From solar mobile phone chargers to home security devices, Vince is always creating something. Vince loves to tinker on electronic parts and products. He creates useful and innovative products out of electronic kits he finds online. He’s often into something like disassembling gadgets and putting the parts back together again.

In a brief chat one afternoon, Vince revealed that he dreams of having his own startup company. However, he does not have the capacity to fund his projects and the network to help him get a head start.

With the inception of Republic Act 11337 better known as the Innovative Startup Act, Vince can finally find government support to help him jumpstart his innovative ideas and have his dream actually come true.

If you happened to see the Netflix series “Startups,” these are typically individuals or groups called founders who initially have innovative ideas to help solve particular problems. Founders usually develop the product prototypes with supervision from a mentor who then help them develop the business model to add value to the product.

The prototype and its ancillary business model are what attracts investors who offers founders the necessary support to further develop the product and advance it to commercialization stage.

The process is a slow burn and can take a long period of time; the fastest could be about three years or in some instance can even be longer. Hence, the need for support to sustain its development to scaling up and finally becoming an established company.

In reality, without the financial support startups usually have high failure rates and its outcomes usually are uncertain brought about by the different levels of innovation and market acceptability.

To help local innovators succeed in this very challenging and competitive environment, the Startup Act will help cut the regulatory barriers and provide incentives to support its growth especially in its crucial stage of development. Thus, the provisions under the Act is expected to encourage more innovators and startup enablers to boost innovation in the Philippines.

To fuel the engine of the Startup Act, three key government agencies such as the Department of Science and Technology (DOST), Department of Information and Communications Technology (DICT), and Department of Trade and Industry (DTI) banded together in synergy to steer the growth of startups. 

Now, to operationalize it, the three government entities came up with a Joint Administrative Order to concretize their support to startups. Among the key features of the Startup Act are as follow:

1. Streamlined business registration

DTI is tasked to streamline the registration process and related levy fees that comes with forming a startup business. It is also tasked to establish a one-stop shop, end-to-end registration called the Startup Business One-Stop Shop or Startup BOSS in accordance with Republic Act 11032 otherwise known as the Ease of Doing Business and Efficient Government Service Delivery Act of 2018, and other similar laws.

It also offers “full or partial subsidy for the registration, cost in the application, processing of permits and certificates required for the business registration, and operation of an enterprise with the appropriate local or national government agencies.”

To protect the intellectual property (IP) of the products, host agencies will endorse the startup to the Intellectual Property Office of the Philippines to help facilitate and assist in expediting the filing of appropriate IP registration.

2. R&D grants and international exposure

Aside from these, grants for further research, development, training, and even expansion are provided to the qualified startups and startup enablers.

Host agencies are also tasked to provide support to international competition and exposure to further develop their capacity as entrepreneurs. These include subsidies on travel expenses, per diem allowances, airfares, and baggage fees for materials and equipment to be used in the competition.

3. Philippine startup ecozone

To further promote its growth, the Philippine Economic Zone Authority will promote the creation of the Philippine Startup Ecozones or Special Economic Zones that will serve as mechanisms to attract more private investments into the program.

4. Startup Grant Fund

Under the Act, a Startup Grant Fund (SGF) shall be created under DOST, DICT, and DTI. Each agency, on the other hand, shall use its respective SGF to provide initial and supplemental Grants-in-Aid (GIA) for startups and startup enablers that have passed the selection and application process.

According to DOST Undersecretary Rowena Cristina L. Guevara, “the SGF is established to overcome research and development roadblocks by means of prototype improvement, conduct of feasibility studies, development of product specifications, as well as validation of user requirements, to strengthen intellectual property (IP) by means of protection and development of the appropriate IP strategies.”

The Act also aims to help startups establish initial market traction and engage potential users for feedback and refinement of their business model.

Moreover, a Startup Venture Fund will be created under DTI to match the investments made by selected startup investors in the country.

Looking at the overall strategies, an investment development plan will be in place to serve as its short to long term investment plan.

Finally, to ensure that all the programs and initiatives under this Act will be aligned to its intended outcomes, a Steering Committee composed of nine representatives from the three key government departments will be designated to oversee successful implementation of the Philippine Startup Development Program.

DOST is among the government agencies that helps startups realize their full commercial potential through various initiatives like the Science for Change Program with its four sub-programs such as the Collaborative Research and Development to Leverage Philippine Economy or CRADLE, Niche Centers in the Regions for Research and Development, R&D Leadership, and Business Innovation through Science and Technology; Technology Business Incubation Program; Technology Innovation for Commercialization Program (TECHNICOM); the Startup Nation Program; and the Young Innovators Program; among others.    

The respective secretaries of the DOST, DICT, and DTI signed on 22 March 2021 the Joint Administrative Order for the Innovative Startup Act via a virtual presser, signifying their full support for the program that will create a robust innovation ecosystem in the country.  

With the full implementation of the Innovative Startup Act, the dream of Vince and those of other young and creative innovators to becoming a startup founder could just be a few clicks and ticks from reality.  (By Joy M. Lazcano, DOST-STII)

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