I had the distinct pleasure of attending DLIC 2011 featuring Professor Michael E. Porter on March 25. As a business student I studied Porter’s 5 forces model and various strategies on competition so it was indeed an honour to be part of his live presentation. His topic centred on The Competitive Advantage of Nations and Regions which spoke about the fundamentals of prosperity. The main lesson I took away from the presentation was that “productivity determines prosperity”.
He stated that “Caribbean countries need a strategy to improve competitiveness, and not be satisfied with macroeconomic recovery. Competitiveness is the productivity with which a nation uses its human, capital, and natural resources.” He went on to explain that the external business environment conditions that enable company productivity and innovation determine the quality of the national business environment. The quality refers to labour, infrastructure, efficient access to natural endowments, the context for firm strategy and rivalry, sophisticated and demanding local customers and of course the availability of suppliers and supporting industries.
Professor Porter also had some fascinating statistics from the World Bank. An interesting indicator was the Labour Participation Rate in Trinidad and Tobago. We ranked at 50% but our GDP per capita is only 58 compared to Barbados with 3 and Jamaica with 99. So are we really being productive? The Global Corruption Report 2010 shows T&T as having low corruption but was worsening.
In addition, some of the issues in the Caribbean Business Environment include
- Low skills (Education Index – T&T ranked at 83, Jamaica at 77 and Barbados at 62.)
- Brain drain
- Bureaucracy and red tape – complicated to do business
- Weak property and contractual rights
- Barriers to domestic and international competition, despite significant progress in removing barriers within the region
- High communication costs
- Costs of crime and corruption
- Limited sophistication of company strategies
- Low innovative capacity
Professor Porter’s advice to the business community and government was that we should not use the existing culture as an excuse. There is a need for strategy and a list of priorities of what needs to be done and a plan of action. He asked what are the distinctive assets we have as individuals, companies and a country that we can build on. In order to foster a more entrepreneurial T&T, there has to be long term investment in knowledge creation, removing cultural barriers to innovation and internationalisation and in developing innovation and collaborative skills.
Another area he touched on was the idea of clusters. Clusters overlap to share infrastructure, technology, services, etc. It is hard to be productive if isolated.
Professor Porter ended his presentation by asking us “How does your company innovate? What percentage of revenue comes from new products and services? How are you organising for competitiveness?” Very thought provoking questions that I think few companies can properly answer.
The other features of DLIC 2011 were the launch of the Caribbean Centre for Competitiveness by the Prime Minister and a presentation of the Global Entrepreneurship Monitor Report by Professor Miguel Carrillo. Other notable items were the panel discussion, the food and the networking reception afterwards. All in all it was very enlightening and inspiring and I commend the Lok Jack GSB for hosting another successful conference and look forward to DLIC 2012.
