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Caribbean Firms: The Path to Job Creation is Innovation

Firms play a key role in development through investments, engaging in trade, creating jobs, increasing productivity, and providing a wide range of goods and services needed to improve living standards. However, because of crime, Caribbean firms see their annual sales reduced by 6 percent.

Undoubtedly, crime is an issue of concern for policy makers and citizens in the Caribbean. An average of 40 percent of the Caribbean population identifies crime and security-related issues as the main problem facing their country, even above poverty, the economy or inequality. Indeed, to develop a dynamic and innovative business, firms ought to invest more resources in research and development than on crime prevention. The average expenditure on research and development by Caribbean firms represents 3.17 percent of total sales, which is lower than the 4.37 percent reported for crime-related expenditure.

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During 2007–2009, around 70 percent of Caribbean firms were classified as having stagnant sales or employment. By comparing private investment as a percentage of gross domestic product and private investment as a percentage of total investment between the Caribbean and the rest of small economies (ROSE), the numbers show that these indicators were systematically lower in the Caribbean.

Crime prevention remains a priority for policy makers and private firms. However, this concern has limited the resources invested in other relevant fields such as research and development. Only a dynamic, innovative, and exporting private sector can become a major driver of a country’s economic growth and contribute to job creation. To design and implement effective solutions to crime and violence in the Caribbean more information on the topic is needed.

From a report by the Caribbean Economic Team titled “An Engine of Growth? The Caribbean Private Sector Needs More Than an Oil Change,” by Inder Ruprah and Ricardo Sierra.

Image: “Police Crime Scene Tape” by Jobs For Felons Hub is licensed under CC BY 2.0

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