1. Overcoming Barriers to Caribbean
Innovation
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
• Emergence of Knowledge Economy
• Correlations
c. Where does Firm Sustainable Competitive Advantage arise from
• Firm Level
• Knowledge, Innovation, Creativity (KIC Factors)
d. 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
Value creation in the market from New or Improved
products, processes, methodologies, business models, or services

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 fast-growing 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. The traditional economic model is dead !!
Welcome the New Economy!!
Umemoto 2006
•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 2006

11. Global Shift to the Knowledge Economy

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

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

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

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 English-
speaking 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
Resource-rich ≠ capacity to innovate

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

23. BUILDING a CULTURE and PROCESS
for CREATIVE PROBLEM-SOLVING
Innovative
Results Creativity Thinking Skills
=
Content
+
Process
+
Process
Skills
+ Create Evaluate
Options Options
Tools No Judgment Yes Judgment
+ No Logic Yes Logic
Basadur
2012
Style

24. 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

25. PROMISING POINTERS TO RAMP UP THE ICT VALUE-
CHAIN
• 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

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 - They’ve Got it Right

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

30. Building Tripartite Consensus – The TRIPLE HELIX Model
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-industry-
government 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
·

31. 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)

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, process and culture for
operationalising a sustained shift in national and regional
innovation outcomes

33. THANK YOU !
Silburn Clarke, FRICS
silburn@spatialvision.com