Inter-American Development Bank (IDB) chief of Operations (COO), Adriana La Valley, said for 10 years Jamaica’s private sector growth has remained flat with a total factor productivity of 1.6.

This measure of efficacy of a company’s production process is affected by what La Valley told Jamaica Observer’s Caribbean Business Report, was a lack of investment in innovation.

“I would like to invite the private sector in Jamaica to move from efficiency-driven to innovation-driven ,” the COO said. “Innovation and use of technology solutions is the key to breaking the cycle.”

La Valley explained that while banks and investors may be inclined to offer policies and loans to established companies, it is actually start-up businesses that may have the innovative ideas that can become a successful venture and influence economic growth.

She then added that while small and medium-sized enterprises (SMEs) are not always able to tap into the banking sector, she believes that the instrument that start-up businesses need is innovation, not a bank loan.

“Typically, the private sector in Jamaica has a ceiling because it only taps into the local market, which is small, but if you start using technology and start innovating, then you can start exporting and your market will exponentially grow, therefore any product or service you have is available to a wider market,” she shared.

La Valley noted that many businesses in other countries are developed and delivering services with customers in mind — the approach Jamaican SMEs should apply.

The Planning Institute of Jamaica’s Economic and Social Survey for 2018 revealed that Jamaica was ranked 79th of 140 countries in the Global Competitive Report 2018, published by the World Economic Forum.

“There are a lot of youths that have been trained in technology,” she added. “Let’s not miss that opportunity. Be bold and think differently on not only on what we have, but on what we want to see and how we can make it happen.”

As for new initiatives, La Valley said IDB and the Development Bank of Jamaica (DBJ) partnership can be expected.

“IDB will be working very closely with the Development Bank of Jamaica to improve the entrepreneurship and innovative ecosystem,” La Valley said.

She continued that the IDB and the DBJ want to help angel investors — individuals that provide capital for start-up businesses — to feel more comfortable in investing in businesses that are at a higher risk, especially the ones that are just testing the market.

The programme will directly focus on SMEs and will provide support and advice to start-up businesses on how to drive innovation.

“We’re seeing it from a holistic point of view,” she explained. “We need to see the whole ecosystem and intervene in each stage. Our recommendation is to concentrate on the whole segment of the SME spectrum, but from the early stage, start-up and established businesses with the potential to grow.”

She added that initiatives like the Private Sector Organisation of Jamaica’s SMEs Empowerment workshop that was held on Wednesday is important in acknowledging and understanding the customer’s point of view as to see where gaps in the business are and closing them.