In a dynamic presentation, Professor Miguel Carrillo of Trinidad’s Arthur Lok Jack Graduate School of Business (named after the famous entrepreneur) argued that the entire English speaking Caribbean is experiencing a growth crisis (most countries are projecting growth of only 2 per cent in 2011), and that this is the result of the region’s over concentration in tourism and commodities. He predicted that the Caribbean’s growth prospects would continue to be slow as long as they were based on old, as opposed to new, sources of growth.

Carrillo argued that in the case of Jamaica’s core tourism product, where repeat business was critical, it was not encouraging that the World Economic Forum’s Global Competitiveness Index ranked Jamaica only 117th out of 139 countries in terms of its customer orientation (above Trinidad but below Barbados) and 107th in terms of its capacity for innovation (all the Caribbean did very badly in this area).

The essence of competitiveness was learning how not to compete, meaning that one needed to provide a “different, unique, singular” product so that you “don’t have to compete based on price”. He observed that “Sandals was a beautiful example of not competing”, as they had created a distinctive product offering that was not sold on the basis of price. A number of attempts to duplicate their offering, in countries such as the Dominican Republic, had so far failed.

Examples of best in class innovation included Coca Cola, which was still finding new ways to sell water, sugar and colorant, Mexico’s multinational cement company Cemex (who doubled their margins when they realised they were not in the business of construction but reliability), and Starbucks, which was not selling coffee but a consumer experience.

He outlined the critical pillars of national competitiveness as including domestic investment (signifying the confidence your own people have in your country), export capacity (a good indicator of efficiency which also measures the attractiveness of your products in other markets), imports, inflows of foreign direct investment (the capacity to attract foreign investors in the right sector), the capacity to invest outside the country, and domestic innovation.

Chile, a small country of 18 million people, is now less interested in inward directed foreign investment, as they know they have to find growth abroad. As a result of this change in strategy, Chile was now the second largest investor in Peru, and the third largest investor in Columbia. The key was the size of the market opportunity, as despite Columbia’s relatively small size internationally, a market micro niche there would be the equivalent of a total monopoly in the Caribbean.

He viewed it as troubling that there were very few Caribbean joint ventures despite it being obvious that to achieve double digit growth, the Caribbean would need to grow its markets abroad.

Carrillo observes a CEO will say innovation is critical, but can’t explain how to innovate. He argues that in the Caribbean we punish failure, and regard entrepreneurs as weird and reckless.

Innovation requires the innovator to be different, relevant and generate value for customers like no one else can. Innovators must be experts in the observation of human behaviour, able to insert themselves into the cognitive, physical and emotional space of customers to narrow the gap between what customers do and say as customers lie when they respond to surveys.

Innovation is actually a human process, akin to anthropologists and psychologists learning to observe behaviour, and may require turning a physical object into the subject of emotion. Carrillo observes “It is not what customers say, not even what they do, but what they feel. One can be a great inventor, but if you don’t turn the invention into money, it is not innovation.”

Innovation should also not be mistaken for entrepreneurship. Anybody can start a business. The challenge is to turn it into a great business. Everybody makes mistakes but the innovator must make intelligent mistakes.

A great innovation process does not mean coming up with new ideas. This is actually the worst method as most new ideas are bad ideas as they are not devoted to solving problems, and when they get rejected the author doesn’t try again. Instead, the innovation process should reward teams that come up with the best problems to solve for the company. By rewarding the best problems, and turning them into innovation challenges, the company creates the necessary innovation agenda.

Carrillo observes that an example of a misplaced agenda is a development banking client that said all projects that it wanted to fund must be successful, which is not possible, although a strong innovation process could raise the success rate.

He outlines six steps, or types of individuals, required to be a champion innovator. These include an idea generator, a gatekeeper (someone close to the companies operating environment who understands market constraints), idea sponsor (provides resources and political support), project leader (ideally separate from idea generator to avoid them ignoring the negative feedback of losing money due to their prestige being invested in coming up with the idea), a user champion (think Apple computers) and an exit champion (a devils advocate with arms length perspective).

He observed that a critical part of a country turnaround (the best recent example being Columbia) was gaining the ability to retain the best local talent. Indians now prefer the Indian Institute of Technology to Harvard, whilst Chile has succeeded in bringing back PHD’s from MIT, London School of Economics and McGill through an aggressive recruitment programme. Ideas should be connected to the vision of the company (you can’t go it alone), advice which is just as relevant to a country as a company.