Three months into its term, the new Government has kept several campaign promises, but a clear plan for sustainable growth and income generation is still missing. Initiatives like laptops for schoolchildren, the Children’s Life Fund, and clearing flooding debris are welcome, but they come at a cost. Without a bold and focused drive to diversify the economy, create jobs, boost tax revenues, and earn foreign exchange, managing the growing national debt will become more and more challenging.
Perhaps such plans are in the works, and yes, it is still early days. But five years is barely half the time required to build sustainable industries. The longer we wait to start, the greater the risk of falling short.
The need to diversify away from our dependence on oil and gas has long been recognised. Yet, despite decades of declarations, diversification efforts remain fragmented and siloed. Ministries and agencies continue to pursue agriculture, tourism, manufacturing, and ICT initiatives largely in isolation, with little strategic coordination. This fragmented approach undermines competitiveness, results in policy incoherence, and prevents the country from harnessing the transformative power of industry clustering.
Clusters are geographic concentrations of interconnected businesses, suppliers, institutions, and supporting services within a specific sector. They generate economies of scale, attract investment, spur innovation, and create higher-value jobs. International examples demonstrate how deliberate coordination, robust institutional frameworks, and policy alignment can build globally competitive clusters. In these countries coordination is facilitated by dedicated institutions with clear mandates to bring together stakeholders, monitor implementation, resolve bottlenecks, and drive cluster competitiveness. Moreover, public-private-academic collaboration ensures that education and training match industry needs and that innovation is commercialised effectively.
In Malaysia, Penang faced economic decline in the 1970s after losing its entrepôt trade status. Under a New Economic Policy, the government established Free Trade Zones, invested in infrastructure, and created the Penang Development Corporation, which functioned as an Economic Development Board. This institution coordinated industrial planning, investment promotion, land allocation, and SME development. Consequently, multinationals such as Intel, AMD, and Motorola were attracted to the region, seeding local supplier development and vocational training programmes aligned with industry needs. Universities like Universiti Sains Malaysia were integrated into the cluster, providing research expertise and skilled graduates to reinforce Penang’s competitive electronics ecosystem. Today, Penang is known as the “Silicon Valley of the East,” contributing significantly to Malaysia’s exports and technological upgrading.
The Netherlands is the world’s second-largest agricultural exporter through a strong cluster-based approach that integrated farmers, research institutions, logistics firms, and government agencies. Wageningen University worked closely with producers to drive innovation in greenhouse technologies, precision farming, and food processing, while the Dutch Top Sector policy framework, akin to an economic development board, aligned ministries, research institutions, and private sector partners around key clusters such as agri-food.
Costa Rica in the early 2000s strategically targeted medical device manufacturing as a pillar of its diversification strategy. CINDE, the Costa Rican Investment Promotion Agency, coordinated investor attraction, workforce development, and policy advocacy. Free trade zones were established with streamlined regulations, and universities tailored programmes to meet the skill requirements of the industry. Public-private collaboration ensured continuous improvements in infrastructure, standards, and export facilitation. Today, Costa Rica is the second-largest exporter of medical devices in Latin America, generating high-value jobs and building national technological capability.
For Trinidad and Tobago, adopting a cohesive clustering strategy can unlock its potential across multiple sectors. The country’s agri-food sector, for instance, can be transformed by integrating farmers, agro-processors, packaging firms, logistics providers, research institutions such as The UWI Faculty of Food and Agriculture, and export promotion agencies to build a resilient food industry, reduce import dependence, and develop branded superfoods and value-added products for export.
Creative and digital clusters can connect designers, software developers, animators, and global platforms to export Caribbean creativity. Marine and maritime clusters can combine ship repair, yachting services, marine training, and offshore logistics to strengthen the blue economy.
Tourism, which remains fragmented, requires a shift towards cluster development that integrates all stakeholders. For example, eco-cultural tourism clusters could link community tourism initiatives with eco-lodges, cultural heritage sites, culinary experiences, and festivals to create authentic, high-value experiences. In urban centres like Port of Spain, business tourism clusters combining hotels, conference centres, ICT services, creative industries, and entertainment could build a robust meetings, incentives, conferences, and exhibitions (MICE) sector. Clustering is a hands-on development model which cannot be designed in ivory towers divorced from the direct participants.
Moving beyond silos will require the establishment of a national economic or cluster development agency with the authority to coordinate policy, bring together and manage cluster stakeholders, attract investment, and facilitate public-private-academic collaboration to align skills development, research, and market needs with cluster-specific incentives and infrastructure to address persistent bottlenecks such as export facilitation, certification, digital connectivity, and logistics.
Moreover, clear political commitment, and a mindset shift from fragmented projects to systemic industrial ecosystems, is needed. The result can be a diversified economy that is more innovative, export-competitive economy, capable of providing sustainable livelihoods for citizens beyond the fluctuating fortunes of oil and gas.
—Author Indera Sagewan
is an economist
