[xml][/xml]
The Bahamas Weekly Facebook The Bahamas Weekly Twitter
News : International Last Updated: Oct 12, 2017 - 4:13:30 PM


Overcoming obstacles to Innovation & productivity in Firms: a case of The Bahamas
Oct 12, 2017 - 12:38:22 PM

Email this article
 Mobile friendly page

Screen_Shot_2017-10-12_at_1.00.16_PM.png
Earlier this year, the IDB Group’s Caribbean Department invested in training for its employees to participate in a ‘Simplexity Workshop’, facilitated by Basadur Applied Creativity, with the objective of introducing the team to creative problem solving. The session resonated with the IDB’s team in The Bahamas. It forced participants to think of innovative ways to apply this creative process in executing the IDB’s mission as a development partner. The workshop evaluated problems from the lens of “how might we” do something differently, analyzing potential solutions equally.

The Bahamas and the Caribbean region are undergoing a transformation in their socio-economic, technological, and cultural environments. Livelihoods are now reliant on private sector firms to look for new ways of thinking, and to have the courage to suggest changes to the status quo. Evidence shows that investment in innovation, results in sustainable long-term growth and development for a country.

For firms to remain internationally competitive, they must embrace solutions to facilitate innovation. Considering how access to finance, competition, foreign direct investment, gender, and access to affordable energy all affect productivity and innovation for firms, can help remove barriers to progress in The Bahamas. Identifying and subsequently reducing these barriers should facilitate an increase in capacity of existing firms and spur growth in the number of innovative firms.

From the private sector perspective, analyzing these barriers can provide useful information for entrepreneurs and managers when considering research and development strategies, such as introducing new products and processes. It can also increase the chances of success and economic pay-off from innovative activity. Where there are challenges, the IDB believes there are also opportunities for improvement.

A 2017 Compete Caribbean publication, “Exploring Firm-Level Innovation and Productivity in Developing Countries: The Perspective of Caribbean Small States”, outlined policy interventions that could have the most impact in increasing firm performance within the Caribbean region. Some policy recommendations applicable to The Bahamas will require buy-in from public and private actors to create meaningful change. A few suggestions are briefly explored below:

• Access to finance is a major constraint on innovation, especially in an archipelagic nation, where investment in technology is particularly costly. The Central Bank of The Bahamas implemented further liberalization of Exchange Controls during 2017, targeting direct investment financing in foreign currency. The Central Bank expects the macro-economic impact of the reforms to be positive, resulting in a gradual stimulus to business activity over the medium term. Additionally, the Central Bank has been involved in drafting legislation for a Credit Bureau, which will help to open the market to an easier flow of financing. Policies that foster alternative mechanisms of financing, such as peer-to-peer lending and crowd funding, could create new sources of credit for innovative firms.
October 2017

• Human capital, also hampers innovation and productivity. Investing in human capital can lead to increased capacity to embrace new technologies and practices – this requires a cultural shift. The topics of labor force skills, informality, and gender gaps have surfaced in recent years in The Bahamas. Studies have concluded that a substantial skills gap exists in the country; firms believe the labor market inadequately meets the demand of an increasingly globalized world. The Minister of Labour recently acknowledged that “In order for The Bahamas to compete in the global arena, it is essential that our productivity is increased in both the public and private sectors”. A recent IDB study, “Understanding Employers’ Demands: Analysis of The Bahamas’ 2012 Wages and Productivity Survey”, concluded the skills set of the national labor force is a main condition for hiring in The Bahamas. Employers find it difficult to source skilled workers for jobs and view this skills shortage as the main impediment to productivity.

• Business climate and regulatory issues such as competition, time to market, compliance with international standards and requirements, open knowledge, and intellectual property protection have major effects on innovation. The private sector reports weak links with universities as well as difficulties in collaborating with laboratories, research centers, and even other companies in the same sector. This reduces opportunities to co-create and disseminate knowledge. The research conducted by Compete Caribbean found that there is not enough formal competition in the Caribbean to encourage the ideal level of innovation, but on the other hand, there is too much informal competition, which discourages innovation. Curbing informality and promoting competition from formal enterprises can increase the rate of innovation.

• Infrastructure might be considered the one area with limited control. The Bahamas, as an archipelagic nation, presents unique opportunities and challenges. Electricity connectivity, high fees, and unreliable supply, are amongst the major hindrances to doing business in The Bahamas. The correlation between these constraints and their deterrent to innovation is clear. The geography of The Bahamas makes it a unique case study; investment in energy infrastructure can have direct impacts on employment, cost of operations, population migration to other islands – and of course, innovation. If stakeholders are proactive, The Bahamas can become a model for the region and other small island states around the world.

Public-private partnerships are the way forward to meet the financing needs to achieve national and international development goals adopted by The Bahamas. Embracing innovation is essential if we are serious about addressing pressing development challenges such as logistics and connectivity, natural resource management, public institutional capacities, citizen security and renewable energy sources. Once successful public-private partnerships are formed and operational, these successes should be showcased.

A delegation from the Government of The Bahamas recently participated in an IDB-sponsored knowledge exchange with the Massachusetts Institute of Technology's Media Labs, which undoubtedly spurred thoughts on innovation within the public sector, and induced ideas surrounding productive development policies that might positively impact the private sector. According to a recent article covering the delegation’s visit to MIT, the group “examined cutting edge technological innovations which are being pioneered in areas of concern to The Bahamas. Two critical areas are cyber security of government databases as well as urban planning and design, with a view towards the modernization and revitalization of downtown Nassau.”

Economists, policy makers, and private sector stakeholders, agree that the economic growth of this region will depend on the ability of the private sector to increase its productivity and compete in new markets. It is important to underscore that these challenges are not unique to The Bahamas or the Caribbean. Countries in this region represent a constituency that is economically and geographically vulnerable and politically and socially developing – we cannot afford to get left behind!



Bookmark and Share




© Copyright 2017 by thebahamasweekly.com

Top of Page

Receive our Top Stories



Preview | Powered by CommandBlast

International
Latest Headlines
PM Davis congratulates Miss Teenager Bahamas Flonique Lightbourn
Minister of State Rahming at UN 66th Session of the Commission on the Status of Women
Prince William and The Earthshot Prize Winners and Finalists take centre stage on Day 2 at COP26
Jamaica’s agro-processing sector being enhanced by joint CDB, EU, JBDC project
OAS General Secretariat on the Assassination of the President of Haiti