The Trinidad and Tobago economy is currently feeling some of the negative effects of the fall of oil and energy prices. Many businesses are understandably concerned about what the effects will be on them, and how are they going to navigate these rough waters.
Prosperity over the last few year has been borne from high energy prices and extensive Government spending, even while our productivity has decreased. We can’t turn back the clock, but we can make the changes necessary to put us back on a growth path.
There is ample evidence to show that Information and Communication Technology use is a key driver of innovation and productivity, even in economies where other sources of productivity gains produce lower returns or have dried up.
A 2001 working paper by Jalava and Pohjola entitled “Economic Growth in the New Economy” found that ICTs enhance a country’s economic growth in three basic ways:
- Directly through the production of ICT goods and services
- Indirectly through the use of ICT in the production of other goods and services
- And the increasing application of ICTs leads to rising productivity
ICTs can help transform societies by improving access to services, enhancing connectivity, and creating employment opportunities through entrepreneurship and new business models.
The World Economic Forum, WEF, realising this transformative impact created the Global Information Technology Report (GITR) in 2001, and the Network Readiness Index (NRI) to help measure and rank the performance of participating countries in the use of ICTs.
Trinidad and Tobago in the 2015 release of the GITR ranked 70th out of 143 countries, placing 8th in the Latin America and the Caribbean region, and 2nd behind Barbados in the Caribbean, who ranked 39th.
A large reason for this can be seen by our rank in the Environment sub-index, where we ranked 89th, which is a measure of the extent to which the market conditions and regulatory framework support entrepreneurship, innovation, and ICT development. The Government clearly has their part to play.
But what is notable that while our ranking on individual usage of ICT is 58th, our business usage ranking is 86th. And our ranking for the Economic Impact of ICTs – a measure the effect of ICTs on the economy through technological and non-technological innovations – is 84th. It means that the private sector and business community are not doing their part either.
Greater investments into ICTs by businesses can help them to grow even in these turbulent times. Small and Medium Businesses, SMEs, are poised to make the most out of ICT investments as they are more nimble and can make faster decisions.
Businesses should, therefore, take the opportunity now, when things may be slow, to implement business improvements. While it seems difficult to spend time and money on improvements with less revenue, when the upturn comes around, it would mean that you are better able to take advantage of it.
This post was written for the T&T Chamber of Industry and Commerce and appeared in the Newsday Business Magazine on May 5, 2016. It has been modified slightly for this post.