by Lipton Matthews
Establishing a business venture is a risky and uphill task, therefore, we sympathise with the plight of private entrepreneurs, but we will not accept their inertia in Jamaica.
For years, business magnates have portrayed Jamaica as an “unfriendly business environment”. Although this characterisation is somewhat truthful, it doesn’t change the fact that several of our local entrepreneurs have refused to embrace innovation as a way of life.
Innovation may be seen as an expense, but without it companies will become obsolete. Historically, innovative firms tend to outperform their competitors. Research conducted on innovation by London School of Business indicates that organisations that focus only on incremental product enhancement cannot prevent decline in their own market as they mature and new competitors enter the field.
Another recent study by Pricewaterhouse-Coopers concludes that the UK’s most innovative grew on average 50 per cent faster than the least innovative over the last three years.
Although R&D expenditure may contribute to innovation, fostering a culture of innovation in your organisation is more important. For example, according to the results of a Boaz and Company 2011 survey on global innovation, seven of the top 10 innovators were not among the big spenders on R&D.
A company’s cultural alignment to its innovation strategy plays a more decisive role in determining innovation than investment in product development. Companies, therefore, with higher levels of alignment have a 30 per cent higher enterprise value growth and 17 per cent higher profit growth than businesses with low degrees of alignment.
However, the importance of R&D cannot be understated. Many global firms have made the creation of research institutes a priority. One such firm is Samsung Electronics, operator of Samsung Advanced Institute of Technology. This institute was established to create disruptive technologies and new businesses.
Local entrepreneurs may not have the capital to develop world-class institutes, but it’s not odd to expect groups like the Private Sector Organisation of Jamaica to develop cooperative research networks. It is time for private entrepreneurs to accept their role as wealth creators and stop complaining about everything, because there is no such thing as the perfect business environment.
Lipton Matthews is a second year law student and is unusual in being a young Jamaican Libertarian-Conservative who believes in the virtues of Capitalism. He can be reached at email@example.com