WASHINGTON, (CMC) – The Inter-American Development Bank (IDB) says while most Caribbean businesses are either innovative or potentially innovative, they still face challenges.
But, a new IDB report, which delves into the critical role of innovation in driving economic growth and productivity in the Caribbean region, noted that innovative businesses in the Caribbean have 26 to 35 per cent higher levels of productivity and 21 to 81 per cent higher sales per worker than non-innovative firms, depending on the type of innovation.
The report titled “Innovation for Faster Economic Growth in the Caribbean: Are We There Yet?”, is part of IDB’s Caribbean Economics Quarterly publication series, which focuses on the economic performance of The Bahamas, Barbados, Guyana, Jamaica, Suriname, and Trinidad and Tobago.
The report also reveals that a substantial percentage of firms are poised to innovate but face significant barriers.
Drawing on data from a survey conducted by the Compete Caribbean Partnership Facility, the report identifies the main obstacles faced by businesses to achieve innovation.
These include macroeconomic conditions, the regulatory environment, access to finance, and labour market constraints. Challenges were amplified during the COVID-19 pandemic, and even at the end of 2024 several Caribbean countries have only just recovered their pre-pandemic levels of economic activity.
Among the other key findings the report include are that nearly 57 per cent of firms are being potential innovators for general forms of innovation, 85 per cent for digital innovation, and 48 per cent for green innovation.
In addition, the percentage of firms filing patents increased from 7.9 to 12.7 per cent between the 2014 and 2020 surveys. The report notes that the percentage is slightly higher among female-led firms compared to male-led firms.
The report also notes that policy measures to foster an enabling environment for innovation include improving labour market matches, providing dedicated support services for entrepreneurs, increasing access to innovative finance, and digitalising public services.
“Innovation is one of the key drivers for growth and resilience in the Caribbean. This report highlights the remarkable potential of our region’s businesses. By addressing the barriers they face, we can unlock even greater opportunities for sustainable development and competitiveness,” said Anton Edmunds, IDB general manager for the Caribbean.