Innovation, Tradition Fuel Growth of Cultural MSMEs

Embracing innovation while preserving cultural identity is essential for the survival and growth of cultural micro, small, and medium enterprises (MSMEs) in the Philippines, experts said during a recent policy symposium.

Held on March 10 and hosted by the Philippine APEC Study Center Network (PASCN) of the Philippine Institute for Development Studies (PIDS) and Xavier University–Ateneo de Cagayan, the forum spotlighted how cultural MSMEs must balance modernization with tradition to remain competitive in a dynamic market.

“While innovation is essential for growth and adaptation, it is crucial to maintain the authenticity and cultural integrity of these products,” said Dr. Karenina Romualdo, acting vice president for business affairs at Central Luzon State University.

Romualdo presented findings from the PIDS study Advancing Innovation in Philippine Cultural MSMEs: Balancing Tradition and Modernization, which emphasizes the dual role of cultural MSMEs in both heritage preservation and economic development.

Cultural MSMEs, which account for 99.63 percent of businesses in the country, include enterprises in crafts, textiles, culinary arts, and other creative sectors deeply rooted in Filipino tradition.

Romualdo said these enterprises contribute an intangible yet vital cultural value while creating livelihoods, especially in rural areas.

“Cultural MSMEs are not just economic entities but also vital cultural institutions that preserve heritage and foster inclusive development,” she added.

Digital tools such as e-commerce platforms and social media are expanding market access for artisans and entrepreneurs, Romualdo noted, allowing them to promote local products without sacrificing authenticity.

Despite policy support from the Philippine Creative Industries Development Act (Republic Act 11904) and the Philippine Development Plan 2023–2028, challenges persist.

Romualdo cited competition from mass-produced imports, limited access to technology, the aging artisan population, and financial constraints as major hurdles.

She called for more targeted government interventions in funding, digital training, and market facilitation to help cultural MSMEs remain sustainable.

Dr. Glenda Orlanes, economics faculty member at Xavier University, stressed the importance of collaboration within the cultural MSME ecosystem.

“MSMEs must operate on the premise that mutual support and collective efforts can drive greater resilience and success than isolated competition,” Orlanes said.

She emphasized that linkages between artisans, businesses, and academic institutions can foster innovation while maintaining cultural roots.

“Ensuring that financial aid and training programs are accessible to cultural entrepreneurs will help sustain traditional industries,” Orlanes explained.

She advocated for cross-sector partnerships, where traditional artisans work hand-in-hand with technology-focused entrepreneurs to innovate sustainably.

Orlanes also urged for mentorship programs and customized incentives to strengthen business capabilities and competitiveness among cultural MSMEs.

National Economic and Development Authority (NEDA) OIC-Regional Director Richardson Cua echoed these views, underscoring the need for agility and innovation.

“Cultural MSMEs are more than just businesses. They represent Filipino identity and traditions,” Cua said.

He noted that embracing digital transformation is no longer optional for MSMEs, as it enables them to streamline operations, reduce costs, and reach wider audiences.

“Investing in technology allows MSMEs to streamline production, reach wider audiences, and create more efficient supply chains,” he said.

Cua called for stronger collaboration among government agencies, private sector partners, and MSME networks to provide holistic support and ensure the long-term viability of cultural enterprises.

Experts at the forum agreed that innovation and tradition are not mutually exclusive.

Instead, their integration offers a pathway for cultural MSMEs to thrive in the digital economy while staying true to their roots.