Investing in innovation
“The transition to sustained competitiveness will require upgrading all categories of economic assets: technology, labour, plant and equipment, organization, marketing, and a broad technical infrastructure to support all the other categories.” – Gregory Tassey (2012), Economist at the United States’ National Institute of Standards and Technology
The pace of technological change has undoubtedly accelerated during the last 30 years. Indeed technology has emerged as the primary driver of productivity and incomes growth; it has become as important as capital and labour in the production process.
More than ever before global competitiveness is rooted in innovation – process innovation and cutting edge technology. It is not at all surprising that the world’s largest companies are Apple, a technology juggernaut and Exxon Mobile, an oil giant. Don’t be lost on the magnitude of innovation that’s involved in oil and gas extraction and refinery.
Last week I indicated that there are two types of economies that will prosper in the 21st century: (i) resource rich economies and (ii) economies built on innovation; innovation made possible by Research and Development, entrepreneurship and access to risk capital.
Key economic agents in the largest and most prosperous economies have long recognised this. Of course, good governance, intellectual property protection mechanisms and skills development are also important ingredients. Many other countries are catching up, rising their tide of economic and social wellbeing in the process.
It is incumbent on government, industry and academia to co-invest in basic research, applied research and development. Commercialising proprietary inventions and integrating process innovations into the production processes are imperatives worthy of aspiration. Barbados would do well to pursue a R&D investment target of 2 to 4 per cent of GDP or $170 to $340 million a year by 2018. Please note that I said Barbados not government.
Industry, universities and colleges, NGOs and government, all have an essential role to play. Incentives in the form of R&D tax credits or grants, an innovation fund, creative public sector procurement mandates etc. could be deployed to boost private and public R&D spending.
The success of such an undertaking will require more graduates in business education, science, engineering and technology – programming, IT and the like. More emphasis must be placed on those disciplines if Barbados is to make the leap from a mere user of technology to a creator and producer of technology.
A new ethos of primary and secondary education should be pursued; one that prioritises critical thinking, problem solving and creativity while integrating information and communications technology in classroom instruction and learning.
The challenge is to produce well-rounded citizen that are well equipped to succeed in the new global economy, citizens that are also civic minded and imbued with a social conscience. The country can no longer afford to principally fashion children into budding professionals eager to join the existing production assembly lines.
Children ought to leave school with the legitimate ambition of becoming titans of business, inventors, innovators and technically skilled craftsmen and women. They should see the world as their oyster.
Some of the areas of industrial R&D which Barbados could realistically set its sights on are life sciences, bio-technology, Information and Communications Technology, agro-processing, and alternative energy. Creativity and world leading indigenous innovations are not beyond the innate capacities of Barbadians.
Stakeholders just need to create the enabling infrastructure in addition to forging appropriate strategic partnerships with third party researchers, research institutions and entrepreneurs abroad. Barbados was once a pioneer in high yield sugar cane breeding. The late UWI lecture, Professor Headley was a noted developer of photovoltaic technology, which was the precursor of the flourishing local solar water heating industry.
Much has been done to create new genres of music such as ragga soca and sweet soca and of late, there has been some impetus by Marion Hart and others to create cassava flour and other condiments and cuisine. We have also read or heard of the seminal work of Robin Belle and others in the area of app development and the concept of creating a digital economy.
The resolve must be found to scale up these initiatives and create the environment for others to emerge and be commercialised. Many of these endeavours bode well for the future as there is much value added to be derived and foreign exchange potential to be exploited. Imagine the creation of pharmaceuticals from Caribbean flora and fauna extracts.
Admittedly, much of the foregoing will only yield fruit in the long-run; after all, creating a new economy is a long-term endeavour. In the meantime, better effort has to be made to accelerate the pace at which imported technology, innovative processes and various types of advance management systems are integrated into all areas of domestic productive enterprise.
In many aspects of domestic provision of goods and services, Barbados is light years behind its competitors. Better use could be made of management information systems in the private and public sectors. Why are the primary vehicles of government administration in 2013 a paper-based antiquated filing system and archaic decision making mechanisms?
It is time for electronic filing, email, e-commerce platforms, teleconferencing and other IT systems to become more ubiquitous features of Barbados’ business climate.
Roy Morris of Barbados Today has led the way in modernising the delivery of local print media — news at your fingertips; now accessible on smartphones, PCs and tablets, with advertising reach that extends beyond the shores of Barbados. That advertising service many become more attractive as local businesses become more regionally and globally focused.
Other media houses are streaming live and indeed, political parties have been utilising social media, IT applications and e-commerce platforms to better market themselves, raise funding and canvas their constituencies.
However, more needs to be done in terms of technology adoption for process improvements and other productive endeavours. Why can’t I sit in a living room in St. John or St. James and go online to order electronics or clothing from a local department store and have them delivered to my home for a fee? Why can’t road tax be paid online? Why aren’t Barbadians allowed to renew auto insurance premiums online?
With today’s technological advances, there is much scope to transact a lot of business online but productive technology adoption is lagging too far behind in Bim.
Hotels and tourism attractions domiciled in Barbados are not doing enough to leverage social media or e-commerce platforms for marketing or transacting international business. It’s a shameful lost opportunity that prospective visitors are denied the convenience of booking and paying for accommodation at or admission to many of Barbados’ tourism offerings online.
Generally, customer service leaves much to be desired in Barbados. It’s a competitive disadvantage that is sure to cost the country millions of dollars in foregone revenue but it can be easily remedied with better training, service delivery benchmarks and better customer service management; not a thing to do with being NISE!
Government’s Throne Speech and its augmentation of the remit of the Ministry of Education with innovation and technology policy mandates suggest that decision makers have already taken note of the importance of investment in R&D and technology adoption.
The thrust towards the adoption of alternative energy technology in order to reduce the island’s dependence on fossil fuels and stabilise energy price volatility is a worthwhile quest.
Investment in alternative energy, which is still relatively costly, will spawn new industries, create employment, diversify the energy mix and maybe result in net foreign exchange savings when oil prices are elevated, but the current strategy of adoption is not a panacea.
It is only likely to birth a new economic sector if Barbados can position itself to become a developer of the evolving alternative energy technology and ultimately become an exporter of alternative energy: technology or monetised intellectual property.
It’s time for new wine and new wineskins…
* Carlos R. Forte is a Commonwealth Scholar and Barbadian economist with local and international experience. C.R.Forte@gmail.com