Innovation Strategies in Traditional Cultural Expressions MSMEs in the Philippines: A Case Study

June Ann J. Casimiro, Karenina B. Romualdo and Via Shane R. Santiago

No DP 2024-48, Discussion Papers from Philippine Institute for Development Studies

Abstract: This study investigates the innovation strategies of cultural micro, small, and medium enterprises (MSMEs) in Northern and Central Luzon, Philippines, operating within the domain of traditional cultural expressions, particularly traditional crafts and culinary crafts. These enterprises play a dual role in preserving cultural heritage and contributing to local economic development. As cultural and creative industries (CCIs) gain increasing recognition for their economic and social contributions, cultural MSMEs in developing regions face unique challenges. Through a qualitative case study approach involving nine MSMEs, the research explores innovations in products, processes, and business models. It also examines the motivations driving these innovations, barriers encountered, and opportunities for enhancing sustainability and competitiveness. Findings reveal that cultural entrepreneurs innovate to ensure economic viability, preserve cultural heritage, empower communities, and leave a lasting legacy. Their strategies respond to evolving consumer preferences, seek to expand market reach, and aim to modernize operations while maintaining the authenticity of their cultural products. However, challenges such as succession planning, diminishing artisanal skills, and limited access to financial resources constrain their capacity to scale, adopt new technologies, and remain competitive in both local and global markets. The study identifies key innovation strategies, including product and process diversification, technology integration, strategic marketing, and stakeholder collaboration. Many MSMEs adopt hybrid production models, blending traditional craftsmanship with mechanized processes to enhance efficiency without undermining cultural value. Partnerships with government agencies, universities, and private entities emerge as critical to fostering innovation ecosystems that support cultural entrepreneurship. Despite these efforts, significant barriers persist. The declining interest of younger generations in traditional crafts threatens the continuity of artisanal skills, compounded by the absence of formal training programs. Limited financial resources further hinder growth and modernization, restricting the ability of MSMEs to compete effectively. To address these challenges, the study advocates for a collaborative approach involving policymakers, industry stakeholders, and consumers to create an enabling environment for innovation and sustainability. Such a framework must include targeted support for skills development, financial accessibility, and market expansion. This research emphasizes the essential role of cultural MSMEs within the traditional cultural expressions domain and their contribution to the broader CCI ecosystem. It offers actionable insights for addressing structural barriers and leveraging opportunities to enhance the resilience and competitiveness of these enterprises. By empowering cultural MSMEs, the Philippines can preserve its rich cultural heritage while fostering economic growth and social development. Comments on this paper are welcome within 60 days from the date of posting. Email publications@pids.gov.ph.

Keywords: entrepreneurship; MSMEs; culture; creative industries; innovation; strategy; cultural entrepreneurship; cultural and creative industries; CCI (search for similar items in EconPapers)
Pages: 56
Date: 2024
New Economics Papers: this item is included in nep-cse, nep-cul, nep-ent, nep-sbm and nep-sea
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Persistent link: https://EconPapers.repec.org/RePEc:phd:dpaper:dp_2024-48

DOI: 10.62986/dp2024.48

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