Barbados is among countries in the region that appear to be stuck in a “middle income trap”.
And to get out of it, Dean of the Faculty of Social Sciences at the University of the West Indies Cave Hill Campus Dr Justin Robinson suggests that businesses need to take the lead in innovation.
“Generally, when a country goes from low income to middle income then you would think high income will follow, but there are a fairly large number of countries that tend to get stuck in what we call this middle-income trap, and I think the leading economies in the Caribbean, like Barbados, Trinidad and the Bahamas fall into that zone,” Robinson said.
He also pointed out that these three economies had all lost their investment grade status and were struggling to achieve economic growth.
“In this case, you really need to develop world class firms that are leaders in particular areas, which calls for a lot of innovation, investment in human capital, and research, and our economies have not been able to do that at all well,” he told participants at a two-day conference entitled, Navigating a Path to Growth, hosted by the Cave Hill School of Business and Management.
The UWI official further argued that one of the main impediments to growth was a prevailing organizational culture, which “focuses on compliance and relationships, as distinct from a performance culture where you are setting clear goals and objectives and you’re assessing employees and managers on their ability to attain those goals.
“In an organization with a compliance culture you focus on doing things right when they should be focused on doing the right thing,” he said.
“This may involve breaking the rules and destroying old relationships,” he added.
And while suggesting that Government has a role to play in creating the right environment, he stressed that the “level of innovation, and rapid response, lies with the organizations”.
In his presentation, Professor for Global Strategy at the Ivey Business School in Canada Dr Andreas Schotter argued that Caribbean countries would be stronger on the global level if they integrated at the business level.
“One of the major factors driving investment is that companies are going into countries where they have already established connections. For example, while General Motors recently divested from India, Hyundai, Honda and Volkswagen are growing in that market because they are using it as a hub.
“I held a discussion in Panama about using that country as a hub for Latin America, and I believe that same strategy can work in the Caribbean as well,” he said.
The two-day conference at the Barbados Hilton is also sponsored by Price Waterhouse Coopers, Republic Bank and Incus Services.