Entrepreneurship and innovation

Paulette Dunn-Smith, Contributor

Knowledge has now become a key driver of competitiveness. A country's knowledge base will determine its growth path. So a county which has an educated workforce is one that is likely to be creative and innovative, which in turn, will produce growth. An increase in our educational levels and knowledge base will help spur on creativity and innovation.

An area which a number of countries have been focusing on recently in order to improve their productivity levels is that of entrepreneurship and innovation.

Let us examine entrepreneurship and innovation.

Entrepreneurs make things happen. They are individuals who take a concept and convert it into a reality, a product, policy, or an institution. They become the champions of a new process and are engines of change. Openness to new ideas, freedom from investigation of operation, promotion, and pay based on merit encourage entrepreneurship. On the other hand, excessive regulation, a rigid hierarchy, a lack of freedom, and excessive control discourage entrepreneurship.

Innovation is a process whereby individuals develop new ideas or adapt existing ones to create new products. An innovation starts as a concept that is refined and developed before application. It is not only about scientists working in a laboratory to "discover" or create new products. It is also about building the capacity of people - the workforce - to find practical solutions to everyday developmental challenges. Entrepreneurs are needed to take these ideas and new products and create businesses out of them.

Innovation comes in many forms. It is seen in products, processes, and services that meet the needs of the market. Innovation can also come by way of using the factors of production - raw materials, physical and mental labour, and money - combined in new ways. Examples of innovation include:

• Mechanical - trucks, cars
  
• Chemical - pesticides
  
• Biological - seed varieties
  
• Managerial - performance management schemes, overtime pay
  
• Institutional - patents, credit unions, stock market.

Entrepreneurs, as innovators, are people who create new combinations of these factors and then present them to the market to be used by consumers. Oftentimes, the innovation is developed and marketed in the manufacturing sector, but innovation can also come in the form of remodelling a business process.

In the past, most innovations were introduced by practitioners. Even now, practitioners are important innovators. They identify a way to meet needs. The scientific discoveries of the late 19th century gave rise to science-based innovations (Edison, Bell). Major companies (McDonalds, Sony, Bell, Kodak) built their own research labs. Locally, we have examples of public-sector laboratories which  have made important agricultural and scientific discoveries. Today, universities and start-up companies are becoming major sources of new innovations.

Innovation and growth occur through the development and use of human resources (human capital), and increasingly, with the use of technology. Individuals need a range of skills and knowledge - gained through education and training - to create and innovate. Having innovative, skilled, knowledgeable workers in the workforce will facilitate and stimulate the growth and development of a competitive Jamaican workforce.

New businesses can also be created within companies by internal innovation (intrapreneurship) and, or re-engineering of their business processes. Examples of internal innovation include:

• Developing a special business unit;
  
• Contracting and; or out-sourcing business processes;
  
• Introducing a research and development unit;
  
• Designing and implementing a new business model;
  
• Merging or divulging some units.

Individuals and companies should be rewarded for innovation. Incentives for innovation include patents, copyright protection, trade secrets, and prizes. However, we have seen in the past a number of examples where indigenous knowledge has been poorly protected, for example, the steel pan of Trinidad and Tobago and reggae music, and Blue Mountain Coffee of Jamaica. So it is important that innovators become knowledgeable about their rights and privileges as creators.

In previous articles, we looked at the skills that are necessary for a competitive workforce, including numeracy and literacy skills, problem solving, social and interpersonal skills, along with the technical skills. These skills are critical to innovate and to create.

The World Competitiveness Report for 2010-2011 ranks our capacity for innovation 107 out of 139. Jamaica has reasonable research facilities, however, based on the report, the availability of engineers and scientists is ranked 123 out of 139 countries. We, therefore, need to seize the opportunity to produce strong literate and numerate graduates and encourage creativity and entrepreneurship during the skills-development process for us to improve our entrepreneurship and innovative capacities and improve Jamaica's workforce productivity and competitiveness.

Paulette Dunn-Smith is an international trainer and workforce development expert. She is the executive director, Dunn, Pierre, Barnett & Associates Ltd. & chairman, Caribbean Career and Professional Development Institute. Contact her at pdunn@dpbglobal.com or www.dpbglobal.com.