TT companies need to be innovative to become competitive

For Trinidad and Tobago to become a developed nation, it must first become a competitive nation.

This is the view of Jennifer Blanke, an economist with the Global Competitiveness Programme (GCP) at the World Economic Forum. Blanke was the feature speaker at the UWI — Institute of Business (UWI - IOB) Ideas Forum titled “Global Competitiveness and Trinidad and Tobago which was held last week at the Trinidad Hilton. Competitiveness is not synonymous with developed nation status, but there is a casual relationship, in that competitiveness underpins development, she said. The GCP is responsible for publishing the Global Competitiveness Report and Index, (GCP and GCI respectively) in which TT placed 37th, behind only the United States (US), Canada and Chile in the Americas. The GCI estimates, the underlying prospects for growth over a five to eight year horizon. The GCR looks at multiple dimensions of a country’s current and potential performance and uses two distinct but complimentary approaches to assessing competitiveness. The first, which is the Microeconomic Competitiveness Index (MICI), assesses institutions, market structures and economic policies supportive of high current levels of productivity. It therefore examines current competitiveness.

Using this yardstick, TT was ranked 44th, behind countries such as Chile (31st); Brazil (33rd); India (37th), China (38th); Costa Rica (39th) and the Dominican Republic (41st). Blanke said TT is not actually tapping into its competitive potential, noting that even though TT has a strong macro-economic environment, there are other factors which are holding back the country from being competitive. “The fact that you have a strong macro-economic environment, which is something hard to get together, is really a warning signal to capitalise on the fact that you have such a good macro-economic environment,” she said.

This country’s macro-economic stability accounted in a large part for its high ranking. She said the challenge to make TT a developed nation by 2020 or sooner can be met by transforming it into an innovation-driven economy, characterised by the presence of sustainable, brain-driven industries. She added that crime and corruption were two factors that were also affecting the country’s competitiveness. Blanke noted that other factors which were holding back competitiveness were  a high interest rate spread, the level of tertiary level enrollment and the use of technology. With regards to the MICI, Blanke said local companies are strong in penetrating regional markets and those surveyed said the business environment does not hamper the start up of new businesses. However, Blanke said there needs to be more innovation and increased spending on research and development and staff training.