Dr Ju­dith Mark

Hy­dro­car­bons have been the main­stay of the T&T econ­o­my, con­tribut­ing about 36 per cent of GDP and about 80 per cent of ex­ports since 2020. Con­tin­ued re­liance on this sec­tor, how­ev­er, pos­es a threat, giv­en glob­al volatil­i­ty of en­er­gy mar­kets, de­clin­ing lo­cal pro­duc­tion and in­creased em­pha­sis on al­ter­na­tive en­er­gy. While the con­tri­bu­tion by the non-en­er­gy sec­tor to GDP has trend­ed up­wards, di­ver­si­fi­ca­tion is nec­es­sary to re­duce the de­pen­dence on hy­dro­car­bons and to po­si­tion the coun­try to achieve long-term re­silience and glob­al com­pet­i­tive­ness.

The case for di­ver­si­fi­ca­tion through in­no­va­tion

In or­der to en­sure that T&T achieves growth and re­silience, the ap­proach to di­ver­si­fi­ca­tion must be strate­gic. In­no­va­tion is the en­gine that dri­ves di­ver­si­fi­ca­tion and must be em­bed­ded in­to T&T’s growth strat­e­gy. In­no­va­tion al­so has the po­ten­tial to cre­ate added val­ue in ex­ist­ing in­dus­tries, spawn new ones, and and strength­en com­pet­i­tive­ness, as ev­i­denced by growth in Sin­ga­pore, Cos­ta Ri­ca and the Unit­ed Arab Emi­rates, coun­tries which have suc­cess­ful­ly di­ver­si­fied through in­no­va­tion.

T&T like­wise needs to in­crease the con­tri­bu­tion to GDP by the non-en­er­gy sec­tor, util­is­ing in­no­va­tion to cre­ate scal­able and sus­tain­able, ex­port-led prod­ucts and ser­vices.

Iden­ti­fy­ing sources of In­no­va­tion and chan­nelling re­sources to the right ar­eas

In­no­v­a­tive ideas in T&T come from uni­ver­si­ties, the cor­po­rate sec­tor, in­cu­ba­tors, gov­ern­ment pro­grammes and com­mu­ni­ties. How­ev­er, not every in­no­v­a­tive idea pos­sess­es the po­ten­tial for com­mer­cial­i­sa­tion or to con­tribute to the di­ver­si­fi­ca­tion agen­da.

What cri­te­ria is used to de­ter­mine the in­no­va­tions that move fur­ther along the path to­wards com­mer­cial­i­sa­tion in T&T?

Are the in­no­va­tions sup­port­ed by state pro­grammes, those that have strong val­ue propo­si­tions, mar­ket po­ten­tial, scal­a­bil­i­ty, and the po­ten­tial to be­come glob­al brands?

A rec­om­men­da­tion is to give pri­or­i­ty to ar­eas that con­tribute to­wards ICT readi­ness, food se­cu­ri­ty, so­cial eq­ui­ty and are net for­eign ex­change earn­ers.

Whether through com­pe­ti­tion or se­lec­tion, us­ing the right met­rics and chan­nelling re­sources strate­gi­cal­ly, will in­crease the po­ten­tial for com­mer­cial­i­sa­tion of in­no­va­tions in sec­tors with the po­ten­tial for growth, scal­a­bil­i­ty, and con­tri­bu­tion to di­ver­si­fi­ca­tion.

Chal­lenges in the di­ver­si­fi­ca­tion through in­no­va­tion strat­e­gy

In­no­va­tion can on­ly ful­fil its role as a dri­ver of growth when brought to mar­ket. The aim then is to in­crease the num­ber of in­no­va­tions suc­cess­ful­ly com­mer­cialised, there­by in­creas­ing T&T’s in­no­va­tion out­put. The coun­try has con­sis­tent­ly ranked low in in­no­va­tion out­puts as wide­ly ref­er­enced in in­ter­na­tion­al re­ports on in­no­va­tion. Of note, is that al­though T&T ranked 93rd in in­no­va­tion in­put in the GII 2024, its rank­ing in in­no­va­tion out­put was even low­er at 119th. This in­di­cates that T&T’s in­no­va­tion ef­fort has not re­sult­ed in a com­men­su­rate lev­el of out­put.

Re­search con­duct­ed by this au­thor in­di­cates that there are chal­lenges in the com­mer­cial­i­sa­tion of in­no­va­tions. In dis­cus­sion with a sam­ple of T&T in­no­va­tors, ac­cess to fund­ing was cit­ed as a ma­jor chal­lenge. This is not sur­pris­ing, giv­en the scarci­ty of risk/ven­ture cap­i­tal funds, pub­lic-pri­vate part­ner­ships, re­sults-based fi­nanc­ing, cor­po­rate ven­tur­ing or nov­el in­stru­ments cre­at­ed to fi­nance in­no­va­tion. One in­no­va­tor lament­ed that mi­gra­tion be­came the on­ly op­tion to ac­cess fund­ing to bring his in­no­va­tion to mar­ket, fol­low­ing failed at­tempts lo­cal­ly, and de­spite hav­ing ob­tained in­ter­na­tion­al recog­ni­tion and ver­i­fi­ca­tion.

An­oth­er chal­lenge iden­ti­fied is the in­abil­i­ty to ef­fec­tive­ly pitch to glob­al in­vestors, a feel­ing de­scribed as cul­tur­al in­se­cu­ri­ty, which re­duces the con­fi­dence to ne­go­ti­ate share­hold­ers or part­ner­ship agree­ments with es­tab­lished in­ter­na­tion­al play­ers.

In­no­va­tors in T&T are gen­er­al­ly re­luc­tant to give up eq­ui­ty due to the fear of los­ing con­trol, a feel­ing root­ed in con­cerns of trust and lim­it­ed knowl­edge of in­no­va­tion fi­nanc­ing. This fear per­sists, de­spite the in­no­va­tors abil­i­ty to in­flu­ence the part­ner­ship terms in­clud­ing ex­it arrange­ments that can pro­vide for rights of first re­fusal op­tions.

An­oth­er area of con­cern ex­pressed is T&T’s ca­pac­i­ty to cre­ate pro­to­types at man­u­fac­tur­ing stan­dard. It was in­di­cat­ed that while the Cariri Fab Lab was a wel­come move, there is a lim­i­ta­tion with re­spect to the lev­els of test­ing to­wards com­mer­cial­i­sa­tion. This means that in­no­va­tors are re­quired to make al­ter­na­tive arrange­ments for full com­mer­cial test­ing. Sup­port from Cariri in such cas­es may how­ev­er still be pro­vid­ed.

Oth­er chal­lenges iden­ti­fied in­clude the for­eign ex­change crunch, which ac­cord­ing to one in­no­va­tor re­sult­ed in him hav­ing to scale down busi­ness op­er­a­tions. Lim­i­ta­tions with re­spect to a cadre of tech­ni­cal­ly knowl­edge­able per­sons to con­duct train­ing pro­grammes and to serve as men­tors were al­so stat­ed.

Mea­sures to in­crease the com­mer­cial­i­sa­tion of in­no­va­tions

Trinidad pos­sess­es im­mense po­ten­tial to bring in­no­va­tions to the mar­ket, how­ev­er, to do so re­quires con­sis­ten­cy as to the de­f­i­n­i­tion of in­no­va­tion, to de­ter­mine what projects to sup­port. A suit­able mix of fi­nanc­ing to sup­port in­no­va­tion is al­so re­quired. This in­cludes ven­ture cap­i­tal, pri­vate eq­ui­ty, cor­po­rate ven­ture funds, R&D funds, pub­lic pri­vate part­ner­ships, and men­tor­ing ser­vices.

With re­spect to in­tel­lec­tu­al prop­er­ty, ed­u­ca­tion is nec­es­sary to ex­pose per­sons to al­ter­na­tive ways to pro­tect in­no­va­tions, giv­en the ini­tial and con­tin­u­ing costs of IP pro­tec­tions. A cal­cu­lat­ed IP and first to mar­ket strat­e­gy may at times be best for in­no­va­tors ac­cord­ing to in­dus­try, in­vest­ment re­quired, and risk pro­file. “Patentabil­i­ty is not al­ways a ne­ces­si­ty for mar­ket suc­cess.” In­for­ma­tion on the range of train­ing ser­vices of­fered by the Trinidad & To­ba­go In­tel­lec­tu­al Prop­er­ty Of­fice should how­ev­er be wide­ly com­mu­ni­cat­ed.

In­no­va­tion fi­nanciers pay at­ten­tion to the ex­pe­ri­ence of founders and their team. Ac­cord­ing­ly, in­creased em­pha­sis on pri­vate sec­tor in­tern­ship pro­grammes that pro­vide prac­ti­cal ex­pe­ri­ence and sup­port the ini­tia­tives of the Uni­ver­si­ty of the West In­dies and Met­al In­dus­tries Com­pa­ny Lim­it­ed, are rec­om­mend­ed.

In­no­va­tion out­put must at all times be mea­sured and eval­u­at­ed against na­tion­al in­no­va­tion and di­ver­si­fi­ca­tion agen­da, and the in­di­ca­tors of suc­cess as de­fined.

Pol­i­cy ini­tia­tives for in­no­va­tion to dri­ve di­ver­si­fi­ca­tion

Pol­i­cy ini­tia­tives are es­sen­tial if in­no­va­tion is to suc­cess­ful­ly dri­ve di­ver­si­fi­ca­tion. Poli­cies de­vel­oped are ex­pect­ed to en­sure that the ecosys­tem is con­ducive for op­ti­mis­ing the re­turn on in­no­va­tion in­puts and in­creas­ing out­puts in the ar­eas iden­ti­fied for di­ver­si­fi­ca­tion. Gov­ern­ment, there­fore, must en­sure that the poli­cies re­sult in the sys­tem­at­ic co­or­di­na­tion of ini­tia­tives and in­sti­tu­tions. The di­a­gram high­lights key pol­i­cy ar­eas that should be re­viewed.

Notwith­stand­ing the chal­lenges to in­no­va­tion, es­tab­lished com­pa­nies like An­gos­tu­ra and KC Con­fec­tionery con­tin­ue to be at the fore­front of in­no­va­tion. More re­cent­ly es­tab­lished busi­ness­es such as Wi­Pay, Epil­imnion Aqua­cul­ture, Uber­green Foo­da, and prod­ucts such as FlikaStix, elec­tron­ic steel pan sticks, the in­ter­na­tion­al award win­ning, lead bat­tery re­gen­er­a­tion de­vice, the Bat­tery Al­chemist and the G-pan are tes­ti­mo­ny of the in­no­v­a­tive skills that cit­i­zens pos­sess, and which should be sup­port­ed to in­cen­tivise­ex­ist­ing and up­com­ing in­no­va­tors.

T& risks se­vere eco­nom­ic and so­cial de­cline should im­me­di­ate at­ten­tion not be giv­en to di­ver­si­fi­ca­tion. In­no­va­tion can ac­cel­er­ate the path­way to­wards di­ver­si­fi­ca­tion, pro­vid­ed bar­ri­ers are re­moved and chal­lenges are con­front­ed. How and where T&T in­no­vates de­pends on the lens used. A nar­row vi­sion will not re­sult in the val­ue en­hanc­ing, scal­able, T&T-brand­ed in­no­va­tion with glob­al reach, re­quired for di­ver­si­fi­ca­tion. The clar­i­on call to build a cul­ture of in­no­va­tion must be heed­ed with im­me­di­a­cy.