Editorial | Accelerate innovation

Surprisingly, the Jamaican authorities have not made too much of the island’s performance on the World Intellectual Property Organisation’s (WIPO) Global Innovation Index (GII). Yet, while the island has far to go to be among the world’s most innovative economies, it has much to celebrate in these reports, and with which to excite people that Jamaica is a place they should consider for doing business.

For although Jamaica slipped two places, to 76 among 132 countries, on the 2022 GII, it outperformed many of its direct, mid-size Latin American and Caribbean peers and was among 26 countries which the index’s creators say did better than expected for their levels of development ­– so-called innovation achievers. Indeed, Jamaica returned to this group for the second successive year.

The GII is based on the analysis of over 80 key metrics, covering issues such as a country’s political environment, the sophistication of its market and business operations, the state of its infrastructure, education, and its creative outputs. These lead to two subindices, a composite index and rank based on the final scores.

Among Caribbean economies, only the Dominican Republic, 90th, claimed in the rankings this year, although, according to the report, “it continues to perform below expectation for its level of development”. But, noted the report: “In 2022, Jamaica ranks best in the region in terms of creative outputs (34th), including in indicators such as trademarks (9th) and industrial designs (14th).”

With respect to the wider Latin America and Caribbean (LAC) region, the countries that were better placed than Jamaica were Chile (50), Colombia (63), Uruguay (64), Peru (65), Costa Rica (68) and Argentina (69). It was ahead of the Dominican Republic (90), Trinidad and Tobago – the only other CARICOM country in the rankings – (90), Guatemala (110), and Honduras (113).

Noting a generally modest upward movement of LAC countries on the GII, the report added: “Over the past decade, only Mexico, Peru and Jamaica (76th) have gained more than 10 ranks, while Brazil and Argentina have experienced a more accelerated ranking increase over the past five years.”

We appreciate that the matrices employed in either ranking are not directly comparable. Notwithstanding, the GII, this newspaper believes, is a useful substitute for the World Bank’s Ease Of Doing Business Report, which the bank scrapped last year after claims that it was manipulated to give China a higher ranking, thus appeasing Beijing to support the bank’s replenishment. While there is no evidence that China ever profited from the alleged manoeuvres, the reputational damage to the Doing Business survey will require time and robust oversight to heal, and for it to regain people’s trust.

For Jamaica, the GII’s focus on innovation opens for the island an area for exploitation, for which it is not normally recognised, except in culture, entertainment and sport. But the potential won’t be achieved organically. It requires concerted policy action, involving the public and private sectors and their key institutions in finance and education. The prize is Jamaica being seen as the centre for innovation in the Caribbean.

In some respects, Jamaica already has a toehold on this beachhead. It is already perceived as the key centre for financial creativity and mediation in the English-speaking Caribbean, a point explicitly made by the Port of Spain-based Massy Group earlier this year when it listed on the Jamaica Stock Exchange (JSE). Indeed, it is our sense of the advance of Jamaica in the financial services sphere, and the island’s relatively robust regulatory environment, why The Gleaner urged the JSE to aggressively hunt new listings within CARICOM and elsewhere. The point bears repeating.

JIFSA WHEREABOUTS

The issue also raises questions of the whereabouts of the Jamaica International Financial Services Authority (JIFSA), an agency launched more than a decade ago to promote Jamaica as a place for international financial and business services outfits to set up shop. Perhaps the global environment has changed since 2011, pushed by the several revelations of the private financial information of high net worth individuals and politically exposed persons and new demands for governments to crack down on, and close loopholes against, money laundering. So the JIFSA, it appears, never got off the ground. It may, however, be possible for the authority to reinvent itself to meet the new circumstances.

Recently, in response to the fiscal crises facing The University of the West Indies and other universities, we suggested their engagement in R&D projects for private-sector firms – arrangements that would improve their incomes and, hopefully, produce new products and innovative processes for businesses. Jamaica’s performance on the GII adds to the legitimacy of any such enterprise and the confidence with which it can be promoted.

In addition, in 2018 the finance minister, Nigel Clarke, announced a lifting of the ban on pension funds investing in start-ups. They could put up to five per cent of their capital in such ventures. On that basis, at the end of March this year, an estimated J$35.6 billion would have been available for venture capital investment. It would be useful if the funds and their regulators provide analyses of how much, if any, of this capital has been deployed over the past five years, and if there has been demand for it by entrepreneurs with genuinely innovative products and processes.

The bottom line: if Jamaica needed validation that it can be innovative in business, it has it. It is now to just get on with the job.