Overcoming Barriers to Caribbean Innovation Final 16jun12 v2

7/31/2019 Overcoming Barriers to Caribbean Innovation Final 16jun12 v2

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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

CARIBBEAN GROWTH FORUMPRESENTATION OUTLINE


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DEFINITIONAL

Innovation....

Value creation in the market from New or Improved products, processes,methodologies, business models, or services

Schumpeter 1934


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INNOVATION IS A FIRM LEVEL CONSTRUCT

Clarke 2012


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The Innovation-Productivity-Competitiveness-Prosperity

Link

Innovative Capacity

Competitiveness Improvement

Prosperity

Begins with

research and

development

Productivity

Growth


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The productivity of Jamaican firms is chronically low and uncompetitive(JPC, 2010). The countrys 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 ).

INNOVATION CRISIS, PARADOX and CONUNDRUM


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Global economy has been in transition since the 1980s to what is variously termed a

New Economy, Digital Economy or a Knowledge Economy

B. THE NEW KNOWLEDGE ECONOMY


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The traditional economic model is dead !!

The model of the last 2 eras (agricultural and industrial ) indicated

that Land, Labour (low-cost) and Capital (LLC) were the key factors ofeconomic production

Knowledge has become the main resource

Welcome the New Economy!!

Umemoto 2006


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The global pace of innovation is accelerating (not only in

products and services, but also in processes, markets, sourcing,

business models, etc.) Umemoto 2006

Welcome the New Economy!!


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Global Shift to the Knowledge Economy


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RESOURCE-BASED ECONOMIES EFFICIENCY-BASED ECONOMIES INNOVATION ECONOMIES

Transition

I to II

Jamaica

Guyana

Transition

II to III

Trinidad

Barbados

Stage II

Dom Rep

Panama

Costa Rica

Stage III

???

Stage I

Honduras

Nicaragua

Countries compete based on their

factor endowments: primarily

unskilled labour and natural

resources.

Compete on the basis of price and

sell basic products or commodities,

with their low productivity

reflected in low wages.

Countries begin to develop more

efficient production processes and

increase product quality.

Competitiveness is increasingly driven

by higher education and training.

Wages have risen and they cannot

increase prices

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

The Shift to Knowledge and Innovation


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Henrekson, Stockholm School of Economics

INNOVATION ACTIVITY EXPANDS THEPRODUCTION POSSIBILITY FRONTIER

Micro Small Medium

Businesses

Innovating

Firms

Efficiency Factors


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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

How can businesses create wealth and prosperity?

C. Sustainable Competitive Advantage


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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 theResource Based View (Conner and Prahalad, 1996) and in building national intellectual

capital for global competitiveness (Stahle and Bounfour, 2008)

How can businesses create wealth and prosperity?


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SUSTAINABLE COMPETITIVE ADVANTAGE

MODEL

Is the resource or

capability valuable ?

Is it heterogeneously

distributed across

all firms ?

Is resource or capability

imperfectly mobile ?

Competitive

disadvantage

Competitive

parity

Sustained

Competitive

Advantage

Temporary

Competitive

Advantage

YES

YES

YES

NO

NO

NO

Mata, Feurst, Barney (1995)

Acquired /Imported

Innovations

Indigenous

Innovations

Is the organisational

model embedded

?

YES


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Caribbean cannot assert any globally distinctive VRIO resources or capabilities from factorsderived 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

Reorienting the Caribbean Firm


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WEF - Firm Capacity for Innovation

D. STATE OF CARIBBEAN FIRMS

Pronounced uniform regional group inflexion


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How do we radically transform the Firm Innovation Outcomes ?

STATE OF CARIBBEAN FIRMS


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FIRM-LEVEL INNOVATION ACROSS CARIBBEAN

Resource-rich capacity to innovate


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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 bydoing

Requires both Divergent and Convergent thinking

E. BUILDING a CULTURE and PROCESSfor CREATIVE PROBLEM-SOLVING


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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

EMPLOYEE CREATIVITY


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BUILDING a CULTURE and PROCESSfor CREATIVE PROBLEM-SOLVING

Creativity Thinking SkillsInnovativeResults

=Content

+Process

+ProcessSkills

+Tools+

Style

CreateOptionsNo JudgmentNo Logic

EvaluateOptionsYes JudgmentYes Logic

Basadur

2012


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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


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-CHAIN

The GoJ/World Bank Digital Jam 2.0 Programme, has provided somepointers as to the untapped potential of Caribbean talent for ICT

Creativity

Over 300 youngsters have responded to call to showcase theircreativity 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


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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 TMTs tend to be severely critical of governmental policy-makers

in discourses on business challenges.

F. PERSPECTIVES and CONSENSUS


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TOP CONSTRAINTS - Business Perspective

POLICYMAKERS PERSPECTIVE Th G i Ri h


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POLICYMAKERS PERSPECTIVE - Theyve Got it Right


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ildi i i h d l


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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.

Thefirst dimension of the triple helix modelis 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 orby the building of synergistic lateral ties amongst government research

institutes and labs

TRIPLE HELIX


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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 macrostrategic level as well as the micro operational level

( adapted from Etzkowitz 2002)


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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 foroperationalising a sustained shift in national and regional

innovation outcomes

G. MESSAGES TO TAKE HOME


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THANK YOU !

Silburn Clarke, FRICS

[email protected]

Documents

Overcoming Barriers to Caribbean Innovation Final 16jun12 v2