Innovate or Stagnate: How Trinidad and Tobago’s SMEs Are Turning Pressure into Possibility By Dr Priscilla Bahaw
LINKAGE Q1 (2026) - REVITALISATION & TRANSFORMATIONIn today’s business environment, standing still is no longer neutral; it signals decline. For firms in Trinidad and Tobago, particularly small and medium-sized enterprises, innovation is not a luxury or a future ambition. It is a present-day requirement for survival, growth, and relevance. And yet, for years, the national conversation around business has circled the idea of diversification as if it can occur independently of innovation. It cannot. Without innovation, diversification is simply doing the same things in different sectors.Entrepreneurship alone is not enough. Starting more businesses will not transform an economy if those businesses are doing the same things, in the same ways, for the same markets. What drives real economic change is what the economist Joseph Schumpeter described as “creative destruction”. It is the process by which new ideas, new models, and new ways of doing business disrupt the old and create entirely new sources of value.The question, then, is not whether Trinidad and Tobago has entrepreneurs. It does. The question is whether those entrepreneurs and the firms they build are innovating enough to compete in a rapidly changing global economy.A Quiet Wave of Business InnovationTo suggest that innovation is absent would be inaccurate. It is happening, just not always in ways that are measured, visible, or formally recognized. Across sectors, businesses are adapting in response to shifting consumer demands, rising costs, and rapid technological change.In the food and beverage industry, for instance, innovation is increasingly rooted in cultural creativity. Traditional offerings are being reimagined and combined to create new products tailored for modern consumption patterns, tourism markets, and event-based models. Consider the emergence of a “meat doubles”; a hybrid that blends the familiar channa doubles with elements of the Trinidadian roti. This is not invention in the traditional sense, but rather a recombination of existing products into something new and valuable for a specific market. These are not trivial adjustments; they represent market-responsive innovation, where firms leverage identity, culture, and customer insight as strategic assets. Importantly, innovation does not always require significant financial investment or advanced technology. Reconfiguring existing inputs into new offerings (what we might call combinative or synthesis innovation) is equally valid and often more accessible for SMEs.In many ways, this is how some of the most impactful innovations emerge. The smartphone, for example, is not a single invention but a convergence of existing technologies i.e. a phone, camera, clock, GPS, and computing device integrated into a unified, value-enhancing product. The principle is the same: innovation is not always about creating from scratch, but about connecting what already exists in new and meaningful ways.We see also packaging innovations are also emerging. The movement from traditional glass bottles to flexible pouches and alternative packaging formats reflects more than convenience. It signals efforts to improve cost efficiency, logistics, and product accessibility.At the process level, firms are beginning to integrate digital tools, including generative artificial intelligence, into their operations. From marketing content creation to product ideation and customer engagement, AI is quietly reshaping how businesses think, plan, and execute.In agriculture and agro-processing, we are seeing early adoption of circular and regenerative approaches for reducing waste, reusing materials, and aligning with sustainability demands. Some firms are even reconfiguring their operational models, incorporating remote or hybrid work structures to reduce costs and carbon footprints while reallocating resources toward innovation and growth.These examples point to a broader reality: innovation in Trinidad and Tobago is not absent; it is evolving, adaptive, and often incremental. But incremental innovation alone is not enough to drive national transformation.The Innovation Gap: Activity Without AdvancementDespite these encouraging signs, the broader data reveals a more complex challenge.The Global Entrepreneurship Monitor Report (2014) highlights that while Trinidad and Tobago demonstrates relatively strong entrepreneurial intent and confidence, much of this activity remains replicative rather than innovative . In other words, businesses are being created but many are not introducing significantly new products, services, or processes.Similarly, global competitiveness assessments have historically pointed to limitations in the country’s innovation capacity, particularly in areas such as technological adoption, research and development, and product differentiation.Firm-level evidence reinforces this concern. A study published in 2017 examining SMEs in Trinidad and Tobago found consistently low levels of product, process, marketing, and organizational innovation, alongside barriers such as organizational culture, limited financing, skills gaps, and weak collaboration networks . See link to study [Innovation implementation by SMEs in Trinidad and Tobago ]This creates a critical imbalance. There is entrepreneurial activity but not enough innovation intensity.And without innovation intensity, businesses struggle to scale, compete internationally, or contribute meaningfully to economic diversification.From Replication to Competitive AdvantageIn traditional economic thinking, countries compete based on comparative advantage i.e. producing goods more efficiently or at lower cost. But in a globalized and technology-driven economy, this is no longer sufficient.Innovation shifts competition toward value creation.Firms that innovate are able to differentiate their offerings, command higher margins, and access new markets. They move beyond competing on price and instead compete on uniqueness, relevance, and experience.Trinidad and Tobago has already demonstrated glimpses of this potential. One of the most enduring examples is SM Jaleel’s Chubby brand; a product that illustrates how innovation in design, branding, and market positioning can transform a simple beverage into an internationally recognized offering. The success was not just in the product itself, but in how it was conceptualized and delivered to a specific audience ( children).This is the essence of business innovation: not necessarily inventing something entirely new, but reimagining value in a way that resonates with the market. The Structural Barriers We Cannot IgnoreIf innovation is so critical, why is it not happening at the scale required? The answer lies less in creativity and more in conditions. Evidence points consistently to systemic barriers:• Limited access to finance for innovation-driven activities,• Shortages of skilled and specialized talent,• Weak linkages between firms, universities, and research institutions,• Organizational cultures that do not incentivize experimentation or risk-taking.Perhaps most telling is the gap between the availability of support mechanisms and their utilization. Despite the presence of agencies and programmes designed to support entrepreneurship, awareness and engagement remain low.This suggests that innovation is not simply a firm-level challenge. It is an ecosystem challenge.The Untapped Strength of SMEsThere is, however, a significant advantage that is often overlooked. SMEs in Trinidad and Tobago are inherently agile. They can make decisions quickly, test ideas with minimal bureaucracy, and respond directly to customer feedback. In uncertain economic conditions, this flexibility becomes a powerful competitive tool.We are already seeing firms pivoting such as adopting digital platforms, entering new markets, and experimenting with new business models. But these efforts are often fragmented and difficult to scale without stronger support systems.The opportunity, therefore, is not just to encourage more innovation, but to enable existing innovation to grow, connect, and multiply.A Necessary Shift in the Diversification ConversationIf there is one uncomfortable truth that must be acknowledged, it is this: Trinidad and Tobago cannot diversify its economy by replicating existing business models across new sectors.Diversification requires difference. It requires businesses that offer something new, solve problems in novel ways, compete beyond local markets and continuously adapt to change.This is where Schumpeter’s idea of creative destruction becomes particularly relevant. For new industries to emerge, old ways of doing business must be challenged, reworked, or replaced.Innovation is not just about adding to the economy. It is about transforming it.Conclusionary RemarksFor SMEs in Trinidad and Tobago, the message is clear. Innovation is no longer optional. It is the mechanism through which firms reduce costs, create new revenue streams, enter new markets, and build resilience in uncertain times.The foundations are already there: entrepreneurial energy, cultural creativity, and emerging pockets of innovation across sectors.What is needed now is intention. A deliberate shift from replication to innovation. From activity to impact. From surviving to competing. Because in today’s business landscape, the firms that will lead are not those that do more. They are the ones that do things differently and do them well.
ABOUT THE AUTHOR Dr Priscilla Bahaw is a Lecturer and Researcher in Entrepreneurship at The University of the West Indies
In many ways, this is how some of the most impactful innovations emerge. The smartphone, for example, is not a single invention but a convergence of existing technologies i.e. a phone, camera, clock, GPS, and computing device integrated into a unified, value-enhancing product. The principle is the same: innovation is not always about creating from scratch, but about connecting what already exists in new and meaningful ways.
Trinidad and Tobago has already demonstrated glimpses of this potential. One of the most enduring examples is SM Jaleel’s Chubby brand; a product that illustrates how innovation in design, branding, and market positioning can transform a simple beverage into an internationally recognized offering. The success was not just in the product itself, but in how it was conceptualized and delivered to a specific audience ( children).