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Glen Hodgson
Senior Vice-President and Chief Economist |
The concept of innovation can and should be a hot topic for all organizations and nations. I had the opportunity recently to take our ideas on innovation to leaders in Puerto Rico. Little did I know that I would be making a cameo performance as their “star presenter” for a day!
First, what is innovation? There are many competing definitions, but in the simplest terms, innovation is making changes big and small that create value -- changes that increase productivity, improve efficiency or launch new initiatives, thereby creating value by increasing profits for firms, or strengthening the financial capacity of public sector organizations. In an ever-more integrated and competitive global economy, innovation will be the thing that separates mediocre from good, and good from great.
Next, why Puerto Rico? The island is a natural and historic contact point between Latin America and North America, and could build further on that positioning, but it has been mired in an economic slide for decades. Formally part of the U.S., Puerto Rico has missed a sustained economic take-off. Although rich by Caribbean standards, average incomes are about a third of U.S. levels and the income gap has grown since the 1970s. Social inequality has worsened and many bright young people continue to leave to the continental U.S.
High taxes and heavy regulations constraint business investment and growth, and well-intended but poorly-designed income support programs discourage engagement in the work force. Less than half of Puerto Rican adults are active in the work force, relying instead on various income support programs. This is a classic welfare trap -- and clearly not a recipe for social or economic success.
As part of a renewed effort to change things for the better, I was invited to speak at a first-ever forum on education that was organized by the Puerto Rico Chamber of Commerce. They invited me principally because of the leading-edge work done a few years ago by the Conference Board of Canada that defined innovation skills, including a template for self-evaluation of an individual's aptitudes for innovation versus the requirements of their job for innovation. A forward-thinking leader within the Puerto Rico Chamber of Commerce, Pablo Figueroa, found our innovation skills research on the internet and invited us to come and speak about it. So I went.
That's one of the advantages of being a not-for-profit organization; we can develop cutting-edge ideas, with the support of our members, and then share them via the internet with the world.
So how did things unfold? It turned out that I was the featured key-note speaker at the education forum – and part of the branding to bring together leaders from business, government, education, organized labour and civil society in Puerto Rico. My face was plastered all over thousands of promotional flyers. When I arrived at the event, everyone seemed to know me! As for my speech, I got to use my university Spanish from thirty five years ago to say a few opening sentences (Buenos dias. Gracias por la opportunidad de presentar hoy...)
In my presentation, I linked together our research on globalization, productivity, human capital and the need to foster innovation. My "cameo role" continued through the day by sitting at lunch with two members of the Puerto Rican Cabinet, and then accompanying the new Secretary of Education -- a very bright, well educated (PhD from Penn State) and dynamic woman just invited into Cabinet-- on a school visit photo op, and to a meeting with her ministry’s senior management team to repeat the message on education and innovation.
All that was cool, but what next? The Conference Board of Canada will continue to seek out ways to do path-breaking research on innovation, to help Canadian leaders grasp the concept, develop effective strategies and implement them. Leaders in Puerto Rico would be well advised to do the same. Since the Conference Board of Canada is engaged in economic development work in the Caribbean and elsewhere, we could be interested in providing support via research and facilitation -- but it's up to leaders in Puerto Rico itself to build the momentum for change and to promote a more innovative and competitive economy.