Micro, Small & Medium Enterprise Development in the Caribbean: Towards A New Frontier - | 98
However, the more radical and revolutionary innovations tend to emerge from R&D, while more incremental innovations may emerge from practice. However, there are many exceptions to each of these trends. An important and obvious innovation driver is customers buying products or using services. Increasingly, firms are incorporating users in focus groups (user-centred approach); working closely with so-called lead users (lead user approach); or users might adapt products themselves.
5.2 Best Practices in MSME innovation Best practices in SME innovation are mainly attributed to the models used to support innovation in the USA. However, the country of reference for emerging economies is Israel, but both sets of practices are well advanced, and are therefore difficult to relate to from a developing country perspective.
The Global Innovation Index (GII) is the point of reference for best practices in innovation across the developed and developing world. GII relies on two sub-indices: the Innovation Input Sub-Index and the Innovation Output Sub-Index, each built around pillars. Five input pillars capture elements of the national economy that enable innovative activities: 1) Institutions; 2) Human capital and research; 3) Infrastructure; 4) Market sophistication; and 5) Business sophistication. Aditionally, two output pillars capture actual evidence of innovation outputs: 6) Knowledge and technology outputs and 7) Creative outputs. Each pillar is divided into sub-pillars and each sub-pillar is composed of individual indicators (79 in total). Sub-pillar scores are calculated as the weighted average of individual indicators; while pillar scores are calculated as the weighted average of sub-pillar scores. The framework is revised every year in a transparent exercise to improve the way innovation is measured. The methodology used is highlighted in Figure 5.2 below.
Figure 5.2: Methodology used to Establish Rankings on the GII
Source: Global Competitiveness Index, 2015