By: Staff Writer
January 14, 2025
The Inter-American Development Bank (IDB), in its latest Caribbean Quarterly Bulletin, focuses on innovation for the Caribbean region.
The IDB in partnership with Compete Caribbean, noted that they opted to focus on “one of its main themes – innovation – which has been proven to be a key driver of productivity growth across economies. The underlying dataset for the analysis is the Innovation, Firm Performance, and Gender (IFPG) Survey conducted by the Compete Caribbean Partnership Facility in 2020. The survey was administered to 1,979 formal firms across 13 Caribbean countries.”
The report also said: “The main conclusions from this Regional Overview are: Innovative firms in the Caribbean have 26 percent to 35 percent higher levels of total factor productivity and 21 percent to 81 percent higher sales per worker than non-innovative firms, depending on the type of innovation.
“Just over 40 percent of firms have produced general forms of innovation and 50 percent have produced green innovation, but just under 8 percent of firms have engaged in digital innovation. And, The largest group of businesses falls into the “potential innovator” category defined above. Nearly 57 percent of firms are potential innovators for general forms of innovation, 85 percent for digital innovation, and 48.8 percent for green innovation.
“In terms of increased productivity and economic growth, the large percentage of businesses in this category amounts to “money left on the table” regarding the unrealized potential for growth of Caribbean businesses.”
The report added: “Understanding why so many businesses are in the potential innovation category requires a deeper look into the obstacles they confront. The top six obstacles for potential innovators identified in the survey were the qualification of employees, level of available financial resources for innovation, degree of self confidence for innovation, current organizational/managerial culture, skills available among the workforce, and a market too small for the cost of innovation. It is important to state that all these obstacles reflect market failures that require a policy response.
“Interestingly, the percentage of firms issuing patents increased between a 2014 survey and the 2020 IFPG survey. The percentage is slightly higher among female-led firms than among male-led firms.”
The report also said: “One bright spot for the Caribbean is that most of its firms are either innovative or potentially innovative. This observation holds true for all categories of innovation and for both the services and manufacturing sectors.
“Of particular note, the highest share of potentially innovative firms was found in the realm of digital innovation, at 85.1 percent. Although cellphone and email usage is high across businesses regardless of size, reaching over 93 percent and 97 percent, respectively, many firms still struggle with building their online presence. As of 2020, the share of large firms with a website was almost 70 percent, but only a little more than a third of small firms had one.”