Snapshot: 2013 update of how innovative are we in the Caribbean

We update our 2012 examination of innovation in the Caribbean, based on the most recently published Global Innovation Index

The Global Innovation Index (GII) is an internationally recognised review of the extent to which countries worldwide are innovative, by examining the enabling environment and key indicators of innovation-driven outputs. Produced by INSEAD, Cornell University and the World Intellectual Property Organisation (WIPO), the GII provides one of the most comprehensive and current assessments of national innovation.  The 2013 publication covers 142 economies, accounting for 94.9% of the world’s population and 98.7% of the world’s Gross Domestic Product (Source: INSEAD et al)

In this our third instalment of the GII outcomes, we highlight the performance of member countries of the Caribbean Community (CARICOM) that have been included in this year’s study, and briefly compare the results with those reported in our 2012 snapshot.

Measuring innovation

The GII comprises two sub-indices: Innovation Input Sub-Index and Innovation Output Sub-Index.  The Innovation Input Sub-Index assesses the extent to which contributors to innovation have been implemented, while the Innovation Output Sub-Index considers at the ways in which innovation can be demonstrated in an economy. Each Sub-index comprises a number of pillars, which in turn consist of indicators that have been grouped into sub-pillars (Table 1). Under the Innovation Input Sub-Index there are five pillars, whilst the Innovation Output Sub-Index has two. Nevertheless, across both pillars a total of 84 indicators are assessed.

Table 1: Framework for indicators used to develop the 2013 Global Innovation Index (Source: INSEAD et al)

In the current assessment, the “energy” indicator under the “infrastructure” pillar has been replaced with “ecological sustainability”. The Index creators were of the view that good ecologically friendly infrastructure facilitates “the production and exchange of ideas, services, and goods and feed into the innovation system through increased productivity and efficiency, lower transaction costs, better access to markets, and sustainable growth” (Source: INSEAD et al).

Another change that has been made to the indicators used is that under the “creative outputs” pillar, “creative intangibles” has been replaced with “intangible assets”. In the study, intangible assets focussed primarily on trademarks, and the use of ICTs in business and organisational models.

Finally, to determine a country’s score on the Innovation Index, under each sub-pillar, the weighted average of under each indicator is calculated. Thereafter:

1. The Innovation Input Sub-Index is the simple average of the first five pillar scores.
2. The Innovation Output Sub- Index is the simple average of the last two pillar scores.
3. The overall GII is the simple average of the Input and Output Sub-Indices.
4. The Innovation Efficiency Index is the ratio of the Output Sub- Index over the Input Sub-Index.  (Source: GII)

How does the Caribbean stack up?

In the 2013 study, the following six Caribbean countries were included: Barbados, Belize, the Dominican Republic, Guyana, Jamaica and Trinidad and Tobago. In the last year’s review, Guyana was the top ranked Caribbean country. However, this year, Barbados, which was not included in 2012 and 2011 exercises, is the highest ranking Caribbean country at 47 out of 142 countries, and is second to Costa Rica in the Latin American and the Caribbean grouping.

In the Caribbean/CARICOM grouping, Barbados is followed by:

• Guyana, at 78, which had a one-place drop from its previous ranking of 77
• the Dominican Republic, at 79, which improved from its 2012 standing at 86
• Trinidad and Tobago, at 81, whose position remains from its 2012 ranking
• Jamaica, at 81, a 10-place improvement from its position last year, and
• Belize, at 102 out of 142 countries, which is a 42-place drop from its 21012 ranking at 80 out of 141 countries.

Figure 1 tracks the countries’ innovation ranking over the past five years. It is evident that no country has experienced any significant improvement in innovation ranking in at least the past two years, and with the exception of Belize and Barbados, the rankings of the remaining countries are all within five points of each other.

Figure 1: Innovation ranking of select Caribbean countries from 2009—2013 (Source: INSEAD et al)

Upon closer scrutiny of the scoring, and as reflected in Figure 2, the Caribbean countries assessed received their higher score for the Innovation Input Sub-Index than for the Innovation Output Sub-Index. Hence the enabling environment for innovation is being created, but the associated outputs of innovation are either not being created or not as evident. Table 2 highlights select strengths and weaknesses of the same countries that had been considered to determine their individual Innovation Index.

Figure 2: Innovation Output and Input sub-indices from the 2013 GII for select Caribbean countries (Source: INSEAD et al)

Table 2: Key strength and weaknesses of select Caribbean countries in 2013 GII assessment (INSEAD et al)

Parting thoughts…

Since 2012, the Dominican Republic, Guyana and Jamaica have improved their position in the GII ranking, which does suggest that relative to the entire group of 142 countries, those Caribbean countries have effected some marked improvements for some of the indicators evaluated. With regard to Trinidad and Tobago, although improvements could have been made since the previous year’s review, they were not significant enough, relative to those occurring worldwide to advance its position in the ranking.

Finally, although there is indeed room for improvement generally with regard to the GII, from a developmental perspective, countries in the region could consider paying greater attention to addressing deficiencies that might exist among innovation output indicators. To varying degrees and as mentioned earlier, for all of the Caribbean countries assessed, they scored better (and in most instances considerably better) on the Input Index, which examined the enabling environment, than the Output Index. Hence the system could be made more balanced, by addressing major roadblocks to realising greater innovation, such as those highlighted in Table 2 above.

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