Don Robotham | Jamaica as a developmental state

We must distinguish between ‘growth’ and ‘development’. Growth is simply an increase in GDP, however achieved. Development, however, is the transformation of the production structure. This difference is captured in Harvard’s ‘economic complexity index’ which attempts to measure an economy’s production structure, including tech knowledge. In the most recent data set (2020) Jamaica is ranked 83 out of 133 countries with an ECI value of -0.357836. In 2010 we ranked 64. In comparison Costa Rica was ranked at 48, Trinidad and Tobago at 55, and the Dominican Republic at 62.

GDP growth by itself fails to capture complexity. Many resource-rich countries such as Guyana can have rapid GDP growth but there is little technology transfer and zero innovation capacity so they have low complexity. When the oil runs out, which it will, they are back to square one. Many African countries are struggling to escape this ‘resource curse’ and to develop advanced manufacturing of EV batteries from the lithium mined within their borders. Failure to develop complex economies is the underlying force behind the debt crisis in the Global South. Thus, we must think in terms of development, not simply growth, and we should have had a Development Council, not a Growth Council. We need a ‘developmental state’, not a ‘growth state.’

DISMAL LANDSCAPE

We do not grasp the urgency of our situation. December coming is three years and UTech will still be without a permanent president. We have about 495,600 people in the informal sector. In the UTech-GEM 2021/22 survey, of 2,300 entrepreneurs from 14 parishes they found that 78 per cent of established businesses and 74 per cent of new businesses did not expect to earn any revenue from overseas. Ninety-three per cent were using either low or ‘no technology’ in their firms. This has not improved since the 2016/17 survey. Further, 61 per cent of new businesses and 75 per cent of established businesses did not use any digital processes to sell their products “because their business didn’t really require it”. Eighty-five per cent of new businesses and 78 per cent of established businesses HAVE NEVER HEARD of the UN Sustainable Development Goals, let alone to think about implementing them! Our low complexity ranking should come as no surprise.

Jamaica is one of many countries stuck in this low-tech trap — the Harvard data set ranks us in the second-to-lowest group. On the one hand, we cannot compete with low-wage mass manufacturers like Bangladesh. On the other, we cannot participate in high value-added global supply chains. So, if left to market forces we sink, with dire consequences for crime and social chaos. Many of these low-tech countries – like El Salvador – face punishing crime rates. Economic failures have broad consequences and are the root cause of social chaos. Lifting ourselves out of low-tech, low value-added production is the only way to permanently transform this dismal landscape and the only sustainable route to social stability and a low debt:GDP ratio. Not El Salvador-style repression which fails to address root causes.

DEVELOPMENTAL ISLAND STATE

We need a state which picks winners, for the market is only delivering losers. But a Developmental State is incompatible with IMF free market thinking which captivates Jamaican policymakers. Developmentalism requires an entirely new industrial policy framework and a thorough revamping of the entire educational ecosystem. It needs to be more research-focused on technology transfer. We cannot evade the problems of poor performance in English, math, and the sciences by setting up stand-alone training outside the formal system. The formal system is HEART’s recruiting ground. How could HEART be strong if it rests on this weak foundation?

LIFEBLOOD OF ECONOMY

The priority given to the endowment of a Fiscal Research Institute is a classic expression of failure to grasp the urgent need to enhance our economic complexity. In his budget speech, the minister of finance declared that financial services were “the lifeblood of the economy”. Not the productive sectors – not technology, manufacturing, not our small farmers, nor tourism, nor our BPO workers threatened with collapse; not teachers nor medical personnel. But financial services. If you believe that financial services are “the lifeblood of the economy”, then it does indeed follow that you should focus exclusively on endowing a new Fiscal Research Institute to the tune of $200 million.

In South Africa, citrus exports have been one bright spot of innovation and creativity. Their Citrus Growers Association has established a highly successful ‘Citrus Academy’ and they have their research-oriented ‘Fruit Journal’ driving the process of agricultural innovation. We, instead, get a Fiscal Research Institute. The message could not be clearer: Finance is ‘it’, not the real economy of production, productivity, and economic complexity.

INSTITUTIONALISING PERMANENT INNOVATION

Tech innovation is a moving target, constantly advancing to new frontiers, constantly making existing production systems obsolete. It’s not like you upgrade once and you’re set. It’s a treadmill. So, you must institutionalise permanent innovation. STEM graduates by themselves do not produce innovation unless they have an institutional structure to identify specific sectoral tech priorities with mechanisms to commercialise them. Otherwise, STEM graduates migrate – Canada will gladly snap them up! So, we must transform our overall institutional structure if we are to raise our complexity index. And we must do all this while continuing to reduce our debt to GDP ratio and maintaining fiscal responsibility.

We need an institutional structure governing technological innovation which is more than a collection of fragments which do not fit together. The present arrangement is opaque. There is the Scientific Research Council, the National Commission on Science and Technology, the Ministry of Science, Energy and Technology, and UWI’s Faculty of Science and Technology and UTech. Then there is the Development Bank of Jamaica, JAMPRO and the EXIM bank. The relationship of these bodies to each other is unclear, to put it politely. How any innovations are ever introduced into any specific cluster of firms or farms remains a mystery.

JAMPRO, DBJ, the EXIM bank and the tech institutions need to be tightly integrated in their operations. Line ministries like agriculture and industry need to be brought into the mix. ‘Manufacturing’ can’t be thought of separately from ‘services’ separately from ‘agriculture’. They are all part of a single production ecosystem as the growing ‘industrialisation of freshness’ demonstrates. In Jamaica today, when you buy a local box of orange juice or milk, you are sending money to Sweden. They are the inventors of the containers which keep these products fresh, not us.

Thinking of ‘the state’ and ‘the market’ ideologically – as opposing entities – is unhelpful. They are simply techniques to be utilised as needed to achieve our development goals. We must proceed pragmatically according to what the data tells us works. Our tech road will be a niche one, tailored to our innate creativity and small-scale operations. An innovation system for small island tech is our unique need. We must capitalise on our specific brand advantages just as the French capitalise on luxury brands: a high-tech, high value-added, high-quality version of ‘tun yu han’ mek fashion’ driven by global market demand. This requires strong state intervention – all hands on deck. A wholesale change of mentality and of our policy framework is needed. Token gestures of a PR nature will not cut it.

Don Robotham is professor of anthropology and founding director of the advanced research collaborative of the graduate centre, City University of New York. He was pro vice chancellor for graduate studies and research at UWI. Send feedback to drobotham@gmail.com