has 35 per 10,000. The existing pool of labor trained in S&T is inefficient and inadequate vis-a-vis the needs of an evolving industry with high potential for technological innovation and development. In 1994, the Philippines invested 0.2 percent of its Gross National Product on Research and Development (R&D) compared with nearly 2.1 percent in Korea and a full three percent in Japan. Policies are being implemented to raise the output of scientists and engineers as well as to strengthen R&D activities. Major issues specific to the Philippines higher education system stem from under-investments in both human and physical capital. More specifically the issues relate to: (i) inadequate and inefficient science and technology education compared with other disciplines as measured by dropout rates, failures, and post-graduate on-the-job training required to compensate for deficiencies in undergraduate training; and (ii) limited public sector investment, particularly in high cost disciplines such as natural sciences, engineering and technology. In response to social demand and relatively small public sector provision of higher education, numerous private institutions have been established. Of an estimated 1.5 million students in some 1,400 post-secondary institutions, about 73t are in private schools. Heavy reliance on private funding, combined with students' interest in higher education primarily to obtain educational credentials over a short period of time has led to the proliferation of low cost and low quality job-oriented undergraduate programs in fields such as accountancy, engineering, nursing and teaching; (iii) low demand for more costly natural sciences disciplines, and graduate education and research, where social benefits tend to outweigh private benefits; and (iv) the ability of faculty in engineering and science  programs to carry out their responsibilities of curriculum development, teaching and research is severely hampered by three serious limitations: the low level of their educational qualifications and professional experience; the heavy workload; and the high student-faculty ratio. Timely adjustments to improvements in industrial technology is essential to the Philippines' competitiveness in the international market. Concerned with the general state of national S&T capacity, the Government adopted policies in 1987 to establish a long term plan for S&T development, giving high priority to: the promotion of R&D in S&T; the strengthening of engineering and science education, training and technology management services; and the support of indigenous, appropriate and self-reliant S&T capabilities. 2. Objectives. The overall objective of the proposed project is to improve the performance of the S&T sector by promoting scientific research and technological innovation, and increasing the supply and quality of S&T manpower. To accomplish this objective, the project would: - strengthen the managerial capacity of the Department of Science and Technology (DOST) in areas of S&T policy formulation and development, planning, programming, monitoring and evaluation. - strengthen research capabilities in selected industrial technologies, and - improve the quality of engineering and science education in selected institutions to support the government's long-term goal of strengthening technological capability. 3. Description. The project would have four components: a) strengthening DOST's capacity in management of technology; b) strengthening research capabilities in selected industrial technologies; c) upgrading the capacity of science and technology manpower; and d) project management. Strengthening DOST's Capacity in Management of Technology This component would strengthen the overall capacity of DOST and industry associations in S&T development. The main elements would include: a) Staff development. The staff development programs would include local M.Sc scholarships, foreign Ph.D. fellowships and short-term local and overseas training for DOST, the Commission on Higher Education (CHED), the Department of Trade and Industry (DTI) and the National Economic and Development Authority (NEDA) staff, and industry association representatives in the following areas: S&T policy analysis; planning, forecasting and assessment of technology; formulation, implementation and monitoring of S&T strategies; scanning and monitoring world technological trends; S&T management, and management of information systems. Consultants would assist in planning/implementing training programs, workshops/seminars for stakeholder staff and revenue generating seminars for industry. b) DOST information system Management information system. To raise the effectiveness of DOST, the project, in coordination with the staff development program, would provide - 2-  DOST-wide information systems (hardware and software), training and orientation seminars, and local and foreign consultancy services. Technical information system. In order to strengthen DOST's capacity to effectively utilize the electronic library network established under ESEP I, the project would finance the procurement of equipment and the training of library and information management staff. Because of DOST's large collection of S&T materials, it is well placed to provide cost-effective services to members of the library network, private industries and academic institutions. c) Quality assurance in engineering and science education. As the lead agency in S&T, DOST, in cooperation with CHED, professional associations, the Philippines Technological Council and the Professional Regulation Commission, would develop mechanisms to ensure the quality of graduates of the engineering programs. The proposed project would fund the development and application of the Peer Evaluation Process (PEP) to science and engineering programs. The process adopted by the Foundation for Engineering Education Development (FEED) would be developed into a national accreditation system for engineering programs countrywide. A possible accreditation system for scientists would be explored. The project would finance consultant services and study tours for relevant stakeholders to familiarize them with accreditation and licensing systems in other countries. B. Strengthening Research & Development Capacities in Selected Emerging Technologies The capacity of industries and service enterprises to gain competitive advantage in export markets depends on their ability to adapt and manage advanced technologies effectively. The proposed project would support the establishment of a framework to facilitate the effective and sustainable participation of key stakeholders (academe, private sector and government research and development institutes - RDIs ) in joint programs and activities that promote applied R&D and technological innovation in targeted technologies. The proposed mechanism for doing this is the Virtual Center of Advanced Technology or VCAT. The VCAT is a virtual center that uses the physical and technological resources of the three stakeholders concerned to advance the state of technological development in a targeted technology. The mandate of the VCAT includes the delivery of revenue-generating applied research and technical services to industry. The technical services would include information, R&D, and education and training. These services are designed and delivered on the basis of identified needs in industry. The VCAT, as a virtual institution, involves relatively small capital investment and limited staff. A small VCAT secretariat would be housed in the premises of a flagship university or RDI. The stakeholders would be electronically networked through an Intranet, and connected to the Internet and other relevant databases. All stakeholders would contribute to the startup cost of the center, and share in the benefits and revenues generated from information, education, training, and R&D services. In order to support the flagship institutions and selected RDIs, enhance their capacity to deliver the diverse range of VCAT's services to industry, and implement an effective and collaborative R&D program, the project would support: -3-  a) Staff development. To improve the quality of scientists and engineers in engineering and science departments in flagship institutions and RDIs associated with the VCATs, the project would finance studies (long-term feasibility studies for the VCATs), sandwich Ph.D. fellowships, short-term post-doctoral fellowships, R&D short-term training/study tours to other similar centers, and consultant services. The selection of candidates would follow eligibility criteria, award conditions and selection processes satisfactory to the Bank and the stakeholders. Workshops/seminars for local tripartite participants dealing with specific technical subjects would also be funded by the project. b) Research facilities. In order to stimulate collaborative research interests among the stakeholders, the selected engineering and science departments in flagship institutions and RDIs (and possibly in private sector premises) would be provided with up-to-date advanced laboratory equipment. The shared equipment would be installed in the selected departments and would be designated to support the design and delivery of integrated services to industry and government and the R&D agenda of the VCATs. To ensure that the new equipment to be provided under the project would be adequately accommodated and maintained, the project would refurbish the laboratories of the selected departments in the flagship universities associated with the funded VCATs, and finance equipment-related O&M. Refurbishment activities would not involve land acquisition or resettlement. The Government would be asked to present, for the Bank's review, a plan for the refurbishing of physical facilities including the timing of construction and its linkage to equipment procurement. c) Research support. To promote the R&D activity of the VCATs, collaborative research projects would be financed under the project. These research projects would focus on topics related to the key technology areas and identified industrial demand. DOST would prepare the terms of reference for the appointment of an Experts Panel. The Panel would include international experts from counterpart centers and would be responsible for establishing guidelines for the coordination, evaluation and approval of research projects submitted by the VCATs. The results of all projects would be widely disseminated. DOST would continue to use its Grant-in-Aid funds for research support. Consultants would assist the VCATs in the selection, design and implementation of their respective collaborative research projects. C. Upgrading the Human Resource Capacity in Science and Technology. This component would continue to broaden and upgrade the science and engineering human resource base and expand its coverage to regional institutions with growth potential, and further strengthen the key institutions to become active participants in the VCATs. The strategies include: a) strengthening engineering and science education in priority fields in selected institutions, b) encouraging the formation of consortia and establishing ties with flagship institutions and VCATs, and c) improving the quality of science and math teaching at the secondary level. a) Engineering education. The project would support selected engineering colleges for faculty development (local and foreign M.Sc scholarships, local Ph.D. scholarships, "sandwich" Ph.D. and post-doctoral fellowships), short- term training/seminars, expert services, curricula improvement through - 4 -  university-industry and international linkages, upgraded laboratory equipment, equipment-related O&M, library holdings and renovation of facilities. Development of these institutions would be complemented by support for the establishment of a university-industry linkage program through the VCATs. The project would finance scholarships to upgrade the quality of engineers in industry and R&D institutions, and encourage new graduates to pursue further training in key technologies both locally and abroad. Financial support would be provided for the expansion of consortium universities offering Master of Engineering programs outside the National Capital Region. b) Science education. The project would finance faculty development (local and foreign M.Sc scholarships, local Ph.D. scholarships, "sandwich" Ph.D. and post-doctoral fellowships), short-term training/seminars, expert services, laboratory equipment, equipment-related O&M, and renovation of selected science colleges to: a) strengthen undergraduate and graduate education in priority fields, and b) to develop research capacities and linkages with industry. As in engineering education, the project would finance scholarships to scientists in industry and R&D institutions and new graduates to receive further training in science, both locally and abroad. c) In-service teacher training. Improving the quality of science and engineering education is critically dependent on science and math preparation of incoming students. In order to achieve this objective, the project would continue (as in ESEP I) to provide training for science and math teachers. An in-service training program of at least 180 hours will be administered by DOST through the Regional Science Teaching Centers in coordination with the Department of Education, Culture and Sports (DECS) and CHED. The training program would be conducted in identified training centers. D. Project Management and Monitoring and Evaluation a) Project management. The Project Implementation and Coordinating Office (PICO) established under ESEP I would be maintained to assist DOST in the implementation of the proposed project. The terms of reference for the PICO would be revised, to include representatives from industry and universities in order to strengthen the tripartite linkages. Consultants in the areas of project management, procurement, disbursements, and financial management would be recruited to assist PICO in carrying out its responsibilities. The project would finance the PICO staff development, incremental salaries, and the procurement of necessary office equipment (computers, printers, copying machines). b) Project Advisory Group (PAG). The project would continue to finance the activities of an expanded PAG that would advise the Steering Committee (para. 5) on technical issues, define selection criteria for VCATs and university departments of science and engineering, and monitor/evaluate project implementation. c) Monitoring and evaluation (M & E). In order to effectively monitor implementation progress and evaluate project outcomes, an appropriate system would be established in each VCAT and project institution. A central M&E capability would be developed in PICO. Consultant services would be financed to provide technical assistance to set up the system, monitor project implementation and undertake periodic evaluation of results. - 5 -  4. Financing. The preliminary estimated base cost of the project is around US$150 million and the contingencies are estimated at 20%. The proposed project is expected to be financed by an IBRD loan covering 80% of the total project cost, net of taxes and duties. The Government and the private sector would jointly finance the remaining 20%. The industry sector is expected to contribute at least 30% of the total cost of government-industry-academe collaborative projects. Private universities would be responsible for financing the salaries of substitute teachers and new faculty, and incremental O&M expenses. Private universities, which would qualify as new/additional recipient institutions, would be responsible for a proportion of the cost of equipment provision. 5. Implementation. The lead agency for project implementation would be DOST as in ESEP I. Preparation and implementation would be overseen by a multi- agency, high-level Steering Committee. To assist the Steering Committee, a Project Advisory Group (PAG) would be established to provide expert guidance (as found in ESEP I). However, the composition of the groups would also include S&T experts in government, private sector and academe. The working- level DOST/CHED/DTI/industry/academe team would coordinate project preparation and identify key technology areas for the development of the VCATs. DOST, assisted by DECS and CHED, would select the project institutions to be included in the third component on the basis of agreed criteria. The short- listed centers and institutions would receive assistance from DOST to prepare a detailed 5-year plan for the development of their network and work programs. The institutional linkages between selected VCATs, industry and government research institutes would be emphasized throughout. Implementation would be phased over a five-year period. 6. Sustainability. To sustain long term economic growth, industry must move up the technology chain to higher value added, more technology intensive production. The GOP recognizes that to achieve this goal, S&T policies must be strengthened, R&D capacity upgraded and S&T education improved. The high priority GOP is giving to these objectives will help to ensure the sustainability of the project's outcomes. Furthermore, the project implementation agency, DOST, has gained valuable experience through implementation of ESEP I. With support from the Steering Committee and PAG, DOST will be in a strong position to deliver effectively the inputs necessary to ensure that the planned outcomes of the project are achieved. 7. Lessons Learned from Past Operations in the Country/Sector. Lessons learned from previous Bank-support S&T projects in the Philippines (ESEP I - Loan 3435-PH) and in other countries relevant to the proposed project include: - Lessons learned from ESEP I: Improving Assessment of Project Outcomes: The performance indicators used under this project were essentially input and/or process indicators. They were not designed to measure the impact of the project on financial and resource management in S&T teaching (internal efficiency) or improvements of the country's industrial and technological capabilities (external efficiency). Under the proposed project, different indicators will be developed to measure the long-term impact of the investments. An evaluation of the use of scholarship funds and the deployment of returning scholarship recipients in teaching, research or industry will be conducted, as will an assessment of the impact of improved laboratories and equipment on the quality of graduates, and their employability. - 6 -  Lessons learned from projects in other countries: (a) clear objectives must be established for including institutions in the project and for deciding on research projects to be financed, in order to create a selection process that stakeholders see as equitable and in which private institutions are more apt to participate (Korea: Universities S&T Research Project, Operations Evaluation Department Report No. 15754); (b) close coordination is needed for specific tasks related to subcomponents (preparation plans through ICR) for multi-ministerial initiatives like science education (Korea: Program for Science and Technology Education, OED Report No. 9569); the remaining three relate to Brazil: Program to Support Scientific and Technology Development I & II (PADCT I & II): (c) macro economic stabilization must occur before the productive sector will invest in R&D. PADCT I & II were implemented during a period of persistent high inflation and macroeconomic imbalance. Firms could earn high returns on liquid assets and therefore had no reason to undertake riskier investments in R& D; (d) specific incentives targeted to firms must be in place to induce private sector cooperation and cofunding of R&D activities. PADCT I & II did not achieve significant private sector involvement in setting research priorities and directions or in executing research, in part because firms, which usually are unaware of the benefits from R&D, were not offered any direct incentives to change their behavior; and (e) flexibility should be given to the agency involved in disbursing project funds to researchers and strict performance criteria should be followed. Fragmented funding and excessive bureaucratic control of resources create delays that impede high- quality research. These lessons have been incorporated in the design of the proposed project. 8. Poverty Category. Although poverty alleviation is not an explicit objective of the project, the strengthening of S&T policies and the upgrading of S&T education would assist in raising the growth potential of the economy. In turn, this would increase the demand for labor, thereby offering greater employment opportunities to poverty groups. 9. Environmental Aspects. Environmental Category: C. 10. Program Objective Categories. EA 11. Contact Point The InfoShop The World Bank 1818 H Street, N.W. Washington, D.C. 20433 Telephone No. (202)458 5454 Fax No. (202) 522 1500 Public Information Center The World Bank 23rd Floor, The Taipan Place Building Emerald Avenue, Ortigas Center Pasig City Manila, Philippines Telephone: (63-2) 637-5855 Fax: (63-2) 917-3050 Note: This is information on an evolving project. Certain activities and/or -7 -  components may not be included in the final project. Processed by the InfoShop week ending December 18, 1998. 1/ In addition to the RDIs under DOST such as Advanced Science and Technology Institute and ITDI, RDIs belonging to other relevant government departments such as DTI, the Department of Energy and Natural Resources, the Department of Health, and the Department of Agriculture would be considered as potential partners. 2/ It may be possible to group closely related technologies together, for example, biotechnology with environmental technology, advanced materials science and technology with automated manufacturing technology, and electronics technology with information technology. One advantage of such grouping is the broad coverage of activities, spanning the spectrum from the upstream end of capacity building emphasized in the universities to the downstream end of application required by the industry and government sectors. 3/ The financial sustainability of the services provided by the VCATs can be ensured through the adoption of a client- oriented, market-based approach to the design, delivery and marketing of these services. 4/ A network within the region would be organized involving the Regional Science Teaching Centers, CHED Centers of Excellence, Teacher Education Institute and ESEP tertiary institutions with the cooperation of DECS leader schools 5/ The Steering Committee would provide policy directions and ensure the cooperation of all sectors. It would be headed by the Secretary of DOST. -8 -