1. Overcoming Barriers to Caribbean
Innovation
Towards a Restructuring of the Innovation Payoffs
Silburn Clarke, FRICS
Chairman, Digital Society Jamaica

2. CARIBBEAN GROWTH FORUM
PRESENTATION OUTLINE
a.
The Innovation- Productivity-Competitiveness-Prosperity Challenge
b.
We are in the throes of the Knowledge Economy
•
•
c.
Where does Firm Sustainable Competitive Advantage arise from
•
•
d.
Emergence of Knowledge Economy
Correlations
Firm Level
Knowledge, Innovation, Creativity (KIC Factors)
Status of Caribbean Firms
•
Review of Capacity for Innovation
e. Unleashing the Human Talent Potential
•
•
Creativity Problem Solving / Training Talent in Creativity
Supportive Firm Climate for fostering Creativity
f. Perspectives and Consensus
•
•
Businesses, Policymakers & Academia
Triple Helix Model
g. Take Home Messages

3. DEFINITIONAL
Innovation....
Value creation in the market from New or Improved products, processes,
methodologies, business models, or services
Schumpeter 1934

4. INNOVATION IS A FIRM LEVEL CONSTRUCT
Clarke 2012

5. The Innovation-Productivity-Competitiveness-Prosperity
Link
Prosperity
Competitiveness Improvement
Productivity
Growth
Innovative Capacity
Begins with
research and
development

6. INNOVATION CRISIS, PARADOX and CONUNDRUM
Jamaica’s economy had been trapped in a low-growth, low-productivity
mode for nearly four decades resulting in the stagnation of the standard
of living of its peoples (Jamaica Productivity Centre, 2010 and World
Bank, 2011).
Paradoxically, for the past two decades, Jamaica has enjoyed both
exceptionally high levels of foreign investment (Williams & Deslandes,
2008) as well as a rate of total fixed investment, over the two decades
from the 90’s to the mid-2000’s, which was close to those of the fastgrowing East Asian region (World Bank , 2011).

7. INNOVATION CRISIS, PARADOX and CONUNDRUM
The productivity of Jamaican firms is chronically low and uncompetitive
(JPC, 2010). The country’s global competitiveness ranking has slipped
from 91 through 96 to 107 over the last three year period 2009 to
2011; WEF, 2010 and 2011).
A sub-index of the “firm capacity for innovation” of Jamaican businesses
revealed a dismally low collective national rating of 107 out of 139 when
compared to national ratings in other economies around the globe in
2010, (WEF, 2010).
On the recent 2011 Global Innovation Index Jamaica was ranked 92nd
out of 125 countries (INSEAD, 2011 ).

8. B. THE NEW KNOWLEDGE ECONOMY
Global economy has been in transition since the 1980’s to what is variously termed a
New Economy, Digital Economy or a Knowledge Economy

9. 3. The traditional economic model is dead !!
Welcome the New Economy!!
•The model of the last 2 eras (agricultural and industrial ) indicated
that Land, Labour (low-cost) and Capital (LLC) were the key factors of
economic production
•Knowledge has become the main resource

10. Welcome the New Economy!!
“The global pace of innovation is accelerating (not only in
products and services, but also in processes, markets, sourcing,
business models, etc.) “
Umemoto 2010

11. Global Shift to the Knowledge Economy

12. The Shift to Knowledge and Innovation
Stage I
Transition
I to II
Stage II
Transition
II to III
Stage III
Honduras
Nicaragua
Jamaica
Guyana
Dom Rep
Panama
Costa Rica
Trinidad
Barbados
???
RESOURCE-BASED ECONOMIES
EFFICIENCY-BASED ECONOMIES
Countries compete based on their
factor endowments: primarily
unskilled labour and natural
resources.
Countries begin to develop more
efficient production processes and
increase product quality.
Compete on the basis of price and
sell basic products or commodities,
with their low productivity
reflected in low wages.
Competitiveness is increasingly driven
by higher education and training.
Wages have risen and they cannot
increase prices
INNOVATION ECONOMIES
Companies
must
compete
by
producing new and different goods
using
the
most
sophisticated
production processes and through
innovation.
Wages will have risen by so much that
they are only able to sustain those
higher wages and the associated
standard of living by higher value
production

13. INNOVATION ACTIVITY EXPANDS THE
PRODUCTION POSSIBILITY FRONTIER
Henrekson, Stock
holm School of
Economics,
Micro Small Medium
Businesses
Innovating
Firms

14. C. Sustainable Competitive Advantage
How can businesses create wealth and prosperity?
•Through Knowledge, Innovation and Creativity (KIC)
•The Resource Based View (RBV) identifies the combination of Valuable, Rare, NonInimitable and Organisation (VRIO) resources and capabilities as the source of firm
modern competition (Wernerfelt 1984, Barney 1991)
•Valuable resources and capabilities ….only gives competitive parity
•Valuable and Rare resources and capabilities ….. only gives temporary competitive
advantage

15. How can businesses create wealth and prosperity?
• Resources and capabilities which are Valuable, Rare, Inimitable plus supported by an
Organisational context, culture and processes that can exploit these resources and
capabilities especially where these are tacitly embedded or intangible (VRIO).…yields
Sustained Competitive Advantage (Wernerfelt 1984, Barney 1991, Peteraf 1993, Bounfour 2003)
•Dynamic Organisational Capabilities flows from a grounding in Knowledge, Innovation and
Creativity (Teece et al 1997, Grant 1996, Eisenhardt and Martin 2000)
•Knowledge resources are identified as being at the heart of the advantages under the
Resource Based View (Conner and Prahalad, 1996) and in building national intellectual
capital for global competitiveness (Stahle and Bounfour, 2008)

16. SUSTAINABLE COMPETITIVE ADVANTAGE
MODEL
NO
Is the resource or
capability valuable ?
YES
NO
Is it heterogeneously
distributed across
all firms ?
YES
Is resource or capability
imperfectly mobile ?
Acquired /Imported
Innovations
YES
NO
Competitive
disadvantage
Mata, Feurst, Barney (1995)
Competitive
parity
Temporary
Competitive
Advantage
Is the organisational
model embedded
?
Indigenous
Innovations
YES
Sustained
Competitive
Advantage

17. Reorienting the Caribbean Firm
•Caribbean cannot assert any globally distinctive VRIO resources or capabilities from factors
derived from factors structurally bounded to the old agro-industrial model
•They are no longer relevant; have not been relevant for a long time
•We have no distinctive land assists, no low-cost labour factor, no unique capital factor
•We have to start investing our time and energies into creating, enhancing, preserving our own
KIC factor for maximal global economic leverage
•Caribbean has to build its own capacity for creating indigenous innovations. The Englishspeaking Caribbean continues to be the only regional block of the world that is yet to develop a
software exporting capability; (Duggan, 2008 citing Erran Carmel)
•That is where our unique and special VRIO resources and capabilities lie

18. D. STATE OF CARIBBEAN FIRMS
WEF - Firm Capacity for Innovation
Pronounced uniform regional group inflexion

19. STATE OF CARIBBEAN FIRMS
How do we radically transform the Firm Innovation Outcomes ?

20. FIRM-LEVEL INNOVATION ACROSS CARIBBEAN

21. E. BUILDING a CULTURE and PROCESS
for CREATIVE PROBLEM-SOLVING
Innovation comes out of creative thinking and creative performance;
we must learn to think creatively and to do creatively
Requires reshaping the mental models and mindsets by learning by
doing
Requires both Divergent and Convergent thinking

22. BUILDING a CULTURE and PROCESS
for CREATIVE PROBLEM-SOLVING
Innovative
Results
=
Content
+
Process
+
Process
Skills
+
Tools
+
Style
Creativity Thinking Skills
Create
Options
No Judgment
No Logic
Evaluate
Options
Yes Judgment
Yes Logic

23. OPPORTUNITIES TO RAMP UP THE ICT VALUE-CHAIN
•
Ubiquitous resources and capabilities such as generic IT, does
not give any advantages; they are Valuable and hence gives
comparative parity at best.
•
Competitive Advantage comes from IT-enabled processes,
systems, applications and routines that are novel, unique and
inimitable flowing from the creative minds of motivated talent
•
The Caribbean is traditionally a heavy consumer of basic and
ubiquitous IT
•
But a poor creator/producer of IT solutions and Export IT
•
Region must shift focus to producing value products, services
and solutions for domestic and global spaces

24. PROMISING POINTERS TO RAMP UP THE ICT VALUECHAIN
•
The GoJ/World Bank Digital Jam 2.0 Programme, has provided some
pointers as to the untapped potential of Caribbean talent for ICT
Creativity
•
Over 300 youngsters have responded to call to showcase their
creativity using ICT ; 200 on the Mobile Apps track and 100 in the
24 hour Sports-based CodeSprint or Sports Hackathon
•
60 mobile application proposals submitted with over half adjudged
as being of value to market

25. EMPLOYEE CREATIVITY
Firm Innovation starts with individual employee creativity; creative
thinking and creative performance.
Firm Leadership which builds Supportive Work Contexts facilitate
Intrinsic Motivation which nurtures Employee Creativity

26. F.
PERSPECTIVES and CONSENSUS
Governments, Businesses and Academia tend to look at the challenge of firm
productivity and national competitiveness from very different perspectives.
These differing viewpoints may partially explain why the regional innovation
outcomes have been underwhelming for decades
The perspective portrayed by the Doing Business Survey is a reflection of the Business
Sector and so is understandably not critical of business practices, leadership,
management practices, or entrepreneurial orientation.
Business owners and TMT’s tend to be severely critical of governmental policy-makers
in discourses on business challenges.

27. TOP CONSTRAINTS - Business Perspective

28. POLICYMAKERS PERSPECTIVE

29. TRIPLE HELIX - Model for Building Tripartite Consensus
The "triple helix" is a spiral model of innovation that captures multiple
reciprocal relationships at different points in the process of knowledge
capitalization. The triple helix denotes the university-industrygovernment relationship as one of relatively equal, yet interdependent,
institutional spheres which overlap and take the role of the other.
·
The first dimension of the triple helix model is internal
transformation in each of the helices, such as the development of
lateral ties among companies through strategic alliances (clustering) or
an assumption of an economic development mission by universities or
by the building of synergistic lateral ties amongst government research
institutes and labs
·

30. TRIPLE HELIX
·
The second dimension is the symbiotic influence of one helix upon another, for
example, when the rules of the game for the disposition of intellectual property
produced from government sponsored research were changed in the USA, technology
transfer activities spread to a much broader range of universities, resulting in the
emergence of an academic technology transfer profession and in facilitation for the
capitalisation of knowledge spillovers through commercialisation or where recipients of
government-sponsored innovation and competitiveness awards are encouraged to
share insights and strategies and also to mentor other firms
·
The third dimension is the creation of a new overlay of trilateral
networks, frameworks, organizations and institutions from the interaction among the
three helices, formed for the purpose of coming up with new ideas and formats for
high-tech knowledge-based development. These trilateral networks operate at both
the macro strategic level as well as the micro operational level
( adapted from Etzkowitz 2002)

31. LACK OF CONVERGENCE ON MAJOR CONSTRAITS
Constraints / Perspectives
Source
Business
Inefficient government bureaucracy
GCR/DB
X
Poor work ethic in national labour force
GCR/DB
Policy
X
Firm Capacity for Innovation is low
GCR
X
Business sophistication is low
GCR
Academia
X
Low absorptive capacity
X
X
Low level of business networking
X
X
Promote Innovative Entrepreneurship
X
X
Creative Firm Leadership
X
X
Facilitate growth and development of software
development industry
Main Development Constraints are knowledge USES
and CREATION (MORE basic and ubiquitious “ICT” does not
JCS/WITSA
X
X
Elliott
X
necessarily translates to Improved Competitiveness )
Economic payoffs should encourage high skilled,
entrepreneurial behaviours
Elliott
X
X

32. G. MESSAGES TO TAKE HOME
•
Need to structure economic payoffs to favour innovators and the
innovating firms in order to drive sustainability, flexibility,
competitiveness and prosperity
•
Expand / Enhance the human talent pool by infusing creative
thinking, creative problem finding and solving within schools,
universities, business firms and the government
•
Adopt Triple Helix Approach as broad model for building tripartite
consensus and providing a structure and culture for operationalising
a sustained national innovation processes

33. THANK YOU !