Gem jamaica 2009 report

GLOBAL ENTREPRENEURSHIP MONITOR 2009 JAMAICA REPORT

Vanetta Skeete Mauvalyn Bowen Girjanauth Boodraj Joan Lawla Marcia McPherson-Edwards Horace Williams

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DISCLAIMER The authors have attempted to ensure the accuracy and completeness of the information contained in this publication, however, no responsibility can be accepted for any errors and inaccuracies that occur. Whilst this work is based on data collected by the GEM consortium, responsibility for analysis and interpretation of those data is the sole responsibility of the authors.

Š 2010 by Vanetta Skeete, Mauvalyn Bowen, Girjanauth Boodraj, Joan Lawla, Marcia McPherson-Edwards, Horace Williams and University of Technology, Jamaica.

ISBN 978-976-8027-33-7

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EXECUTIVE SUMMARY Main Characteristics of Entrepreneurial Activity

respondents in the APS believed that they possessed the knowledge and skills to start a business.

The Global Entrepreneurship Monitor (GEM) is a multinational research project designed to provide annual assessments of the entrepreneurial sector in a range of countries. Fifty four countries participated in the project in 2009. The global data revealed that entrepreneurial activity declined in most of the Gem countries in 2009, but for a minority of the countries studied, including Jamaica, entrepreneurial activity increased. Total entrepreneurial activity in Jamaica for the year 2009 was recorded at 23.6%, a 7.6% increase over last yearâ€&#x;s figure. Of this figure, 13% fell in the nascent category, while the other 10.6% was attributed to new business owners. Male entrepreneurs accounted for 57% of all startups while females accounted for the other 43%. Entrepreneurs in the established business category were 13.4% comparing favorably with the 9.1% in 2008.

Entrepreneurial Motivation Jamaicans continue to seek out entrepreneurial possibilities for selfemployment purposes or to supplement their salaries and wages. As much as 46% of participants in the 2009 National Expert Survey (NES) believe that there are many good opportunities for the creation of new firms while a smaller number (37%) believe that this is not so. The Adult Population Survey (APS) revealed that 66% of new entrepreneurs in 2009 were motivated by opportunity while the other 34% was through necessity. The survey showed that Jamaicans have a positive appetite for new goods and services and will therefore accommodate innovative and creative ventures.

Entrepreneurial Capacity The Adult Population Survey captures data from individuals between the ages of 18 and 64 years. Survey results revealed that earlystage entrepreneurial activity in Jamaica is most prevalent in the 25 to 34 age group which is consistent with most GEM countries. In all participating countries men are more likely to start a business than women and the Jamaican results were also consistent in this regard. The majority of respondents (53%) had been educated up to the secondary level, most of whom (30%) were self employed. Seventy-six percent of

The impact of the world recession on Jamaica has been significant. The economy declined in 2009 with growth in GDP moving downward from a negative 0.9% in 2008 to a negative 2.7% in 2009. There was an overall decline in exports, with major cut-backs in bauxite and alumina production due to decreased demand in the US. At the same time imports declined thus providing the opportunity for more Jamaican entrepreneurs to create goods and services for the local and export markets. The Jamaican dollar depreciated by 10.2 % in nominal terms over 2008 but some degree of

Entrepreneurial Activity and the Economy

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stability was noted in the latter part of year 2009. Remittance inflows, which are sometimes used as an informal source of start-up funding, decreased by 11.3% over 2008.

The inflation rate for the year stood at 10.2% and although considerably less than the previous yearâ€&#x;s figure of 16.8%, consumer purchasing power was significantly eroded. Purchasing power was also impacted by the current wage freeze for public sector workers and a fair amount of redundancies in the private sector. This weakened demand for goods and services will no doubt have a negative impact on entrepreneurship, but the GEM data indicates that Jamaicans are as resilient as ever, finding creative ways to capitalize on the existing entrepreneurial opportunities.

Persistently high interest rates in the commercial banking sector (an overall average weighted loan rate of 16.19% at December 2009) continue to inhibit entrepreneurship. However, there are positive indications that bank interest rates will continue to trend downwards, with 2009 recording the lowest interest rate average over five years, thus increasing the affordability of debt capital to entrepreneurs.

Tourism, Jamaicaâ€&#x;s main foreign exchange earner is very sensitive to environmental conditions, and with the United States being our main tourist market, the effects of the economic downturn impacted the sector.

Although the number of stop-over visitors to the island increased, cruise ship passenger arrivals decreased, with the sector recording an overall 3.7 decline in visitor arrivals when compared with 2008. A decline in visitor arrivals has implications for entrepreneurial activities linked to the sector such as transportation, entertainment, craft and agriculture. The scaling down of banana and sugar production negatively

impacted micro and small entrepreneurs in agro-processing and other related industries.

There have been large-scale job cuts in the hotel, bauxite, airline, and other industries and redundancies are expected to take place in the public sector. It is expected that the current situation will be exacerbated by the pending stand-by loan arrangement with the International Monetary Fund (IMF). It is therefore anticipated that more persons will be turning to entrepreneurship as a means of employment, will be actively seeking opportunities, as well as the relevant assistance to start businesses.

Outlook for Entrepreneurship Despite the economic setbacks, Jamaicans continue to start new businesses, whether out of necessity or from perceived opportunities. However, the sustainability of these endeavours remains uncertain as entrepreneurs try to cope with the prevailing macroeconomic conditions. The GEM data has shown that the business discontinuation rate in 2009 of 10.7% was greater than the 8.9% recorded in 2008. Additionally, the majority of respondents (82%) in the Adult Population Survey (APS) were of the view that it was more difficult to start a business now than in the previous year, and 53% felt that growing a business is now more difficult when compared to last year.

Nevertheless, the outlook for entrepreneurship going into 2010 remains positive for the most part, with significant achievements in the launching of the Jamaica Junior Stock Exchange, the forthcoming Credit Bureau Legislation and the pending Jamaica Debt Exchange arrangement with the banking sector.

However, prospective entrepreneurs should be cautious, analytical, and selective in the types of ventures they undertake. iv

TABLE OF CONTENTS EXECUTIVE SUMMARY

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LIST OF TABLES

vi

LIST OF FIGURES

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ACKNOWLEDGEMENT

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INTRODUCTION The GEM Model Research Methodology The 2009 Jamaica Report Key Findings from GEM Jamaica GEM in Action

1 2 3 5 5 6

ENTREPRENEURIAL ACTIVITY IN JAMAICA Measuring Entrepreneurship Entrepreneurship among Country Groups Transition Rates and Business Discontinuation Entrepreneurial Activity across Parishes and Sectors

7 7 9 11 14

ENTREPENEURIAL CAPACITY AND ATTITUDES Age and Entrepreneurship Gender and Entrepreneurship Support for Women in Start-ups Entrepreneurial Attitudes

20 20 21 22 24

SUPPORT FOR ENTREPRENEURSHIP IN JAMAICA Social Entrepreneurship Social Entrepreneurship in Action Financing Entrepreneurship Government Policies Government Programmes Market Openness Entrepreneurship Education and Training Research and Development Transfer and Intellectual Property Rights Commercial, Services and Physical Infrastructure Entrepreneurial Culture

29 30 38 46 56 59 62 68 76 81 84

RECOMMENDATIONS REFERENCES APPENDICES

86 87 92

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LIST OF TABLES Table 1

Key Findings to Date

Table 2

Entrepreneurial Activity in the 54 GEM Countries in 2009

Table 3

TEA by Sector across Parishes

Table 4

Employment Status

Table 5

Entrepreneurial Attitudes and Perceptions in the 54 GEM Countries in 2009

Table 6

Starting a New Business Now, Compared to One Year Ago

Table 7

Social Entrepreneurial Activity by Firm, Entrepreneurial Phase, and Gender

Table 8

Prevalence of SEA Types by Country

Table 9

Sources of Funding (Start-up) Money

Table 10

Availability of Funding for New and Growing Firms

Table 11

Micro Finance Institutions in the Caribbean

Table 12

Entrepreneurial Framework Conditions Valued most Positive and most Negative per Country

Table 13

Responses of Experts: R& D Transfers

Table 14

Global Competiveness Indicator: Technology Readiness

Table 15

National Expert Survey: Intellectual Property Rights

Table 16

Commercial and Services Infrastructure

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LIST OF FIGURES Figure 1

Country Groupings

Figure 2

The GEM Model

Figure 3

The Entrepreneurial Process and GEM Operational Definitions

Figure 4

Early-Stage Entrepreneurship

Figure 5

Transition Rates: Jamaican Entrepreneurs

Figure 6

Most Important Reasons for Quitting Business

Figure 7

Expressed Reasons behind Discontinuing Business by Country Group

Figure 8

Total Entrepreneurial Activity by Parish

Figure 9

Sectoral Categories

Figure 10

TEA by Sector Globally

Figure 11

TEA by Sector in Jamaica

Figure 12

Early Stage Entrepreneurial Activity for Separate Age Groups, 2009

Figure 13

Entrepreneurship by Age

Figure 14

Entrepreneurship by Gender

Figure 15

Starting a New Business is a Socially Accepted Career Option for Women

Figure 16

Motive for Entrepreneurship

Figure 17

Starting a Business is Considered a Good Career Choice

Figure 18

Many Good Opportunities to Start a Firm

Figure 19

Prevalence of Early Stage Social Entrepreneurial Activity by Country

Figure 20

Social, Environmental and Community Problems

Figure 21

Partnering with Communities

Figure 22

Government and Potential Entrepreneurs in Community Projects

Figure 23

Investing in Socially Responsible Activities

Figure 24

Social Responsibility as Competitive Advantage viii

Figure 25

Expectations of Society

Figure 26

AIRâ€&#x;s Community Framework

Figure 27

Informal Investors Prevalence Rates for 54 Nations

Figure 28

Informal Capital as a Percentage of GDP per Capita

Figure 29

Availability of Venture Capital

Figure 30

Percentage Distribution of Business Angels in the 2006 Sample

Figure 31

Funding from Private Individuals

Figure 32

Availability of Debt Funding

Figure 33

Sufficiency of Government Subsidies

Figure 34

Government Policies Favor New Firms

Figure 35

The Amount of Taxes is not a Burden for New and Growing Firms

Figure 36

Coping with Government Bureaucracy

Figure 37

Government Assistance for New and Growing Firms

Figure 38

Support from Government Programmes

Figure 39

Science Parks and Business Incubators

Figure 40

Changes in Consumer Goods Market

Figure 41

Markets for Business to Business Goods and Services

Figure 42

Early-Stage Entrepreneurs with International Orientation

Figure 43

New and Growing Firms Entering New Markets

Figure 44

Affording the Cost of Market Entry

Figure 45

Competitive Interference in Market Entry

Figure 46

Anti-Trust Legislation

Figure 47

Vocational, Professional and Continuing Education Systems

Figure 48

Level of Business and Management Education

Figure 49

Primary and Secondary Education

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Figure 50

Education by Group between 18-64 years

Figure 51

Highest Level of Education

Figure 52

Knowledge and Skills to Start a Business

Figure 53

Application and Granting of Patents in Jamaica

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ACKNOWLEDGEMENT The GEM Jamaica Team would like to acknowledge the contribution and participation of: 

Cashmere International Limited, the consulting firm that conducted the Adult Population Survey



Our major sponsor, the College of Business and Management, University of Technology, Jamaica



Our additional sponsor, the School of Graduate Studies, Research and Entrepreneurship, University of Technology, Jamaica



The thirty-six experts who participated in the National Experts Survey



All households who participated in the Adult population Survey



Lecturers of the College of Business and Management who conducted the expert interviews



Dr. Kadamawe Kn‟ife for his contribution on the YCWJ-OSE



Patrice Farquharson (Administrative Support) for her continued assistance to the GEM project

We are indeed grateful for your assistance in making the GEM 2009 Report a reality.

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INTRODUCTION The Global Entrepreneurship Monitor (GEM) Research Consortium, co-founded by Babson College in the United States and the London Business School is now in its 13th year of existence.

GEM collects data in its participating member countries on an annual basis, harmonizes the data and reports on entrepreneurial activities across countries through a global annual report. Each participating country in turn, produces a national report that focuses on entrepreneurial activity within each country. GEM has three primary objectives: 

To measure differences in the level of entrepreneurial activity among countries



To uncover factors determining national levels of entrepreneurial activity



To identify policies that may enhance the national level of entrepreneurial activity

Jamaica, through the University of Technology, Jamaica, has been a member of the GEM Consortium since 2005, and has so far produced four national reports. To date, Jamaica is the only Caribbean country that has participated in the GEM. Fifty-four countries participated in GEM 2009 and for presentation purposes, and based on the World Economic Forum‟s Global Competitiveness Report 2009-2010, the countries were categorized into three stages of economic development: factor driven, efficiency driven and innovation driven (Figure 1).

Figure 1 Country Groupings

Factor-Driven Economies Algeria, Guatemala, Jamaica, Lebanon, Morocco, Saudi Arabia, Syria, Kingdom of Tonga, Uganda, Venezuela, West Bank and Gaza Strip, Yemen

Efficiency-Driven Economies Argentina, Bosnia and Herzegovina, Brazil, Chile, China, Colombia, Croatia, Dominican Republic, Ecuador, Hungary, Iran, Jordan, Latvia, Malaysia, Panama, Peru, Romania, Russia, Serbia, South Africa, Tunisia, Uruguay

Innovation-Driven Economies Belgium, Denmark, Finland, France, Germany, Greece, Hong Kong, Iceland, Israel, Italy, Japan, Republic of Korea, Netherlands, Norway, Slovenia, Spain, Switzerland, United Kingdom, United Arab Emirates, United States

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There is much variation in the levels of development of the countries listed in these three categories: factor-driven economies are primarily extractive in nature; in efficiency driven economies scale-intensity is a major driver of development; and in innovation-driven economies new product development and sophisticated production processes are the bases of competition (GEM 2008). In 2009 Jamaica was categorized as a factor-driven economy (Figure 1).

For factor-driven economies countries compete based on their factor endowments, primarily unskilled labour and natural resources. Companies compete on the basis of price and sell basic products or commodities, with their low productivity reflected in low wages. Maintaining competitiveness at this stage of development hinges primarily on well-functioning public and private institutions, well-developed infrastructure, a stable macroeconomic framework, and a healthy and literate workforce (Global Competitive Report, 2009-2010).

GEM recognizes that all three principal types of economic activity (factor-driven, efficiency driven and innovation-driven) are present in all national economies, but their contribution to economic development varies. Each phase of economic development has a different optimum combination of the three activities. For factor-driven economies, emphasis is placed on basic requirements. The basic requirements will help sustain necessity entrepreneurship but may do little to enable opportunity-based entrepreneurship. As economies progress and scale economies become more and more relevant, other conditions that ensure a proper functioning of the market and are called efficiency enhancers, become important. For countries whose economic development is primarily innovation-driven, Economic Framework Conditions become more important as levers of economic development than basic requirements or efficiency enhancers (GEM 2008).

The GEM Model GEM is of the view that the contribution of entrepreneurship to an economy varies according to its stage of development and that a range of environmental conditions affect or influence entrepreneurial development in a country. Entrepreneurial Framework Conditions (EFCs) form the basis of an environment that enables entrepreneurship. According to GEM (2009), EFCs reflect major features of a countryâ€&#x;s socio-economic milieu that are expected to have a significant impact on the entrepreneurial sector. The GEM model (Figure 2) incorporates nine EFCs that provide the basis for an ideal entrepreneurial environment. These are: Financing, Government Policies, Government Programmes, Education, Research and Development (R&D) Transfer, Commercial and Legal Infrastructure, Market Openness, Physical Infrastructure, and Cultural and Social Norms. The GEM EFCs coupled with other factors in the external environment provide an enabling environment for the formation of new businesses and their transition into established businesses and firm growth.

Entrepreneurial Attitudes, Activity and Aspirations are also contributory factors to entrepreneurial development. Individualsâ€&#x; attitude toward risk and perception of their own knowledge and skill, for example, can influence entrepreneurial activity positively or negatively.

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Entrepreneurial activity, as defined by GEM, is the extent to which people in a population are creating new business activity, both in absolute terms and relative to other economic activities, such as business closure (GEM 2009). Entrepreneurial aspirations influence the level of entrepreneurial activity within a country. Aspirations reflect the qualitative nature of entrepreneurial activity (GEM 2009), and activities such as new product development, market development, and business growth and expansion are reflective of aspirations. The creation of new businesses and established businesses result in economic growth through job creation and technical innovation (Figure 2).

Figure 2 – The GEM Model

Basic Requirements From Other Available Sources

Social, Cultural, Political Context

Institutions Infrastructure Macroeconomic Stability Health and Primary Education

Efficiency Enhancers

- Higher education and Training - Goods Market Efficiency - Labor Market Efficiency - Financial Market Sophistication - Technological Readiness - Market Size Innovation and Entrepreneurship

From GEM National Expert Surveys

- Entrepreneurial Finance - Government Policies - Government Entrepreneurship Programs - Entrepreneurship Education - R&D Transfer - Commercial, Legal Infrastructure for Entrepreneurship - Internal Market Openness - Physical Infrastructure for Entrepreneurship - Cultural, Social Norms

Established Firms (Primary Economy)

New Branches, Firm Growth

Entrepreneurship Attitudes: Perceived Opportunities Perceived Capacity

National Economic Growth

Activity: Early-Stage Persistence Exits

(Jobs and Technical Innovation)

Aspirations: Growth Innovation Social Value Creation From GEM Adult Population Surveys (APS)

Source: 2009 GEM Global Report

Research Methodology GEM views entrepreneurship as a complex phenomenon that spans a variety of contexts. GEM takes a broad view of entrepreneurship and focuses on the role played by individuals in the entrepreneurial process. Entrepreneurship, as defined by GEM is “any attempt at new business or new venture creation, such as self employment, a new business organization, or the expansion of an existing business, by an individual, teams of individuals, or established business.” (GEM Procedures Manual, 2006). Within this context, the GEM data collection covers the life cycle of the entrepreneurial process and looks at individuals from the point at which they commit resources to start a business to the point where they own and operate an established business (Figure 3).

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The GEM objectives and the methodology used by the GEM research are explored within the context of the conceptual model (Figure 2). Data for the research are collected using three methodological strategies: the adult population survey, the expert interview and the expert questionnaire. The GEM Model (Figure 2) forms the basis of the national survey, the structured questionnaire and the unstructured interview with experts.

The Adult Population Survey (APS) A locally contracted consultant, Cashmere International Limited, conducted an island-wide household study to examine the prevalence rate of entrepreneurial activity and other critical issues influencing entrepreneurship. GEM examines entrepreneurial activities among individuals in a population aged 18 to 64 years old. The Statistical Institute of Jamaica (STATIN) was instrumental in the design of the household sample of 2,500 to ensure proportional distribution within Jamaicaâ€&#x;s fourteen parishes. The interviews were completed during the months of July and August, 2009. The usable responses totaled 2,012 and form the basis of the research.

Within the core questions that GEM uses to guide its research process is a set of underlying issues that the APS seeks to capture: 1. Whether individualsâ€&#x; pursuit of entrepreneurship is because of motivation or necessity 2. The demographic profile (age, gender, education) of those who pursue entrepreneurial activity 3. The type of businesses being pursued 4. Factors that facilitate an understanding of differences in entrepreneurial activity between Jamaica and other participating countries and those within Jamaica itself 5. The impact of public policy and the role that government can play in enhancing entrepreneurship

The Key Informant/Expert Interview The participants in the National Expert Survey (NES) were selected from experts in the commercial and other sectors based on their knowledge, reputation and experience with a number of the framework conditions (EFCs). The 2009 sample size was 36, comprised of 50% males and 50% females, at least 25% of whom are entrepreneurs. Faculty members from the University of Technology, Jamaica, conducted the interviews either by telephone or face to face during the months of May and June in 2009. In the interview, key informants/experts were asked three critical questions: 1.

2.

3.

What are the factors that constrain entrepreneurial activity in the country?

What are the most significant factors that foster entrepreneurship in the country?

Can you make recommendations about what can be done to improve entrepreneurship in the country?

The Key Informant/Expert Questionnaire Key Informant (KI) questionnaires were sent to experts ahead of the scheduled interviews. The instrument comprised of fixed standardized (Likert-type) evaluations on each of the nine entrepreneurial framework conditions and the opportunity, capacity and motivation associated 4

with the national entrepreneurial sector. Completion of the instrument ranged from 15 to 20 minutes.

The 2009 Jamaica Report There are two major sections in the report, the first of which reports information on entrepreneurial activity, capacity and attitudes, and the regions in Jamaica. Year to year comparisons are made, and differences between Jamaica and other countries participating in GEM are examined. The Adult Population Survey (APS) is the main data source for the first section. The second section focuses on entrepreneurship in Jamaica taking into consideration the nine GEM Entrepreneurial Framework Conditions. Findings in this section were derived mainly from the data provided through the National Experts Survey (NES). The GEM special topic for 2009 is Social Entrepreneurship and three organizations that are involved in social entrepreneurship in Jamaica are featured.

Key Findings from GEM Jamaica Table 1 Key Findings to Date 2005

2006

2008

2009

%

%

%

%

17

20.3

16

23.6

*Nascent Entrepreneurs *New Business Owners

10.5 6.7

11.4 8.9

9 7

13 10.6

*Established Businesses Owners

9.5

10.5

9.1

16.3

Business Discontinuation Rates

13.3

5.6

8.9

10.7

**Male Entrepreneurs **Female Entrepreneurs

55 45

50 50

54 46

57 43

**Opportunity Entrepreneurship **Necessity Entrepreneurship **Other Motive

57 38 5

64 33 3

48 51 1

66 34 -

INDICATORS *Total Entrepreneurial Activity (TEA)

NB: Jamaica did not participate in GEM in 2007 *Percentage of Population **Percentage of Early Stage Entrepreneurs

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Gem in Action GEM is recognized as one of the worldâ€&#x;s leading research consortia and focuses on the understanding of the relationship between entrepreneurship and national development. The use of GEM data locally by researchers and other interested parties is moderate, but as awareness of the publication increases so has its use, as evidenced by the number of citations and references to the data in many public forums and in speeches. One objective of GEM Jamaica is to inform policy decisions and some of the recommendations made in the GEM publications over the years have been implemented. GEM Jamaica is proud to be a member of the GEM Research Consortia, making its contribution to entrepreneurship globally and locally.

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ENTREPRENEURIAL ACTIVITY IN JAMAICA Amidst predictions of a negative impact of the world economic crisis on the Jamaican economy, entrepreneurial activity in the country for the year 2009, was positive. The TEA (Total Entrepreneurial Activity) prevalence rate for the year was 23.6%, reflecting an increase of 7.6% over 2008. Entrepreneurship has been recognised as a key factor in a country‟s economic development, and Jamaica‟s National Development Plan, Vision 2030 Jamaica (Planning Institute of Jamaica, (PIOJ) 2009), reflects this view. The plan has various objectives for entrepreneurship some of which are: to improve opportunities for micro, small and mediumsized enterprises (MSMEs); to increase training and credit facilities for MSMEs; and to encourage the formalization of informal enterprises and individuals. Entrepreneurship is therefore viewed as a catalyst in Jamaica‟s economic development over time. It is of great importance that the framework conditions for the achievement of these objectives be instituted in order for the country to fulfill its socio-economic development objectives. The relationship between entrepreneurship and economic development is a symbiotic one, economic development impacting entrepreneurship while on the other hand, entrepreneurship impacts economic development.

Measuring Entrepreneurship Entrepreneurial activity may be measured in different ways with methods of measurement varying across countries. Two widely used measures are the increase in the number of start-ups, and new firm registration. These methods, however, do not adequately capture businesses that have been discontinued within a limited time period. Also, business registration data do not capture start-ups in the informal sector, a significant component of the Jamaican entrepreneurial landscape. GEM measures entrepreneurial activity across countries by focusing on the roles played by individuals in the entrepreneurial process. Entrepreneurial activity is measured by identifying individuals who are at different stages of the process of creating and sustaining a business; from the business‟ conception through to its birth and through its persistent stages into the growth of an established business (Figure 3). GEM also identifies individuals who have discontinued a business in the last 12 months - individuals who may re-enter the entrepreneurial process. Those individuals who are actively committing the resources to start a business and have not paid wages for more than three months are categorized as nascent entrepreneurs.

Individuals who own and manage a new business that has paid salaries for more than three months but less than 42 months are regarded as new business owner-managers. Established businesses are those owned and managed by persons who have operated a business for more than 42 months. Nascent entrepreneurs and new businesses combined are termed early-stage entrepreneurship, representative of businesses that have been in operation for less than 42 months (Figure 3).

The measure of entrepreneurship used by GEM is known as the TEA (Total Entrepreneurial Activity) which is the prevalence rate of early-stage entrepreneurial activity. Growth in entrepreneurial activity is measured by an increase in the TEA. Jamaica‟s TEA for 2009 7

(23.6%) signifies that 23.6% of the adult population were engaged in entrepreneurial activities (started business over the past 42 months or 31/2 years).

Figure 3 The Entrepreneurial Process and GEM Operational Definitions

Source: GEM 2009 Global Report

Of the 23.6% TEA, 13% fell in the nascent category while the other 10.6% was attributed to the new-business category (Table 1). This means that 13% of the population was engaged in business start-ups that were in operation for three months or less, while 10.6% of Figure 4 the population were involved in start-ups Early-Stage Entrepreneurship that were between 3 months to 3.5 years old. In real percentage terms, of the total businesses that are under 3.5 years old, 57% are nascent entrepreneurs while the Nascent 43% other 43% are new-businesses (Figure 4).

Entrepreneur 57%

New-business When compared with 2008, year 2009 Owner reflects a more positive outlook for entrepreneurship in Jamaica. The 7.6% increase in TEA over 2008 is indicative of the entrepreneurial spirit that is characteristic of many Jamaicans.

Despite the harsh economic conditions individuals are actively seeking out and capitalizing on business opportunities for self enhancement and economic development.

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Entrepreneurship among Country Groups Countries participating in GEM are categorized according to their phase of economic development, as outlined in the Global Competitiveness Report 2009-2010 (World Economic Forum, 2010). The classification is based on the countriesâ€&#x; GDP per capita which is used to determine whether economies are factor-driven, efficiency-driven or innovation-driven (Figure 1). GEM explains the developmental characteristics of each phase as follows: For factor-driven economies, getting the basic requirements right is key to the generation of sustainable businesses that can contribute not just to local economic activity but to health and education of the next generation. For efficiency-driven economies, the nurturing of economies of scale attracts more growth and technology-oriented entrepreneurs, creating more employment opportunities. For innovation-driven countries the focus lies more on dynamics, and stimulating new combinations of products and markets (Bosma & Levie, 2010). The phase of development impacts the level and type of entrepreneurial activity in the country as well as the motivation for entrepreneurship.

The impact of entrepreneurship on development is likely to differ in each phase of development in terms of time lag and size (Bosma & Levie, 2010).

Jamaica continues to rank highly in total entrepreneurial activity. Among the factor-driven economies, Jamaicaâ€&#x;s TEA of 23.6% gives it a fourth place ranking behind Uganda (34%), Guatemala (27%), and West Bank and Gaza Strip (24%) (Table 2). Of the efficiency-driven and innovation-driven economies, the most highly ranked country is Columbia (22 %) followed by Peru (21%). Therefore, for 2009, Jamaica is regarded as the fourth most entrepreneurial country worldwide. Within the context of Schwabâ€&#x;s 2009 classification, this implies that the economy is functioning on basic requirements and lacks the efficiency enhancers and market development characteristics that facilitate economic development. Highly developed countries such as Japan, Belgium and Denmark have the lowest TEA among GEM countries, (3.3%), (3.5%) and (3.6%) respectively (Table 2). On the other hand, a high TEA rate may imply that despite adverse economic conditions, the people in a country have used their creativity and innovation to develop entrepreneurial ventures that are used as means of job creation and self sustainability.

The economic crisis and its possible impact, as well as prevailing economic conditions such as high inflation rates and a depreciating Jamaican dollar have pushed individuals to seek entrepreneurial opportunities. Redundancy in the private sector has been moderate and although there have been no job cuts in the public sector, significant job losses are predicted under the pending agreement with the International Monetary Fund (IMF).

There has also been a freeze on public sector wages since 2007. With this adverse socioeconomic outlook, it is not surprising that individuals have looked to entrepreneurship as a possible solution to their current or pending unemployment situation or as a means of providing additional income to stymie their decreasing purchasing power.

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Table 2 —Entrepreneurial Activity in the 54 GEM Countries in 2009, by Phase of Economic Development Nascent entrepren eur-ship rate

New business ownership rate

Early-stage entrepren eurial activity (TEA)

Establishe d business ownership rate

Discontinu ation of businesses

Necessitydriven (% of TEA)

Improvementdriven opportunity (% of TEA)

Factor-driven economies Algeria Guatemala Jamaica Lebanon Morocco Saudi Arabia Syria Tonga Uganda Venezuela West Bank & Gaza Strip Yemen average (unweighted)

11.3 17.1 13.0 6.7 6.9 2.9 3.4 6.5 12.4 13.3 3.0 22.8 9.9

5.6 12.2 10.6 8.8 9.4 1.9 5.1 11.1 22.7 5.4 5.9 1.2 8.3

16.7 26.8 22.7 15.0 15.8 4.7 8.5 17.4 33.6 18.7 8.6 24.0 17.7

4.7 3.3 16.3 16.0 15.2 4.1 6.7 2.3 21.9 6.5 6.9 2.9 8.9

7.9 6.0 10.7 4.6 3.7 2.9 7.4 3.6 24.2 3.0 7.1 2.0 6.9

18 23 33 18 25 12 37 33 45 32 37 35 29.0

51 30 45 60 57 63 43 39 45 42 33 16 43.6

Efficiency-driven economies Argentina Bosnia and Herzegovina Brazil Chile China Colombia Croatia Dominican Republic Ecuador Hungary Iran Jordan Latvia Malaysia Panama Peru Romania Russia Serbia South Africa Tunisia Uruguay average (unweighted)

6.1 3.1 5.8 9.6 7.4 15.0 3.5 8.8 6.3 5.4 8.2 5.9 5.3 1.7 6.2 16.1 2.8 1.8 2.2 3.6 2.2 8.1 6.1

9.3 1.3 9.8 5.6 11.8 8.0 2.2 9.2 9.7 3.7 4.1 4.9 5.4 2.7 3.5 5.1 2.3 2.3 2.8 2.5 7.2 4.2 5.3

14.7 4.4 15.3 14.9 18.8 22.4 5.6 17.5 15.8 9.1 12.0 10.2 10.5 4.4 9.6 20.9 5.0 3.9 4.9 5.9 9.4 12.2 11.2

13.5 3.9 11.8 6.7 17.2 12.6 4.8 11.4 16.1 6.7 6.5 5.3 9.0 4.3 4.2 7.5 3.4 2.3 10.1 1.4 10.2 5.9 7.9

6.2 3.1 4.0 6.4 6.6 7.1 3.9 12.9 6.0 3.2 6.0 6.8 3.3 2.7 1.4 7.1 3.6 2.2 1.9 4.2 4.8 4.9 4.9

47 39 39 25 48 34 37 34 32 24 35 28 32 25 24 28 34 29 41 33 20 22 32

37 20 48 42 29 45 39 26 43 45 35 35 54 44 59 42 31 37 46 38 57 57 41

2.0 1.6 2.9 3.1 2.2 4.5 1.6 7.6 3.4 1.8 1.9 2.7 3.1 5.0 3.2 2.3 4.3 2.7

1.6 2.0 2.3 1.4 2.1 4.7 2.2 4.2 2.7 1.9 1.3 4.4 4.1 3.9 2.1 2.8 3.5 3.2

3.5 3.6 5.2 4.3 4.1 8.8 3.6 11.4 6.1 3.7 3.3 7.0 7.2 8.5 5.4 5.1 7.7 5.7

2.5 4.7 8.5 3.2 5.1 15.1 2.9 8.9 4.3 5.8 7.8 11.8 8.1 8.3 5.6 6.4 8.4 6.1

1.3 1.1 2.1 1.9 1.8 2.6 1.5 4.0 4.0 1.1 1.4 3.9 2.5 3.7 1.3 2.0 2.1 2.1

9 7 19 14 31 26 19 10 25 14 30 45 10 9 10 16 7 16

55 56 62 67 43 47 49 58 48 57 62 37 57 74 69 41 67 43

Innovation-driven economies Belgium Denmark Finland France Germany Greece Hong Kong Iceland Israel Italy Japan Korea Netherlands Norway Slovenia Spain Switzerland UK

10

United Arab Emirates United States average (unweighted)

6.5 4.9 3.4

7.4 3.2 3.1

13.3 8.0 6.3

5.7 5.9 6.8

6.5 3.4 2.5

9 23 17

79 55 56

GEM 2009 APS.

Transition Rates and Business Discontinuation For entrepreneurship to have a positive effect on economic development, the survival and growth of new businesses is paramount. To provide solutions to the unemployment problem, policy makers have focused resources primarily on start-ups. However, greater emphasis needs to be placed on business growth and reducing business discontinuation. In effect, it is the businesses that survive and transit into established businesses that create and sustain employment and maintain the economic momentum.

Business Transition The rate at which new businesses convert into established ones is referred to as the transition rate. The prevalence rate for established businesses for 2009 was 16.3%, a marked improvement over 2008 which registered only 9.1% (Figure 5). This indicates that between 2008 and 2009, 7.2% of „nascentâ€&#x; and „new businesses were transformed into established businesses. It is likely that the ongoing global economic recession which began in 2008 accounted for the higher Figure 5

11

transition rate in 2009 compared to previous years.1 The subsequent numerous job cuts in both the private and public sector signaled an increased attractiveness to owning, and growing “one‟s own business” either for survival or for creating personal opportunities.

Business Discontinuation An analysis of the factors related to the behaviour and performance of failed businesses may enable policy makers, institutions with responsibility for national entrepreneurial development, and potential and new entrepreneurs to be better equipped to deal with the myriad challenges surrounding entrepreneurial sustainability. GEM defines the “business discontinuation rate” as the “Percentage of the 18-64 population who have, in the past 12 months, discontinued a business, either by selling, shutting down, or otherwise discontinuing an owner/management relationship with the business”(Bosma and Levie, 2009, p.61). Hence, business discontinuation rates, in this context, are not synonymous with business failure rates. The business discontinuation rate for Jamaica in 2009 was 10.7% (Table 2). Indeed, 76% of the businesses of respondents who “sold, shut down, discontinued or quit,” did not “continue business activities afterwards”.

An understanding of the reasons for business discontinuation is crucial to entrepreneurship.

Respondents in the GEM Jamaica Adult Population Survey who had discontinued their businesses within the last year were requested to provide the main reasons for discontinuation.

The most important reasons given for Jamaican firms‟ quitting the business were unprofitability (34.3%), personal reasons (24.6%), and problems accessing finance (22.9%). Hence, the majority of firms that exited (57%) cited financial reasons for discontinuing their businesses (Figure 6).

Figure 6

1

It is the opinion of this writer that the collapse of the informal financial schemes during 2008 probably contributed to these higher transition rates. The collapse represented a strong signal that it was no longer possible to “invest and earn easy money”. This claim, however, is subject to empirical research.

12

In fact, for all participating GEM countries in 2009, financial reasons accounted for approximately 53% of all firms that had to discontinue (Figure 7). Financial problems, therefore, represented a greater obstacle for Jamaican firms compared to the average participating GEM country. In 2009, the single most important reason for discontinuation in all 54 participating countries was unprofitability Ë— the same reason cited for Jamaica in 2009, and also for all GEM countries in 2008.

Figure 7 Expressed Reasons behind Discontinuing Businesses by Country Group

Source: GEM 2009 Global Report.

13

Entrepreneurial Activity across Parishes and Sectors The scope of entrepreneurial activity at the parish level is mixed, with some parishes recording much higher activities than others (Figure 8). The parish of St. Catherine recorded the highest TEA (21.2%) in 2009 followed by St. Andrew with 20.7%. A 21.2% prevalence rate means that of the total number of start-ups in the country (100%) in 2009, 21.2% took place in St. Catherine.

Figure 8 Total Entrepreneurial Activity by Parish 2008 & 2009

St. Catherine

18.1 8.3

Clarendon 6.8

Manchester 4.8

St Elizabeth P a Westmoreland r Hanover i St. James s h Trelawny e St. Ann s

21.2

11.7

8.4

6.9 5.9

7.1

2.1 2.3 6

8.3

2.9 3.3

TEA 2009

5.2 6

TEA 2008

5 5

St. Mary 2.2 1.8

Portland

3.5 3.8

St. Thomas St. Andrew

20.7

12 5.4 5.3

Kingston 0

5

10

15

20

25

Percent

Business activity in the municipality of Portmore which is located in St. Catherine, is rapidly expanding and the various housing developments in the parish are gradually attracting new business activity. However, when the twin parishes of Kingston & St. Andrew ( the countryâ€&#x;s capital) are combined, TEA amounts to 26.1% indicating that these two parishes together had the highest number of nascent and new businesses in 2009.

14

Of great concern are the parishes that are reflecting very low TEA - St. Thomas ( 3.5%) Trelawny (2.9%), Portland (2.2%) and Hanover (2.1%) indicating that not much entrepreneurial activity is taking place in these parishes. In fact, when compared with 2008, nine of the fourteen parishes recorded decreases in entrepreneurial activity in 2009. Therefore, although entrepreneurial activity has increased in Jamaica, this increase is centered in Kingston & St. Andrew and St. Catherine. These parishes are the centre of the countryâ€&#x;s commercial activity and most of the organizations that support entrepreneurial activity are located in the capital.

Internal migration to the capital also robs the rural regions of human capital and this coupled with a lesser degree of emphasis being placed on rural development, leaves rural parishes lagging in entrepreneurial development.

Entrepreneurship by Sector To analyse the sectors in which entrepreneurs conduct business, GEM has condensed the multiciplicity of activities in the International Standard Industry Codes into four categories as shown in Figure 9.

Figure 9 Sectoral Categories

Extractive Agriculture, forestry, fishing, and mining (extraction of products from the natural environment)

Transformation Construction, manufacturing, transportation, and wholesale distribution (Physical transformation or relocation of goods and people)

Business Services The primary customer is another business

Consumer Oriented The primary customer is a physical person (e.g., retail, restaurants and bars, lodging, health, education, social services, and recreation)

Figure10 shows the sectoral distribution of activities across GEM countries, based on the type of economy. In all three types of economies (factor-driven, efficiency-driven and innovationdriven), the consumer oriented sector continues to be the most concentrated, and is the most prevalent in the factor-driven economies. The prevalence of businesses in the business services sector is highest in the innovation-driven economies and lowest in the factor-driven economies, a 15

pattern that supports GEMâ€&#x;s assertion that as countries progress in their levels of development, entrepreneurial activity shifts away from consumer-oriented services toward business services.

The extractive sector is most prevalent in the factor-driven economies.

Figure 10 TEA by Sector Globally

GEM APS 2009

The 2009 APS results for Jamaicaâ€&#x;s sectors , were reflective of the global picture. The consumer oriented sector recorded the highest TEA (66%) exceeding the transforming sector by as much as 50% (Figure 11). The TEA in the extractive sector was 13.6% while business services was 5.4%. These figures indicate a significant change between 2005 and 2009. In 2005, TEA for the business services sector spiraled at 77% but has now been replaced by the consumer oriented sector. The consumer oriented sector is comprised of retailers, restaurants, lodgings and personal services among other types of businesses (Figure 9). Very often, persons who are starting businesses start a small shop or sell on the sidewalk. Restaurants are also quite attractive to the nascent and new entrepreneur. These types of businesses generate quick cash which is needed to eke out a minimum standard of living.

The transforming sector, which includes manufacturing and construction, accounted for 15.3% of TEA (Figure 11). The sector has been hit hard by global trends in general, and the economic recession. The construction industry in Jamaica is at an all time low, with significant reductions in building construction. According to the PIOJ (2010), in 2009 the industryâ€&#x;s overall performance was 7.8% contribution to GDP compared to 8.2% in 2008. Real value added growth rate fell from approximately 8% in 2005 to below minus 6% in 2009 (PIOJ, 2010. P.14.1) 16

The extractive sector (Figure 11), which includes agriculture and mining, reports a better performance than in 2005, with a TEA in 2009 of 13.6% compared to the 8% of 2005. Even though mining activities have declined, particularly with the fall-out in the bauxite industry, performance in the agricultural sector has improved with a contribution to GDP of 5.6% in 2009 compared to the 4.8% of 2008 PIOJ (2010) P. 10.1).

Figure 11 TEA by Sector in Jamaica (2005 and 2009)

Entrepreneurship by Sector in the Parishes Table 3 displays total entrepreneurial activity across the parishes in Jamaica based on sectors Extractive, Transforming, Business Services, and Consumer Oriented. In all parishes, the consumer oriented sector carries the greatest concentration of start-up activities, with the parishes of Manchester, Westmoreland, Trelawny and St. Ann recording the highest levels. The vibrancy of the consumer oriented sector in all parishes indicates that most start-ups are focused on end users of the goods and services provided. This concentration in the consumer oriented sector is reflective of the national as well as the global situation. The parishes that rank highly in the extractive sector are most likely more involved in agriculture than the other parishes. For example, St. Elizabeth which has the highest concentration of agricultural activity in the country, has the highest prevalence rate of 36.4%. St. James and Hanover (both 25%) rank the highest in the transforming sector followed closely by Kingston with 24%. While most of the manufacturing activity takes place in Kingston & St. Andrew (41.4% transforming), there are indications that a fair amount of transforming activities are taking place in St. James and Hanover, which may be attributed to construction activity taking place in those parishes in the hotel industry. St. Ann (20.1%) has tourism as well as mining activities.

17

Table 3 TEA by Sector across Parishes SECTORAL DISTRIBUTION PARISHES

Extractive %

Transforming %

Business Services %

Consumer Oriented %

Kingston

4.0

24.0

8.0

64.0

St. Andrew

9.1

17.4

9.9

63.6

St. Thomas

20.8

20.8

12.5

45.8

Portland

27.3

9.1

9.1

54.5

St. Mary

21.1

5.3

5.3

68.4

St. Ann

10.0

20.0

0.0

70.0

Trelawny

12.5

12.5

0.0

75.0

St. James

11.1

25.0

8.3

55.6

Hanover

12.5

25.0

0.0

62.5

Westmoreland

25.0

0.0

0.0

75.0

St. Elizabeth

36.4

0.1

0.0

63.6

Manchester

22.0

2.4

0.0

75.6

Clarendon

20.8

12.5

4.2

62.5

St. Catherine

8.9

16.1

0.0

75

Total

13.6

15.3

5.4

65.7

18

The Business Services Sector in all parishes is weak. The market for services such as information technology-related services may have reached saturation levels over the past three years. Services provided in sectors such as banking, insurance, accounting and legal services are effectively provided as confirmed by nearly 50% of respondents in the NES.

19

ENTREPRENEURIAL CAPACITY AND ATTITUDES Age and Entrepreneurship It has been established that the age distribution of a population has immediate implications for the expected level of entrepreneurial activity of a country - the prevalence rate decreasing as age increases (Bosma et al, 2009; Bosma et al, 2008; Minniti, 2005). Figure 12 shows that globally, the 25-34 age group has the highest prevalence rate in every phase of economic development followed by the 35-44 age group.

Figure 12 Early Stage Entrepreneurial Activity for Separate Age Groups, 2009

Source: GEM Adult Population Survey2009

Jamaica is classified as having a moderately aging population and is expected to enter into a phase of rapid aging over the next three decades. The working population (15-64 years old), comprised 64% of the total population of Jamaica in 2009. Of this amount there were 849,100 males and 880,500 females (PIOJ, 2010). The majority of entrepreneurs fall within the 25-54 age group (Figure 13), and as in the 2008 results, the 25-44 age group continues to be the dominant one with entrepreneurs 25-34 years of age having the edge. The survey showed that the participation of young individuals in the age group 18-24 years in entrepreneurial activities is on the increase. This figure in 2008 was 13% and when compared with the 17.4% in 2009, indicates that programmes such as the Young Entrepreneurs Programme (YEP) and the inclusion of more entrepreneurial programmes at the tertiary education level are showing moderate but positive results.

Although the GEM APS covers individuals between the ages 18 and 64, it should be acknowledged that a number of persons who are 65 years and over operate their own businesses.

Many of these persons upon retirement from their previous employment find it easier to work for themselves employing any skills, knowledge and linkages that they may have in various fields.

20

Figure 13 Entrepreneurship by Age 23.7

25 P e r c e n t e

23.3 19.6

20

17.4

15 10 10

6

5 0

18-24

25-34

35-44

45-54

55-64

Over 65

Age Groups in Years

In this group also, are persons who have been entrepreneurs from the outset and who continue to work beyond the official retirement age until either illness, death or some other circumstance prevents them from doing so.

Gender and Entrepreneurship The Economic and Social Survey Jamaica 2009 (PIOJ, 2010), states that the population of Jamaica is comprised of 49.3% males and 50.7% females. The report further indicates that the proportions for both sexes have remained unchanged since 2004 giving a sex ratio of 97.1 males per 100 females. The GEM 2009 household survey closely approximates this as it indicated that there are 47% males and 53% females comprising the population of the country. The data also revealed that there are more males involved in entrepreneurial activities than females, a trend consistent with all GEM countries in the global sample. Figure 14 indicates that males accounted for 57% and females for 43% of the total entrepreneurial activity in the country in 2009, closely reflecting the 2008 sample of 54% males and 46% Figure 14 females.

Entrepreneurship by Gender There is a marked disparity between the performance of males and females at 43% Male the secondary and higher levels of 57% education in Jamaica, with females Female consistently outperforming their male counterparts. It would be interesting to examine the performance of entrepreneurs on the basis of gender to see if there is any pattern or linkage related to this. It is also more likely that females will avail 21

themselves of training opportunities in entrepreneurship. This is important as the Vision 2030, Jamaicaâ€&#x;s national development plan, suggests that the training system in Jamaica does not sufficiently promote a culture of entrepreneurship. It also stated that it is important for the system to present entrepreneurship as a possible and desirable outcome of training. The unemployment rate is far higher for women than for men despite the fact that a larger percentage of women are better educated than their male counterparts. Table 4 shows that 30.3% of the respondents are self-employed. It is possible that respondents in other categories may also be self-employed.

Table 4 Employment Status Status

Percentage (%)

Currently Employed in full time work

25.6

Currently Employed Part Time

9.5

Currently Employed Self Employed

30.3

Currently Seeking Employment

14.9

Not Currently Employed because of Retirement or Disability

5.4

I am a Student

4.5

Full time Home Maker

7.5

Other

2.2

Don’t Know

.0

Refused

.1

Total

100

Support for Women in Start-ups The GEM data for 2009 shows 42.6% of established businesses being owned by females compared to 57.4 % being male owned. Included in both categories may be businesses owned by both males and females, for example those owned by marital partners. Disaggregation of the data in this regard would perhaps allow for more accurate information to be obtained. Fifty-three percent of the respondents polled by GEM NES for 2009, believed that it is true that women are 22

encouraged to become self-employed or start a new business, while 25% viewed this as being completely false.

According to the Economic and Social Survey Jamaica 2009 (PIOJ, 2010), the proportion of women compared to men in the population is lower in the younger age groups. The sex ratio for the 0-14 age group was 104.9 males per 100 females; in the 15-64 age group which represents the working population, there were 96.4 males per 100 females and in the 65 and over age group the research indicated that there were 79.2 males per 100 females. These figures are important as there is a comparatively high proportion of households in Jamaica that are headed by women.

The women in these households are often responsible for providing for their families and many of them turn to entrepreneurial ventures in order to do so. This is also evidenced by the high proportion of women compared to men who attend workshops and training programmes designed to help existing and prospective micro and small business owners organize their operations. Awareness of the gender differentials ought to be considered when developing entrepreneurship policies and programmes.

Support of women in start-ups is also important as it relates to social entrepreneurship. More women than men seem to be involved in community-based entrepreneurial projects, while more men than women are involved with sports-based community projects. The 2009 NES survey for Jamaica indicates that more social services need to be provided so that women can continue to work even after they start a family. This is very important as the survey shows that 75% of the experts (Figure 15) are of the view that starting a new business is a socially acceptable career option for women in Jamaica.

Figure 15: Starting a New Business is a Socially Acceptable Career Option for Women

The 2009 NES found that 60% of the experts believed that men and women are equally able to start a new business while 6% viewed this as being completely false. This is important as the general economic downturn has resulted in more women who have been displaced from their jobs turning to the micro and small enterprise sector in order to support themselves and their 23

families. These Own Account Workers (sole traders) accounted for approximately 36.8 % of the total employed labour force, averaging 415,050 persons, according to the 2009 Jamaica Labour Force Survey (PIOJ, 2010). This represents an increase of 3.5 per cent compared with that of 2008. Of this amount, females accounted for 45% and more continue to access loans in comparison to their male counterparts.

The GEM 2009 Global Report (Table 2) shows that 33 percent of the early-stage entrepreneurial activity (TEA) in Jamaica is necessity-driven. These are persons who are pursuing entrepreneurship because they believe they have no other choice to make a living. When this is examined against the background of the relatively high number of female-headed households in Jamaica, it underscores the urgency for more policies and programmes to support this category of entrepreneurs at the infancy stage in order to improve the chances of the ventures being successful.

Entrepreneurial Attitudes Individuals‟ attitudes, attributes and motivational factors are essential components that determine their entrepreneurial intentions (Mulira, Dawa & Namatovu, 2009). Attitudes tend to set in motion the individual‟s assessment in relation to the environment. Bosma and Levi (2009) suggested that intrinsic assessments often lead to a proclaimed intention and subsequent action to start a business. They further purported that there is a risk reward return assessment of the individual which will determine if a particular entrepreneurial venture is worth starting. This assessment will then be translated into either positive or negative motivation. Robertson et. al.(2003) concurred that a business will neither start up nor succeed without motivation.

Generally, the possible factors that influence entrepreneurial behavior are the individual, social and environmental factors (Kavitha, Anantharaman & Sharmila, 2008). Gibb (1993) indicated that social factors may involve personal background, stage of career, family background, early life experiences and growth environment.

According to the GEM 2009 Global Report, Entrepreneurial attitudes are important because they express the general feelings of the population toward entrepreneurs and entrepreneurship. The authors further explained that countries need people who can recognize valuable business opportunities, and who perceive they have the required skills to exploit these opportunities.

Additionally, if national attitudes toward entrepreneurship are positive, this will generate cultural support, help, financial resources, and networking benefits to those who are already entrepreneurs or want to start a business. Payne et. al. (1995) supported this claim by indicating that Government‟s support and encouragement of individual‟s entrepreneurial behavior have a positive impact on the country„s economy.

Table 5 displays the entrepreneurial attitudes and perceptions in the 54 GEM Countries in 2009, by phase of economic development (GEM 2009 Global Report). According to the report, Latin American countries and countries in Northern Africa and the Middle East (with Algeria being an exception) have generally favourable attitudes, while Eastern European countries score lower in this regard. From the table it can be seen that the innovation-driven countries show some anomalies which could provide governments with clues as to what they could do to encourage

24

Table 5— Entrepreneurial Attitudes and Perceptions in the 54 GEM Countries in 2009, by Phase of Economic Development, GEM 2009

Perceived Opportunit ies

Perceived capabilitie s

Entrepren eurial intentions **

Fear of failure*

Entrepren eurship as a good career choice

High Status to successful entrepren eurs

Media attention for entrepren eurship

Factor-driven economies Algeria Guatemala Jamaica Lebanon Morocco Saudi Arabia Syria Tonga Uganda Venezuela West Bank & Gaza Strip Yemen

48 57 42 54 53 69 54 56 74 48 50 14

52 64 77 77 78 73 62 53 85 59 56 64

31 24 24 21 24 49 18 65 29 26 36 65

22 18 29 22 27 34 54 6 58 29 24 9

57 77 76 85 82 80 89 91 81 76 88 95

58 69 77 79 86 89 89 52 85 69 78 97

39 68 74 65 74 78 55 80 74 49 52 96

average (unweighted)

52

67

34

28

81

77

67

Efficiency-driven economies Argentina Bosnia and Herzegovina Brazil Chile China Colombia Croatia Dominican Republic Ecuador Hungary Iran Jordan Latvia Malaysia Panama Peru Romania Russia Serbia South Africa Tunisia Uruguay average (unweighted)

44 35 47 52 25 50 37 50 44 3 31 44 18 45 45 61 14 17 29 35 15 46 36

65 57 53 66 35 64 59 78 73 41 58 57 50 34 62 74 27 24 72 35 40 68 54

37 32 31 23 32 29 35 27 35 33 32 39 40 65 26 32 53 52 28 31 34 29 35

14 17 21 35 23 57 8 25 31 13 22 25 10 5 11 32 6 2 22 11 54 21 21

68 73 81 87 66 90 68 92 78 42 56 81 59 59 74 88 58 60 69 64 87 65 71

76 57 80 70 77 74 49 88 73 72 78 84 66 71 67 75 67 63 56 64 94 72 71

80 51 77 47 79 82 53 61 55 32 61 70 51 80 50 85 47 42 56 64 70 62 62

Innovation-driven economies Belgium Denmark Finland France Germany Greece Hong Kong Iceland Israel Italy Japan Korea Netherlands Norway Slovenia Spain Switzerland UK

15 34 40 24 22 26 14 44 29 25 8 13 36 49 29 16 35 24

37 35 35 27 40 58 19 50 38 41 14 53 47 44 52 48 49 47

28 37 26 47 37 45 37 36 37 39 50 23 29 25 30 45 29 32

5 3 4 16 5 15 7 15 14 4 3 11 5 8 10 4 7 4

46 47 45 65 54 66 45 51 61 72 28 65 84 63 56 63 66 48

49 75 88 70 75 68 55 62 73 69 50 65 67 69 78 55 84 73

33 25 68 50 50 32 66 72 50 44 61 53 64 67 57 37 57 44

25

United Arab Emirates

45

68

26

36

70

75

69

United States average (unweighted)

28 28

56 43

27 34

7 9

66 58

75 69

67 53

*

Denominator: 18-64 population perceiving good opportunities to start a business ** Denominator: 18-64 population that is not involved in entrepreneurial activity.

entrepreneurial activity. The GEM 2009 Global report cited Japan as an example where most people agree that a lot of media attention is being given to entrepreneurship, yet starting a business is still not regarded as a good career choice – and perceived opportunities are very low while fear of failure is very high. Whereas in Denmark, the status attached to successful entrepreneurs is high but the media attention is rather low.

Motivation-based Prevalence Rates by Jamaicans in 2009 GEM categorizes motivation as opportunity or necessity based. Opportunity entrepreneurs are those who pursue entrepreneurship because they want to exploit a perceived business opportunity. Necessity entrepreneurs are those who engage in entrepreneurial activities because there are no alternatives for work or the jobs that are available are not satisfactory. In 2009, the Figure 16 Adult Population Survey (APS) indicated that Motive for Entrepreneurship Jamaicans are more driven by opportunity to participate in entrepreneurial activities than by necessity. Figure 16 shows that 66% of Necessity 34% entrepreneurs surveyed stated that their motive to get involved in entrepreneurship was opportunity Opportunity driven while 34% said they had no choice, it was 66% a necessity.

When further asked whether starting a business is considered a good career choice (Figure 17), 78% of the respondents indicated yes and a mere 22% said no. This further indicates that Jamaicans not only consider necessity or opportunity as motivators of entrepreneurial activities but also see entrepreneurship as being a good career choice.

Regarding the ease of starting businesses, Jamaicans in 2009 believed that starting a new business now is more difficult than in previous years. Approximately 61 % of new businessowners and 71% of established business owners were of the view that it is more difficult to start a business now than in the previous year (Table 6).

26

Table 6 Starting a New Business Now, Compared to One Year Ago

New Business Owners

Levels of Difficulty

Established Business Owners

Frequency

Percentage (%)

Frequency

Percentage (%)

More Difficult

254

60.9

222

70.5

Somewhat More Difficult

63

15.1

37

11.7

About the Same

66

15.8

40

12.7

Somewhat Less

12

2.9

4

1.3

Less Difficult

226

5.3

12

3.8

TOTAL

417

100

315

100

Difficult

Prevailing economic conditions have no doubt impacted the ability of individuals to garner the necessary resources to start businesses, but nevertheless, their motivation has not been impeded.

Forty-six percent of respondents in the 2009 National Expert Survey (NES) believed that there are many good opportunities for the creation of new firms in Jamaica (Figure 18).

The government has recognized the need for entrepreneurs to capitalize on opportunities, and has introduced several initiatives to assist entrepreneurship, for example, the Young Entrepreneurs Programme (YEP) and funds to assist displaced workers. Policies and programs have been implemented along with significant budgetary allocations to the sector over the Figure 18 last ten years. This underscores the efforts Many Good Opportunities to Start a New Firm of the Government to create entrepreneurial opportunities (Glasgow et al, 2006). The private sector of Jamaica has also played a pivotal role in the creation of business Yes 46% opportunities. A significant amount of No 37% financial and technical resources have been Undecided 17% channeled toward the development of Micro and Small Enterprises (MSEs), along with other activities including productivity improvement, financial management, 27

development planning and quality control (Planning Institute of Jamaica, 2001).

Necessity-based entrepreneurial activity stands at 34% in 2009. For many years, Jamaica has grappled with a serious unemployment problem and the global recession has helped to compound the problem. However, partnerships with the private sector to create jobs and implement programs that will stimulate self-employment and entrepreneurship is one of the mandates of the Government of Jamaica in moving forward. A number of individuals see entrepreneurship as a means of solving their unemployment situation and as a result become involved in entrepreneurial activities out of necessity.

28

SUPPORT FOR ENTREPRENEURSHIP IN JAMAICA

29

SOCIAL ENTREPRENEURSHIP The GEM Adult Population Survey in 2009, collected data across national teams to explore social entrepreneurial activity, as a special topic. The research focused on the prevalence and nature of entrepreneurship with a social purpose, to include social or community work, for-profit or non-profit, and incorporated or non-incorporated organisations. The prevalence rate of earlystage social entrepreneurial activity (SEA), which is the social equivalent of TEA, was measured across 49 GEM countries within the context of the three types of economies: factor-driven, efficiency-driven and innovation-driven. Findings revealed that the average SEA rate across countries was 1.8% within a range of 0.1 to 4.3%, and increased slightly with the level of economic development (Bosma & Levie, 2010).

There is no generally accepted definition of social entrepreneurship. Martin and Osberg (2007) argue that the definition of social entrepreneurship today is anything but clear and as a result, social entrepreneurship has become so inclusive that it now has an immense tent into which all manner of socially beneficial activities fit. In its 2009 Global Report, GEM posits a broad definition of social entrepreneurship, drawing on authors (Mair and Marti, 2006; Van de Ven, Sapienza and Villanueva, 2007; Zahra, 2008), as “concerning individuals or organizations engaged in entrepreneurial activities with a social goal”. Bornstein & Davis (2010) on the other hand, define social entrepreneurship as a process by which citizens build or transform institutions to advance solutions to social problems, such as poverty, illness, illiteracy, environmental destruction, human rights abuses and corruption, in order to make life better for many.

Prevalence Rate of Early Stage Social Entrepreneurial Activity (SEA) and Early Stage Entrepreneurial Activity (TEA) in Jamaica Jamaica falls within the factor-driven economy grouping with countries such as Guatemala, Lebanon, Algeria and Venezuela (Table 7). Jamaica‟s SEA rate is approximately 3.4% indicating that 3.4% of early-stage businesses are involved in social entrepreneurial activities.

As shown in Table 7, Jamaica has a nascent SEA of 1.2% compared to the global unweighted average of 0.8%. Regarding SEA in new organizations, Jamaica has a 2.3% activity compared to the average unweighted value of 0.6%. Regarding SEA in established organizations, Jamaica has a 0.6% activity compared to the average unweighted 0.2%. Only Uganda at 0.8% ranked higher than Jamaica in this area. In the area of SEA in early stage organizations, Jamaica has a 3.4% level of activity compared to the average unweighted level of 1.4%. Only Venezuela at 3.6% exceeds Jamaica‟s level of activity. The extent to which males are involved in SEA in Jamaica is calculated at 1.8%. The average unweighted level is 0.8%. Only Venezuela at 2.1% exceeds Jamaica for male SEA activity. Female involvement in SEA in Jamaica is 1.6%. The average unweighted level is 0.6%, Jamaica ranking highest in this area. For 2009, Jamaica followed the trend in that men are more likely to become involved in SEA than women.

However, the gap is not that wide and although there are no readily available data, observations have shown that females will surpass males in SEAs in the near future.

30

Table 7 — Social Entrepreneurial Activity by Firm Entrepreneurial Process Phase and Gender, GEM 2009

Nascent Social Entrepreneurial Activity

Social Entrepreneurial Activity in New Organisation

Social Entrepreneurial Activity in Established Organisation

SEA: Social Entrepreneurial Activity in EarlyStage Organisation

0.8% 0.1% 1.2% 0.4% 0.3% 0.1% 0.7% 0.7% 3.4% 0.2% 0.8%

0.3% 0.0% 2.3% 0.4% 0.3% 0.1% 0.2% 1.6% 0.1% 0.2% 0.5%

0.0% 0.0% 0.6% 0.4% 0.3% 0.0% 0.0% 0.8% 0.0% 0.1% 0.2%

1.1% 0.1% 3.4% 0.8% 0.4% 0.2% 0.9% 2.2% 3.6% 0.4% 1.3%

Male SEA

Female SEA

Factor-Driven Economies

Algeria Guatemala Jamaica Lebanon Morocco Saudi Arabia Syria Uganda Venezuela West Bank & Gaza Strip Average (unweighted)

0.5% 0.0% 1.8% 0.3% 0.4% 0.2% 0.6% 1.2% 2.1% 0.3% 0.7%

0.5% 0.0% 1.6% 0.5% 0.0% 0.0% 0.3% 1.1% 1.5% 0.0% 0.6%

____________________________________________________________________ Extracts from GEM APS 2009

Business Entrepreneurship versus Social Entrepreneurship GEM (2009) posits that the lines between business entrepreneurship and social entrepreneurship may be blurred and therefore the percentage of the population involved in social entrepreneurial activity and early stage entrepreneurial activity overlaps. For Jamaica, this total amounts to 24%. Of this 24%, approximately 4% is strictly involved in social entrepreneurial activity and the other 20% in TEA or business entrepreneurship (Figure 19). The overlap of social and business entrepreneurship is quite significant, in that Jamaica (2.0%), ranks alongside other GEM countries such as Peru (2.5%), Columbia (2.8%), and Venezuela (1.7%). According to the 2009 GEM global report, this finding is important, in that it indicates that social and business entrepreneurship categories in Jamaica may be blurred.

GEM (2009) indicated that in richer countries social entrepreneurship may replace business entrepreneurship to some extent. It should be noted, however, that in the factor-driven economies social entrepreneurship is much higher than in the other two categories (Figure 19).

This is most likely dictated by the prevailing economic conditions in these countries that pose social challenges. It could be said that in Jamaica, social entrepreneurship works hand in hand with business entrepreneurship. In the context of a small developing country with social challenges, businesses tend to extend their corporate social responsibility to deal with social issues.

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Figure 19 Prevalence of Early-Stage Social Entrepreneurial Activity (SEA) and Early-Stage Entrepreneurial Activity (TEA) by Country

GEM APS, 2009

Social Entrepreneurship by Stage of Organisation GEM (2009) sought to explain the concept of the „social entrepreneur‟ and explored the sectors that social entrepreneurs enter. The report concluded that social entrepreneurs differ widely in the type of organizations launched and the kind of social or environmental problem they try to solve. The variety of sectors included education, health, culture, economic development and the environment. The social entrepreneur was depicted using the four typologies shown below (GEM, 2009): (Also see Table 8) 1. Traditional NGOs (high levels of social/environment goals; not-for-profit status) 2. Not-for-profit SE (high levels of social/environmental goals; not-for-profit status; innovation) 3. Hybrid SE (high levels of social/environmental goals; earned income strategy “integrated” or “complementary” to the mission) and 4. For Profit SE (high but not exclusively social/environmental goals; earned income strategy) 32

Table 8 — Prevalence of SEA Types by Country Traditional NGO (Cat. 1)

Not-ForProfit Social Enterprise (Cat. 2)

Hybrid Social Enterprise (Cat. 3)

For-Profit Social Enterprise (Cat. 4)

Social Activity for For-Profit Motives

Other

Factor-Driven Economies Algeria Guatemala Jamaica Lebanon Saudi Arabia Syria Uganda Venezuela West Bank & Gaza Strip Average (unweighted)

0% 0% 6% 0% 8% 10% 17% 13% 8% 8%

11% 0% 27% 50% 46% 30% 17% 19% 42% 27%

35% 0% 27% 33% 8% 19% 38% 19% 42% 25%

22% 0% 6% 10% 8% 15% 12% 25% 0% 11%

24% 50% 27% 5% 17% 10% 10% 16% 0% 18%

8% 50% 8% 3% 13% 16% 7% 9% 8% 14%

Efficiency- Driven : Argentina Bosnia and Herzegovina Brazil Chile China Colombia Croatia Dominican Republic Ecuador Hungary Iran Jordan Latvia Malaysia Panama Peru Romania Russia Serbia South Africa Uruguay Average (unweighted)

14% 0% 14% 1% 11% 0% 6% 3% 0% 3% 0% 27% 19% 33% 0% 5% 6% 29% 21% 0% 6% 9%

40% 35% 29% 29% 12% 14% 29% 24% 0% 19% 0% 23% 21% 22% 0% 21% 0% 0% 64% 15% 31% 20%

20% 32% 0% 25% 15% 22% 20% 25% 0% 34% 33% 18% 36% 45% 8% 20% 16% 0% 7% 26% 17% 20%

8% 15% 13% 15% 7% 21% 17% 11% 0% 13% 67% 0% 15% 0% 15% 0% 24% 0% 5% 22% 20% 14%

11% 12% 29% 30% 50% 38% 23% 24% 63% 22% 0% 23% 8% 0% 77% 42% 44% 63% 0% 13% 22% 28%

7% 6% 16% 0% 6% 5% 5% 13% 38% 9% 0% 9% 2% 0% 0% 12% 10% 9% 2% 24% 5% 8%

Innovation-Driven: Belgium Finland France Germany Greece Hong Kong Iceland Israel Italy Republic of Korea Netherlands Norway Slovenia Spain Switzerland United Kingdom United Arab Emirates United States Average (unweighted)

13% 7% 5% 19% 8% 0% 5% 7% 13% 0% 13% 3% 12% 11% 3% 6% 1% 8% 7%

25% 19% 17% 17% 48% 18% 34% 36% 25% 40% 25% 38% 28% 36% 17% 30% 14% 35% 28%

28% 43% 33% 29% 24% 24% 44% 25% 25% 0% 44% 32% 34% 22% 20% 32% 21% 26% 28%

10% 16% 21% 14% 3% 12% 5% 13% 22% 0% 10% 12% 14% 8% 17% 13% 23% 11% 12%

19% 9% 17% 22% 13% 41% 6% 13% 11% 40% 7% 15% 12% 20% 31% 13% 37% 13% 19%

6% 6% 6% 0% 4% 6% 6% 6% 3% 20% 1% 0% 1% 4% 12% 7% 5% 6% 6%

Source: GEM APS (2009). Note: includes SEA in nascent, young and established social entrepreneurs

33

Like many other GEM countries, Jamaicaâ€&#x;s SEAs are prevalent in education, health, culture and community economic development and the environment. The Jamaica Social Investment Fund (JSIF), National Conservation Authority (NCA) and the Early Childhood Commission are examples of active and valuable SEAs. Table 8 shows that Jamaica is low on Traditional NGOs at 6% compared to Uganda at 17%. Jamaica is below the unweighted average of 8%. In the area of Not-for-Profit social enterprise, Jamaica is at 27% which is the average unweighted level. Interestingly, the Middle East countries of Lebanon and the West Bank are at 50% and 42% respectively. In the area of Hybrid Social Enterprise, Jamaica at 27% is 2% above the average unweighted level and is close to most of the other countries in the factor-driven economies. For-Profit social enterprise category, Jamaica at 6% is below the average unweighted level of 11% and only Guatemala and the West Bank at 0% are below Jamaica. In the area of social activity for profit motives, Jamaica at 27% is only exceeded by Guatemala at 50%, and the average unweighted level is at 18%.

Social Entrepreneurship in Jamaica The presence of social entrepreneurial activities in Jamaica is high when compared with the other GEM countries. However, the views of respondents in the National Experts Survey are not this conclusive. The experts believe that social, environmental and community problems are generally solved more effectively by entrepreneurs than by governments. However, this view is shared by only 41% of the respondents while 33% were ambivalent (Figure 20). Given these results it cannot be definitively stated that the responses are positive.

Figure 20

From the survey, Community Service Organisations by a margin of over 80%, are of the view that they would be willing to partner with firms in social, community and environmental projects (Figure 21).

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Figure 21

Based on the survey, 54% of respondents support the view that the government has been able to bring potential entrepreneurs, businesses and CSOâ€&#x;s together around specific/environmental or community projects (Figure 22).

Figure 22

Respondents in the Jamaican situation (a majority of 74%) generally believe that businesses should invest more in socially responsible activities if they want to regain public confidence lost due to the global economic crisis (Figure 23).

35

Figure 23

There is a 79% agreement that in Jamaica social responsibility is a significant source of competitive advantage for new and growing businesses (Figure 24). This information is important to businesses that are not involved in social entrepreneurial activities as there are benefits to be gained.

Figure 24

Acts of social entrepreneurship by business organizations have become an expectation by the general population. An overwhelming majority of 86% of respondents believe that companies should give back some of their profits to the community by contributing to social or environmental projects (Figure 25).

36

Figure 25

37

Social Entrepreneurship in Action Agency for Inner-City Renewal Trench Town (Concrete, Jungle), St. Andrew, covering an area of one square mile with a population of approximately 30,000 has been one of Jamaicaâ€&#x;s most depressed, crime infested, poverty ridden, and socially depressed urban blighted communities for the past thirty years. As a community, the potential for commerce is large. Marginalization has resulted in the non-realization of this potential. Violence, including murder, has taken its toll on the area. Statistics given by the police show that the area accounts for approximately twenty-five percent of murders committed in the country. Trench Town has been the cradle of the reggae music with its international acclaim and its icon Bob Marley. The community has been identified as having the potential for cultural tourism, sports tourism, major entrepreneurial opportunities and human resource development.

The Agency for Inner-City Renewal (AIR), a faith-based not-for-profit organization, entered the inner-city community of Trench Town and its environs with the objective of community transformation. At the helm of this organization is Dr. Henley Morgan, Social Entrepreneur. The mission of AIR is outlined as follows: “Our mission is to ignite within people a passion for righteousness, enterprise and service; saved lives and sustainable livelihoods within a wholesome and harmonious environment�. The main objectives of AIR are outlined below: Enterprise Development - Micro-enterprise development and facilitation and Financing, technical assistance, marketing etc. through the Business Incubator Concept.

Youth Development - Education assistance, Work opportunity, Personal decorum, and Spiritual enrichment through the Mentoring Concept.

Peace Brokering - Pre-emptive actions, Dispute resolution, Prayer patrol, Symbols & interventions, Legal aid through the Peace Centre Concept.

People Empowerment - Employment generation & placement, Education and training, Placing the community in touch with service providers, and Problem solving through the Referral Unit Conc The structure of AIR is shown below in Figure 26.

A case study of the organization was conducted by the AIR team, and presented in a conference paper in 2008. The study has shown that with the intervention of AIR, under the auspices of Praise City International Church, in collaboration with the business community, NGOs, community leaders and other organisations, human resource transformation has taken place in a number of important areas. In the area of employment, three hundred members of the community who had not been engaged in any formal structured employment system were employed in major entities outside the community. From the education development perspective, financial assistance was 38

sought from a number of entities and countries including the German Government, the University College of The Caribbean (UCC) local and international cooperative entities.

These initiatives resulted in the AIR sponsored basic school increasing its enrollment from fifty children to two hundred. The University College of The Caribbean has awarded twenty scholarships to young adults of the Miracle Club to pursue Associate and Bachelor Degrees both in traditional mode and distance education with classes being held in the AIR boardroom. The Miracle Club is comprised of thirty young adults from the surrounding communities who are in a mentorship programme sponsored by AIR and Figure 26: AIR’s Community Framework Business in the Community

P.T.A

Craft Association

Church Group

DISTRICT DEVELOPMENT COMMITTEE

Citizen’s Association

Corner Reps.

Cultural Groups

Women’s Group Youth Clubs

Other Organizations within the Community

Sports

who are placed in corporate entities while pursuing educational development. A memorandum of cooperation has been established with the University of Technology, Jamaica to provide support to AIR for its Business Incubation Project. This has so far spawned a computer sales and repairs service, two wholesale entities and provision of business practice training to shopkeepers in the community. In the area of social and community development, strategic alliances and projects are now being undertaken in collaboration with the Social Development Commission, Trench Town Development Committee and the Women‟s Outreach Resource Centre.

39

Achievements of AIR 

Establishment/facilitation of a number of micro-enterprises including a wholesale grocery store on Maxfield Avenue and a computer servicing and network company at 85 West Road, Kingston 12



Two U.K. government certified courses in Food Hygiene and Food Handling for 24 community persons



Shop Keepers‟ seminars in collaboration with LASCO Distributors Limited for 23 local proprietors



Working with Praise City International to plan a summer camp for 2000 problem boys on No Man‟s Land



Organising several presentations by knowledge persons who shared income earning and life changing ideas with community persons



Participating in several interventions within the community e.g. Man Talk series to broker peace between warring factions



Sourcing approximately US$ 20,000 funding for basic school development from Johnson and Johnson Inc.



Facilitating Lift-up-Jamaica environmental preservation and sanitation programme, which trained 609 community persons and employed them short-term on a community clean-up project (December 2005)



Channeling tuition support to tertiary students in collaboration with the University College of the Caribbean



Training 25 women in sewing in association with Mother in Crisis (February 2006)



Participating in planning counseling for 350 students from six inner-city elementary schools to help them overcome crime induced trauma and thus successfully preparing them for their GSAT standardized examination (February 2006)



Offering a range of courses, namely: CXC Levels 1 and 2 English and Mathematics, and Remedial English and Mathematics for approximately 70 persons four evenings per week in association with Kingston Restoration Company (current)



Offering courses in Data Entry and Early Childhood Education respectively to approximately 150 adults in association with HEART/NTA (current).

One of the current initiatives of AIR is the „Livity Economic Advancement Programme‟. This programme is in collaboration with the Jamaica Social Investment Fund (JSIF) and City of Kingston Cooperative Credit Union (COK). Funds are sourced through JSIF, banked through COK and administered by AIR. The objective of this programme is to assist aspiring 40

entrepreneurs in getting a head start through loans and other services. Through the business incubation concept, people are encouraged and assisted to form their own businesses (Reynolds, 2010).

41

YOUTH CRIME WATCH JAMAICA Youth Crime Watch (YCW), an organization originating in the United States, was formed with the mission of providing an outlet to empower young people in communities to take an active role in shaping the world around them. YWC has served society for more than 30 years with hundreds of participating communities in more than 20 countries worldwide.

The organisation‟s goal is “To Provide YouthPowered Solutions for a Better Tomorrow”.

The Office of Social Entrepreneurship and Youth Crime Watch Jamaica (YCWJ & OSE) within the Department of Management Studies, University of the West Indies (UWI) Mona, (Faculty of Social Sciences), has developed the “Saving Lives through Enterprise” Programme. The programme aims to develop a model of sustainable community development, which seeks to prevent the formation of, and entry into violent gangs and to transform existing gang members into partners for enterprise, emphasizing the empowering of youth and women in entrepreneurship. The team has been involved in various foundation activities throughout 2009, with a variety of stakeholders spanning Public Sector, Private Sector, Non-Government organizations (NGOs) and Community Based Organisations (CBOs) throughout the country.

Some of the activities are outlined below: YCWJ/NCYD Mentorship Workshop - Members of the Youth Crime Watch group in Flankers, St. James, and the YCWJ Team facilitated a mentorship workshop on May 16th, 2009 for the NCYD Granville Place of Safety mentoring programme with staff from the Half Moon Hotel, who are a part of the Granville programme. The session facilitated the training of the staff as to their roles as mentors and provided the NCYD team with a monitoring and evaluation mechanism which could be used to plot the progress of the programme over time.

Partnering with Schools – The YCWJ-OSE partnership with Primary and Junior High Schools was borne out of the need to address the high levels of anti-social behaviour that exists among youth in our schools and society. This initiative forms part of the broader mandate of the YCWJ-OSE „Saving Lives through Enterprise‟ which sees the infusion of alternate livelihood activities as being integral to any efforts to curb anti-social behaviour in schools. In addition to targeting the students, the project aims to include other stakeholders such as teachers, guidance counselors and members of the community in general as a part of those who will ultimately benefit from the programme.

Student at Maverley Junior High School being presented with a textbook

42

Amnesty/Italian Consulate - The YCWJ & OSE has also collaborated with Amnesty International Jamaica/Italian Consulate on a book drive to furnish the library at the Tower Street Adult Correctional Facility in Kingston. The team assists with a Literacy/Education programme for inmates within the prison and aims to encourage entrepreneurship among members of the prison population with the aim of ensuring that they become contributing members of society through the development of their own creativity. We recognize that the role played by the YCWJ transcends prevention in its strictest sense but includes a transformative role for those who have transgressed the laws of the land.

Disaster Planning Session - The YCWJ team also collaborated with the Jamaica Red Cross and National Centre for Youth Development to facilitate a Disaster Planning Session for community groups in the greater Guys Hill area of St. Catherine. The team assisted with the formulation of a Disaster Plan as well as, in conjunction with the Social Development Commission, established a Community Development Committee for the area.

Training of Trainers Programme – YCWJ & OSE aided a number of inner-city communitybased organisations („at risk‟ communities) in developing strategic action plans. These communities included, Flankers, Dunkirk, Burgher, Jacques Road, Nanny Ville, Trench Town, Arnett Gardens, Back Bush and August Town. Additionally, the team facilitated a Parenting Training of Trainers Workshop for members of the CBO executives in these communities.

Torrington Park Youth Action Club – Leadership training session was done in collaboration with Young Americas Business Trust with members of the youth group within the community.

Mentoring Workshop for Sandals Foundation – The YCWJ and the Flankers Resource Centre (Flankers Peace and Justice Centre) jointly facilitated a two week mentoring workshop with members of the Sandals chain of hotels in Jamaica. The session was a part of the Sandals Foundation efforts to expand its mentoring programme. Approximately 100 Sandals team members participated in the training which ran from June 22 to July 3, 2009 in Ocho Rios.

Dr. Kadamawe Kn‟ife and Allan Bernard, lecturers in the Department of Management Studies, UWI, are the directors of YCWJ-OSE.

Participants at the Western Volunteers’ Training

43

THE JAMAICA SOCIAL INVESTMENT FUND The Jamaica Social Investment Fund (JSIF) was established in 1996 as a component of the Government of Jamaicaâ€&#x;s strategy to reduce and eradicate poverty. The JSIF invests in community-based projects as a means of empowering communities to build social capital.

JSIF Partnerships Over the years JSIF has been creating and developing partnerships with other organizations. The establishment of partnerships is a crucial factor for fulfilling JSIF's mandate of poverty alleviation. By joining forces strategically with key partners, the Fund ensures that there is a reduction in the duplication of efforts and allows for a more streamlined utilization of scarce resources. Collaboration allows JSIF and its partners to more effectively take advantage of available expertise and experience. To this end, the Fund has forged valuable partnerships with line ministries (some more closely than others), government agencies, private sector entities as well as non-government organizations.

The implementation of the Inner City Basic Services Project (ICBSP) has resulted in the formation of new partnerships between the JSIF and key stakeholders through the signing of a Memorandum of Understanding (MOU). The Fund's effort to achieve ISO 14001 certification has also led to the formation of international partnerships with other organizations. As a means of further enhancing poverty alleviation efforts by strengthening community interventions, The (JSIF) has actively sought to forge partnerships with the private sector. JSIF is particularly keen on collaborations that result in improvements in the education sector - lending support to basic, infant, primary and all age schools and private sector organizations are encouraged to participate.

This initiative has had moderate success. In 2009 JSIF successfully partnered with two private sector entities, namely, the Digicel and Desnoes & Geddes Foundations (as examples) to implement community projects.

The Digicel Foundation As a direct result of this new thrust, in 2004, JSIF collaborated with the Digicel Foundation in the construction and equipping of the Lakes Pen Basic School in St. Catherine. The project was completed in November at a cost of J$9.8 million. The fifty students and three members of staff at the school are now benefiting from a new, fully equipped three-classroom building with kitchen and sanitary facilities as well as playground equipment.

JSIF again partnered with the Digicel Foundation in 2009 to build a new basic school, in Montpelier, St. Elizabeth at a cost of $9.6 million. The project involved the construction of a three-classroom building with sanitary facilities and a sick bay. In both instances, the Digicel Foundation provided funding for the projects, while JSIF provided technical expertise in the form of procurement of all goods and services and overall supervision of the construction process.

44

The Digicel Foundation is a non-profit organization that distributes and utilizes funds on a charitable basis for the purpose of building communities and community spirit in Jamaica.

The Desnoes & Geddes Foundation In February 2007 a Memorandum of Understanding (MOU) with the Desnoes & Geddes Foundation was signed, thereby concretizing the collaborative effort between the Foundation and JSIF. Under the terms of the MOU, the Foundation committed to contribute J$4 million towards assisting in the funding of Rapid Impact Projects under the Inner City Basic Services Project (ICBSP). The targeted communities include Flankers in St. James, Knollis in St. Catherine and Bucknor in Clarendon.

The Desnoes & Geddes Foundation is the charitable arm of Red Stripe. Their mission is: ―Impacting Lives, Enriching Communities.‖ The Foundation was formed exclusively for the purpose of carrying out charitable projects aimed at relieving poverty, suffering and distress among Jamaicans.

Partnerships have been effective in reducing project costs and assisting the agencies with which the organization collaborates to have a better understanding of the need for community involvement and empowerment. The JSIF continues to believe in, and advocate for strong partnerships with other stakeholders including the private and the public sectors, in order to streamline and enhance its ability to offer services to as many Jamaicans as possible.

Partnerships also facilitate the future sustainability of JSIF investments and encourage cohesiveness and effective utilization of scarce resources.

45

FINANCING ENTREPRENEURSHIP Initial start-up costs often exceed the nascent entrepreneurâ€&#x;s ability to provide adequate funding for start-up activities. New ventures need capital to purchase equipment, to purchase or rent property, to train and pay employees, to advertise, for product development, and to maintain a healthy cash flow. Most new firms, therefore, need to raise the money required to carry out all these activities, and it is generally expected that banks and other financial institutions would act as sources of funding for these entrepreneurs. However, our financial institutions have fallen short in this regard.

The 2009 APS data revealed that only 47% of respondents who are entrepreneurs have sourced funds from banks and other financial institutions while the majority of respondents had received funding from government programmes and informal sources as seen in Table 9. The 47% of start-up money obtained from financial institutions compares favourably with the 35% of 2005, a 12% increase over the four-year period. This implies that more entrepreneurs are accessing funds through the formal sector compared to 4 years ago. It is possible that banks have made more funds available to the MSME sector over time and that they have developed more products in favour of the sector, or more institutions have entered the market thus increasing availability.

Indeed, some commercial banks in Jamaica have accentuated their credit profile to the Micro, Small and Medium Enterprise (MSME) sector through promotions and sponsorships. More creative packaging of the loan product, such as the use of credit cards, has also contributed to increased access and availability.

Table 9 Sources of Funding (Start-up Money) 2005 & 2009 SOURCES OF FUNDING

2005 (%)

2009 (%)

Banks and other financial institutions

35

47

Self

45

45

Close family members

29

38

Government Programmes

12

16

Other kin or relatives

10

13

Work Colleague

3

6

Friends or neighbours

2

3

Strangers

1

1

n/a

11

Other source

46

Informal Financing Jamaican entrepreneurs, particularly those in the MSME sector continue to rely primarily on informal sources of investment, meaning that funds to start or grow the business are obtained from the founders themselves and from the 3Fs (Family, Friend, or Foolhardy strangers) Table 9.

This indicates that an individual who wants to start a business will make every effort to do so from personal funds and complement these funds by borrowing from friends, family and others.

An examination of the informal sources in Table 9 shows that most entrepreneurs provided the money from personal funds (45%) while other sources of funding included close family members (38%) and other relatives (13%). It should be noted that a combination of sources may be used to obtain funding. Even though more entrepreneurs are using debt financing than in previous years, entrepreneurs may be combining this with personal funds or funds from other sources because these sources also show an increase. As displayed in Table 9, the pattern in the use of informal investment in 2009, though slightly higher than in 2005, was similar.

Jamaica ranks highly among the countries that rely heavily on informal financing for entrepreneurial activity. Among the 54 countries that participated in GEM 2009, Jamaica with a prevalence rate of 8.2%, ranked 5th in terms of its level of informal investment behind Uganda, Guatemala, Peru and Iceland respectively (Figure 27).

Figure 27 Informal Investors Prevalence Rates for 54 Nations in 2009, by Phase of Economic Development, Showing 95 Percent Confidence Intervals

Source: GEM Adult Population Survey (APS), (GEM Global Report, 2009)

47

This indicates that in 2009, Jamaica utilized more informal sources to fund entrepreneurial activity than most of the other GEM countries. Data from the GEM 2005 Global Report shows that in 2005 Jamaica was the highest ranked among the 35 participating GEM countries, with a prevalence rate of 8.4% for informal financing. This clearly indicates that there has been no real change in the level of informal financing in Jamaica over the past 4 years.

The percentage of informal capital as a percentage of GDP per capita for Jamaica in 2009 was 0.3%, indicating that although entrepreneurial activity is financed mainly by informal investment, the amount of this investment capital as a percentage of GDP is extremely low or insignificant (Figure 28). This rate of investment capital to GDP per capita (0.3%) positions Jamaica nearly at the bottom of the 54 GEM countries, with only two countries having lower ratings. It should be noted, however, that entrepreneurs in countries with higher start-up costs need more informal investment, therefore the purchasing power of a countryâ€&#x;s currency must also be taken into account in making cross country comparisons (Bosma & Levie, 2009).

Figure 28 Amount of Informal Capital as a Percentage of GDP per capita, GEM 2009

Source: GEM Adult Population and IMF (GEM Global Report, 2009).

48

Methods of Financing The entrepreneurial financing landscape in Jamaica has not reflected any significant change in recent years. Entrepreneurs in the micro and small business sector tend to seek access to credit from financial institutions if their informal sources have been exhausted. In a high interest rate regime and persistent demands for traditional sources of collateral by the financial institutions, the use of alternative sources of financing, equity financing in particular, has been highly recommended. Barringer & Ireland (2010) outlines three sources of financing: Debt, Equity and Creative Sources. Table 10 displays the views of respondents regarding these sources of financing as well as other financing options.

Table 10 Availability of Funding for New and Growing Firms (2005 – 2009) Sources of Funding

2005

2009

Equity Funding

16.2

22.8

Debt Funding

36

36.1

Government Subsidies

10.8

14.7

Private Individuals Other than Founders Venture Capitalists

16.2

17.2

8

11.5

Initial Public Offerings

21.2

13.9

Even though financial institutions provide a financing option that many entrepreneurs have utilized, it is clear that Jamaican entrepreneurs are drawn to more informal methods of financing their businesses. Their ability to access more formal sources of capital may be reduced by the various barriers that present themselves to the entrepreneur. Such barriers may include the primary objective of banks, an underdeveloped venture capital market, absence of business angels, lack of collateral, high interest rates, as well as prevailing bureaucratic procedures, and absence of a credit bureau. Available sources of funding are discussed below.

Equity Financing According to Barringer & Ireland (2010), equity financing is comprised of Business Angels, Venture Capital and Initial Public Offerings (IPOs). When asked if there is sufficient equity funding for new and growing firms, 22.8% of our experts agreed, 65.8% disagreed and 11.4% were indifferent - could not determine if this was so or not. Equity funding continues to be underutilized, as illustrated in table 10 by the low percentage of respondents (16.2%) who believed in 2005 that this method of financing was adequate, the number increasing by only 6% four years later.

49

Venture Capital Investors who are seeking to put their money in early-stage enterprises that are innovative, show potential for rapid growth and high profits may do so through venture capital investments. Many entrepreneurs are rejected by venture capitalists if their business does not show these characteristics. Venture capitalists are usually successful entrepreneurs, wealthy individuals, and foreign investors. From Bosma & Levieâ€&#x;s (2010) observation, the number of venture capitalists world-wide is miniscule, but they however make significant contributions to the GDP per capita of their country. They point out that in 2008 most venture capital investments world-wide were invested in seed, start-up and early stage companies in the United States and in Europe. They further indicate that while the dollar investment in the US was greater, more companies benefited from the investment dollar in Europe. Japan and China were two countries that showed increases in the use of venture capital in 2008.

The venture capital market in Jamaica remains extremely underdeveloped despite calls in various forums for its development.

Table 10 shows that in 2005 only 8% of respondents believed that there was sufficient venture capital investments available for new and growing firms. The figure increased by 3% to 11% in 2009, a slight increase over the four-year period. Figure 29 shows in more detail the views of experts regarding the availability of venture capital for the four years that Jamaica has participated in GEM. In 2009, 83% of respondents were of the view that there is insufficient venture capitalist funding available for new and growing firms; 11.5% supported the view while 5.5% were undecided.

Despite the merits of venture capital, there are still drawbacks, and its relevance to entrepreneurial development in Jamaica should be assessed. The prevalence rate of the use of venture capital to GDP is clearly higher in most of the innovation driven economies. Analysts and other interests in Jamaica are advocating for the establishment of venture capital firms.

However, Glas, Drnovsek and Psenicny (2002) raise the question “Is private equity capital really the solution for developing and transition economies? They comment that the supply side and demand side of the market for equity capital pose serious questions about how far this source of capital, either through venture capital funds or the business angel type of finance can provide a workable solution to the imminent gap in SME financing and whether the government should support it by offering preferential treatment to investors. It is the tendency of venture capital investors to back firms that show high profit and growth potential. This includes firms involved in research and development or projects with patented inventions, and technological or scientific 50

breakthroughs. Venture capitalists also support high-tech oriented firms and fast growing firms involved in traditional activities by applying highly innovative approaches to the market to boost market share and growth (Glas et al, 2002). Are these characteristics of the typical Jamaican entrepreneur?

Business Angels Business angels are not popular in Jamaica and many persons are not familiar with the term.

Business angels are individuals who invest their personal capital directly in start-ups (Barringer & Ireland, 2010). They play a key role in the financing of business ventures, particularly those ventures that show a high growth potential. Ramdani (2009) concurs that business angels invest large amounts of money in seed, start-up, and early-stage enterprises, as well as contribute their skills, expertise, knowledge, and contacts in the businesses in which they invest. Ramadani (2009) further explains that as a financing source, business angels fill the gap between founders, family and friends on the one hand, and institutional venture capital funds on the other.

(Barringer & Ireland (2010) present a profile of a typical business angel. They see the business angel Figure 30 Percentage Distribution of Business Angels as someone about 50 years old, has high income and in the 2006 sample wealth, is well educated, has succeeded as an entrepreneur, and is interested in the start-up process.

3% One important contribution of business angels to the entrepreneurial process is their willingness to make YES NO relatively small investments, thus giving access to a 97% start-up that needs a small amount of money compared to the large sum that venture capitalists require as a minimum investment (Barringer & Ireland, 2010). Our respondents in 2006 (97%) were of the view that business angels were basically non-existent in Jamaica (Figure 30).

Table 10 highlights the fact that for the years 2005 and 2009, funds available for start-ups from private individuals other than founders have been grossly insufficient. Business angel investors would fall into this category. The availability and sufficiency of funding from private individuals other than founders for new and growing firms was supported by only 17% of respondents (Figure 31). Seventy-seven Figure 31 percent agreed that there was not enough Funding from Private Individuals funding from this source, while the other 6% were undecided.

Sufficient Insufficient Undecided

Initial Public Offerings

6%

17%

Initial Public Offerings (IPOs) represent the first sale by a company of stocks or shares to 77% the public. The firm becomes listed on a stock exchange and its shares are traded publicly.

An IPO is an option open to the entrepreneur to raise capital. In 2005 only 21% of respondents believed that there was adequate availability of funding for new and growing firms 51

through IPOs. This number was reduced by 7% down to 14% by 2009. From this response, it is obvious that IPOs for funding growing firms in Jamaica is not a common practice. This may be due to the smallness of early- stage entrepreneurial firms that do not meet the requirements to be listed on a particular stock exchange, therefore, many firms cannot capitalize on such opportunities. Another reason may be related to the Jamaican culture wherein individuals are hesitant to share ownership of their business due largely to a lack of trust, and maybe, there is a lack of understanding of how the process works. In April 2009 the Jamaica Stock Exchange (JSE) introduced a Junior Stock Exchange as a possible solution to the inaccessibility to funding

by SMEs and as a viable alternative to debt funding. SMEs can now raise capital through IPOs and capitalize on expansion opportunities. The process affords them greater visibility and improves the companyâ€&#x;s profile. The capital requirements for listing on the Jamaica Junior Stock Exchange (JSEjnr) is between J$50 million and J$500 million. Currently, tax incentives are extended to companies that list on the JSEjnr in the form of tax breaks - companies enjoying tax free profits for the first five years after listing and pay only a half of the corporate tax in the second five years. There are however requirements that may create barriers to listing and these include advice of stock brokerage firms, accounting professionals and legal representation. At the end of 2009 only one firm was listed on the JSEjnr, Access Financial Services Ltd., a small business loans and personal loans company.

Debt Financing Despite the growth in the use of debt capital, as much as 47% of the experts still believe that the amount of debt funding available is insufficient. Thirty-six percent of respondents believe that there is sufficient debt funding available to new and growing firms while the other 17% were undecided (Figure 32).

The issue of availability of funds versus accessibility to these funds also remain a concern.

Table 10 shows that there has been an increase in the use of debt funding (funds Figure 32 Availability of Debt Funding from banks and other financial institutions) between 2005 and 2009. Collateral requirements by banks continue to be Sufficient Insufficient Undecided stringent and despite calls from policy makers and interest groups, the lending 17% 36% institutions still maintain a high interest rate regime, a major deterrent in accessing debt 47% financing by Jamaican entrepreneurs. It may be therefore assumed that there has been some form of relaxation in borrowing requirements (collateral requirements for example) by some institutions, thus making accessibility to funding less difficult. However, it is widely believed, as indicated by our experts, that more funds should be made available to the sector by banks and other financial institutions to reduce the financing gap. A plausible reason for the maintenance of this gap is embedded in the primary objectives of financial institutions; that although one of the primary objectives of financial institutions is to facilitate borrowers, in reality, the financial sector has a major responsibility to safeguard depositorâ€&#x;s money and to 52

invest the entrusted funds in projects with high returns and low risk. According to Siewertsen et al (2003), this focus on low risk and high yields traditionally excludes the financing of small and micro-enterprises because these projects involve high risks, and profits do not compensate for these risks. Also, the focus of the financial sector is on already established businesses, so there is a conflict between the aim of supporting weak entrepreneurs and the need to build financial sustainability by lending to strong entrepreneurs. It is therefore the small entrepreneur who suffers in the end.

The downward trend in interest rates augers well for the entrepreneurial sector and with the current negotiation for the Jamaica Debt Exchange Programme (JDX) between the government and the commercial banking sector to lower interest rates, there is high expectation that more entrepreneurs will be able to afford debt capital. Credit bureaus, which have not been formally used in Jamaica to date, also increase the availability of consumer credit at more affordable rates.

A credit bureau provides available and up-to-date information to lenders and other legitimate interested parties on their clients. The availability of their credit information to lenders may enable entrepreneurs to access non-secured credit, or small loans that do not require collateral, thus creating greater access to funds and at more negotiable rates. The Credit Reporting Bill is in its final stages and will become legislation very soon. The Credit Reporting Act will provide for the sharing of credit information among specified financial institutions and for the licensing and supervision of a credit bureau.

Subsidies Many persons are of the view that the involvement of governments in enterprise financing should be minimal or non-existent. They believe that entrepreneurial financing should be left in the hands of more capable individuals and entities in the private sector. However, existing market conditions within the country may not entice many private individuals into the financing of entrepreneurial ventures and neither do the macro economic conditions. The majority of our experts in 2009, believed that the government should play a greater role in stimulating the growth of small and medium enterprises through subsidies. When questioned about the sufficiency of government subsidies available for new and growing firms, a Figure 33 mere 15% agreed that this is sufficient Sufficiency of Government Subsisies while the majority (73%) believed that this was insufficient (Figure 33).

12%

Even though the majority of experts felt that the degree of government subsidy to the sector is insufficient, the views in 2009 were more positive than in 2005. In 2005 only 10.8% of respondents felt that there were adequate government subsidies allocated to the sector and this increased to 14.7% in 2009 (Table 10), indicating that there has been some improvement in this regard.

15% Agree

Disagree 73%

Indifferent

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Despite efforts on the part of some financial institutions and the government, the financing gap still exists; that is, the demand for capital continues to exceed the supply. Our experts believe that injecting more funds into the sector for MSMEs will present some solution to the problem.

This idea has its merits in the sense that if the supply of capital increases then this will assist in closing the gap. Also, if supply increases then it forces institutions to become more competitive thus pushing down interest rates hence increasing accessibility.

Promoting the Use of Micro Credit for Social Inclusion Poverty reduction is the objective of any nation and entrepreneurship plays a significant role in achieving this objective. Enterprise development is viewed as one method of poverty alleviation. The term social exclusion has long been used in the political arena and is becoming popular in the academic field. According to Pierson (2002), social exclusion is a process that deprives individuals and families, groups and neighbourhoods of the resources required for participation in the social, economic and political activity of society as a whole. Causes of social exclusion include economic deprivation, low educational attainment, unemployment, race, gender, and social class. Pierson (2002) believes that social exclusion is primarily a consequence of poverty and low income. Increasing credit to the MSME sector contributes to the reduction of social exclusion and hence increases social inclusion.

According to a study by the Inter-American Development Bank (Navajas & Tejerina, 2006), the number of institutions offering microfinance in Latin America and the Caribbean Region are expanding but at the same time it is important that credit is extended to all segments of the population. The study outlines the number of Micro Finance Institutions (MFI) in each country, Jamaica having only 3 of such institutions in 2005, compared with other GEM countries in the region - Peru with 67, Guatemala 23, and the Dominican Republic 15 (Table 11).

Table 11 Micro Finance Institutions in the Caribbean No. of MFIs

Average Loan US$

Dominican Republic

15

832

Guatemala

23

757

Peru

67

1,291

Jamaica

3

376

Country

Extracted from Microfinance in Latin America and the Caribbean ( 2005)

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Indeed, the size of the market will determine to some extent the existence of these organizations and their scope of operations. In Table 11, if the ratio of the number of MFIs to average loans is examined, Jamaica has the highest ratio indicating that Jamaica has fewer institutions than the other GEM countries but these few institutions distribute more funds than the other GEM countries. This endorses the fact that the gap in microcredit financing in Jamaica is wide, demand exceeding supply. More micro-financing organizations are therefore needed in Jamaica, particularly in the rural parishes.

Bygrave and Quill (2006) in the GEM Financing Report, posited that micro-financing is a powerful tool in the fight to reduce poverty in poorer nations. Therefore, if more persons are involved in business activities then they will be able to sustain themselves and their families financially and raise their standards of living and education levels to become socially included.

In the study conducted on behalf of the European Commission (Siewertsen et al, 2003), the authors expressed the view that micro-finance can be a successful tool for social inclusion if demand and supply factors are matched. The availability of finance to the socially excluded is therefore of paramount importance in the alleviation of poverty through microenterprise creation and self-employment. Professor Muhammad Yunus, Nobel Peace Prize winner and founder of the Grameen Bank in Bangladesh, believes that access to credit is a human right and that micro credit should be extended to the poorest of the poor, to women in particular and those who head households (Muhammed Yunus, 2008).

Lashley (2004) believes that the provision of finance to those with limited access has been relatively successful in the Caribbean. This view was also posited in the GEM Jamaica 2008 Report (Skeete et al, 2009, p. 30). Lashley (2004) describes „successful microfinanceâ€&#x; as institutional self- sufficiency; the sustainable rising of incomes above the poverty line. He argues that despite the success in certain arenas, there have been several failures, mostly due to a lack of appreciation of context and strategic direction. He believes that the problem with microfinance in the Caribbean is the lack of any single overriding long term aim. According to Lashley (2004), poverty alleviation must be identified as a primary aim with the eventual aim of enterprise development and eventual sustainability. He asserts that the poor need to be clearly defined and identified if microfinance is to return to its original mission and act as an effective tool in the alleviation of poverty in the Caribbean.

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GOVERNMENT POLICIES Government of Jamaica in developing national policies and programmes, has over the years sought to invite public participation. Policies and programmes related to entrepreneurship are no exception. Through the use of agents of change who are often field workers, community development officers, liaison officers, and community organizers of agencies such as the Social Development Commission and the Urban Development Corporation, community participation has been invited and facilitated. „JA People‟, a publication of the Planning Institute of Jamaica, (PIOJ, 2006) makes reference to a Public Sector Code of Consultation, “which outlines the steps to be followed in engaging the public so that their input can be factored into all national policies, plans and programmes.”

The 2009 (NES) showed relatively small changes in the responses given as to whether or not government policies consistently favour new firms. The responses are illustrated in Figure 34.

Thirty-eight percent (38%) of respondents felt that government policies do not favour new firms compared to the 24% who shared this view last year. A similar percentage were of the opposite view while 21% of the experts were neutral on this issue. This is in keeping with the view that the economic downturn has adversely impacted small businesses and that government should do more to protect and assist them.

Figure 34: Government Policies Favour New Firms

In a “Dialogue for Development” lecture entitled Entrepreneurship & Economic Growth, Hall (2004) stated that “There is strong evidence to suggest that the countries or regions that have achieved sustained economic growth to now be classified as developed, owe much to a vast army of entrepreneurs.” While Jamaica has a large number of entrepreneurs and is endowed with bauxite, „sun sea and sand‟ – which tourists may enjoy, and the climatic conditions suitable for the farming of a wide range of produce, the country has not accomplished the level of economic growth that many would have expected. The GEM 2009 global report classifies Jamaica as a factor driven country while in 2008 it had been classified as an efficiency-driven economy.

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Jamaica‟s main industries including agriculture, tourism, and mining and quarrying, rely heavily on the country‟s natural resource base and many entrepreneurs use these sectors as the basis of their businesses. The 2009 data shows that the experts are of the view that government is providing less policy support for new and growing firms at both the national and local government levels. There was a 20% increase in the number of experts who were neutral on this issue in 2008. The experts indicated that in their estimation there was a slight improvement in the ability of a new firm to get most of the required permits and licenses within a limited time frame.

Figure 35 illustrates that 78% of the experts agreed that the amount of taxes charged in Jamaica is a burden for new and growing firms. This represents an improvement over the last survey when 91% had indicated that this was so. More of the experts were also of the opinion that taxes were not applied in a predictable and consistent way, with a decrease over 2008 in the percentage of experts who indicated that the statement was false.

Figure 35: In my country, the amount of taxes is NOT a burden for new and growing firms

Figure 36 represents the views of the experts regarding the ability of new and growing firms to cope with government bureaucracy, regulations and licensing requirements. As much as 79% of respondents indicated that this was a problem while only 12% did not perceive this to be difficult. It could therefore be assumed that the steps being undertaken by government to create a “one-stop‟ agency in an effort to reduce bureaucracy is not yet having a significant impact.

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Figure 36: In my country, coping with government bureaucracy, regulations, and licensing requirements is not unduly difficult for new and growing firms

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GOVERNMENT PROGRAMMES In April 2009, Cabinet approved the establishment of the Microfinance Apex Facility at the Development Bank of Jamaica (DBJ). The Micro and Small Enterprises (MSEs) sector also benefited from the Government of Jamaica‟s December 2008 stimulus package for Micro Small and Medium Enterprises (MSMEs). This was intended to strengthen their capacity to withstand the effects of the global financial and economic crisis. The benefits to the MSEs were: 1.

An allocation of $250 million by the DBJ through the Jamaica National Small Business Loans Ltd.

2.

$150 million made available by the JBDC to small businesses and micro-enterprises that were unable to meet the full collateral requirements for conventional loans.

The Young Entrepreneurs Programme (YEP), was launched in April, 2009, and has a portfolio of J$200 million made available by the DBJ to Jamaica National Small Business Loans Ltd., the Credit Union League, Nation Growth Micro Finance Ltd., Access Finance Services Ltd., and Micro Credit Ltd. for on-lending. The maximum loan amount is J$100,000 per person at an annual interest rate of 10% on the reducing balance. The YEP was established by the Government of Jamaica (GOJ) to encourage school leavers at high schools and tertiary institutions with a passion to operate their own business, to access training and financing for the establishment of viable micro businesses (DBJ, 2009).

Through the Target Growth Competitiveness Committee (TGCC), entrepreneurs benefited from a number of interventions. This is one of the twelve support components of the European Union (EU) and GOJ funded Private Sector Development Programme (PSDP). In May 2009, the TGCC held a Doing Business Report Roundtable with stakeholders with the objectives of ensuring that: 1. Stakeholders were fully aware of all the initiatives being undertaken by the GOJ to improve the ease of doing business in Jamaica; and 2. There is better communication between the public agencies and the users, especially those who participate in the report.

The specific activities undertaken by the TGCC in regard to accomplishing these objectives were firstly to improve the ease of getting credit by improving Jamaica‟s collateral framework through a system of secured lending transactions, with movable assets, which along with the credit bureau, should significantly improve access to financing. This programme was developed with the assistance of the World Bank and the TGCC in October 2009. It is anticipated that this will improve Jamaica‟s performance in the Doing Business Report. Secondly, the TGCC in collaboration with the Companies Office of Jamaica (COJ) began the process of developing a single business registration form which would include the requirements of all the agencies involved in the business registration process. The aim is to have the COJ act as the single point of contact for business registration. This is expected to be finalized in 2010. In addition to 59

improving the ease of doing business, it will facilitate the establishment of a virtual one-stop shop for starting a business. (These improvements were referenced from the Economic and Social Survey Jamaica 2009 report).

Figure 37 shows the responses of the experts in the 2009 survey regarding government assistance for new and growing firms through a single agency.

Figure 37: In my country, a wide range of government assistance for new and growing firms can be obtained through contact with a single agency

The results show that the efforts being made to realise this objective have not yet had any significant impact on the ease of doing business in Jamaica. Jamaicaâ€&#x;s national development plan commonly referred to as the Vision 2030 Plan, states that “Jamaica has made progress in improving aspects of its bureaucracy, including creating a streamlined process for registration of new companies that is among the best in the world.â€? As Jamaica continues to improve its business environment which will reduce the pressure on entrepreneurs wishing to start new businesses, the ongoing public sector modernisation has contributed to an improvement of the level of customer service delivered by public sector entities. It is now relatively easier to open and close a business than in previous years.

Despite the efforts of the various organizations, the perception of our respondents regarding the level of support from government programmes for small businesses remained Figure 38 negative in 2009. When asked if new and Support from Government growing firms get the help that they need Programmes through government programs, only 20% of responses were in the affirmative, 23% were undecided and 57% disagreed (Figure 38).

20% 23% Adequate The 2009 survey shows some improvement Inadequate in the perception of the experts regarding the 57% ability of science parks and business Indifferent incubators to provide effective support for new and growing firms (Figure 39). The 60

percentage of experts indicating that the statement was false decreased while those who indicated that it was true showed a significant increase in the category for 2008.

Figure 39: In my country, science parks and business incubators provide effective support for new and growing firms

The Technology Innovation Centre at the University of Technology, Jamaica was the first business incubator established in the country. Recent efforts are being made by government to establish other such facilities. They have not, however, been fully developed to offer the support services required of such facilities. The political parties have also provided assistance to persons within their membership to start up and operate entrepreneurial ventures. Many of these fall in the micro and small businesses categories.

There has been some improvement in the effectiveness of government programmes aimed at supporting new and growing firms. There is need for greater improvement in this area however, to encourage entrepreneurial development in the country. The results of the 2009 NES indicate that Jamaica needs to improve the number of government programs, the competence of staff in government agencies, and the accessibility and effectiveness of these programmes to new and growing firms. Much, in this regard, is expected from the Public Sector Modernisation Programme now underway.

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MARKET OPENNESS The following paragraphs which contain descriptions from Jamaica‟s Promotional Agency‟s (JAMPRO) website seek to present a summary of Jamaica‟s investment climate and a welcome to Jamaica‟s potential investors and may be used as an indicator of its market openness.

“Jamaica boasts an open and diverse economy with encouraging prospects. This is supported by strong political commitment to free enterprise, strong brand identity and the expansion of benefits as derived from the country‟s membership in the Caribbean Single Market and similar trade agreements. In addition, the country ranked 21st for global interest as an inward investment location and 12th in FDI technology transfer and has made tremendous strides in creating an environment conducive to enterprise development (Jamaica Trade and Invest (JTI), 2010).

The article continues to detail some specific attributes which remain significant to any qualification to be an attractive market. „Jamaica‟s strength as an investment location is grounded in a number of factors, namely its large English speaking population, its competitively priced labour force, accessibility to a diverse labour pool, and its ideal location for trading with the rest of the Western Hemisphere.

Its proximity to the United States, its historic and emerging relationship with the Latin American bloc and its proximity to the Panama Canal are noted as advantages. Additionally, the island is served by an abundance of natural resources and a well developed infrastructure.

The Economic Frontier JAMPRO further describes the economic environment when it continues: “Jamaica subscribes to a liberal trade regime, and together with the generous fiscal and market incentives available, has proven attractive to investors. There are no restrictions on the movement of capital, profits and dividends. There are virtually no exchange controls, and no approval is required for repatriation of profits and dividends. Agreements involving the payment of technical assistance fees, royalties, management fees, and trademark and patent fees must reflect arm's- length consideration for tax deduction to be available”.(JTI, 2010) The climate as described by JAMPRO is supported by a number of initiatives and legal incentives that support the investment climate, and may also be interpreted as factors that will impact Jamaica‟s entrepreneurial index. This investment climate may also attract an influx of large firms whose presence may inhibit nascent entrepreneurs. Therefore market openness needs to be evaluated for balance and development.

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Work Permit Applications Additionally, openness of the market may be examined based on the criteria for satisfying work permit applications. Does Jamaica as a market welcome/accommodate possible entrepreneurs from other markets? The reports from the Ministry of Foreign Affairs indicate that persons from “ North America, Latin America, the Caribbean, Europe, Africa, Asia and Oceania” received work permits in 2009. Asia had the largest number of recipients with 1,901 or 53.9 per cent of the total, with 538 permits going to Europeans (Jamaica Information Service (JIS), 2010).

The industries in which applicants have been permitted to work are also significant and as the JIS 2010 report indicates, this is varied as a total of 2,115 work permits were approved for the wholesale, retail, hotel and restaurant services industry, while the construction and installation sector followed with 426 or 12.1 per cent. The sector that received the smallest number of work permits was mining and quarrying with 15 or less than one per cent of the total.” In examining the data collected for the 2009 GEM study, with regard to market openness, the following indicators were analysed: 

perceptions of the respondents to changes in the consumer goods market



perceptions of the respondents of the business to business markets and dramatic changes from year to year

Consumer Markets In factor driven economies, in which there is a large agrarian sector and a dependency on subsistence economies the focus is on the provision of basic requirements. In this environment these economies are seeking to develop efficiency enhancers and to develop entrepreneurial conditions (Bosma et al, 2010). Jamaica has been defined as a factor driven country and therefore would exhibit the characteristics so defined.

Figure 40 suggests that consumers do not see a changing consumer market year to year. With only approximately 9% agreeing with the statement that this is so and with 35.4% responding in a neutral manner and 26.4% saying it is somewhat false, this could indicate that the consumer markets in Jamaica do not change year to year.

This would suggest a stable consumer market without varied products being introduced, a condition required for a successful entrepreneurial culture development.

Figure 40 Year over Year Perception of Changes in Consumer Goods Market R e s p o n s e s

Completely True Somewhat True Neither True nor False Somewhat False Completely False

0

10

20

30

40

Percent

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In further examining the business markets, the data in Figure 41 indicates that cumulatively, over 70% of the sample responded that the business markets do Figure 41 not change from year to year.

This could suggest In my country, the markets for business-to-business stability/lethargy in markets, goods and services change dramatically from year to but could also suggest that year both consumer and business 32.4 markets are prime facilitators 26.5 P 40 23.5 for innovative and 14.7 e 30 20 2.9 entrepreneurial development. r 10 A review of the data in Figure 0 c 42 summarizes the customer e profile according to markets n and provides a synopsis of the t international orientation of businesses. It is significant for Responses Jamaica that the data shows that more than 25% of respondents report that they have customers outside the country. This suggests that there is a fair degree of openness to going outside its own borders to do business.

Figure 42 Percentage of Early-Stage Entrepreneurs with International Orientation, 2004-2009

Source: GEM 2009 Global Report

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Market Entry Figure 43 suggests that cumulatively over 44% of the sample is of the view that it is not easy for new and growing firms to enter new markets. If this is matched with the response to the question regarding the ability to afford entry to the market in Jamaica Figure 43 (Figure 44) then this could New and Growing Firms can Easily Enter New provide a good reason for the Markets difficulties encountered.

Cost of Market Entry

50%

Approximately 59% of the 40% sample (14.7% completely false 30% and 44.1% somewhat false) 20% indicated that new and growing 10% firms cannot afford the cost of market entry in Jamaica (Figure 0% 44). The implication here is that FALSE NEUTRAL TRUE entry barriers may be too high for the industries that show opportunities, such as mining, hotels, telecommunications and medium to large scale agriculture and manufacturing; industries that require very costly start-up assets. High capital expenditure in addition to fundamental start-up costs (registration, licenses, legal fees, etc,) may render the cost of market entry unaffordable for early stage Figure 44 entrepreneurs. This finding New and Growing Firms can Afford the Cost of is significant because it Market Entry opens the discussion regarding financing 60% difficulties and the 50% increasing role that 40% government policies, 30% venture capitalists, and 20% financial institutions may 10% have to play in supporting 0% start–up activities.

FALSE

NEUTRAL

TRUE

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Competitive Barriers Figure 45 suggests that only 2.9% of the respondents were of the opinion that they could enter the market of choice without obstruction from large existing firms. Over forty four percent (44%) of the respondents opined that the statement as written, had some measure of falsehood (20.6% completely false and 23.5% somewhat false). This would suggest that this 44% believe that large established firms do interfere in market entry Figure 45 options. When the 23.5% Perception of Competitive Interference in Market of those with a neutral Entry opinion are noted, then the 29.4 perception and its impact on P 30 23.5 23.5 the rate of entry could be 20.6 e 25 significant. r 20 c e n t

15 10 5 0

2.9 The market openness in Jamaica may further be impacted by other regulatory frameworks and systems. Sixty-three (63%) of the respondents in the NES indicated that anti-trust legislations are not effective Responses and not well enforced in Jamaica (Figure 46). This could be another factor that impacts the climate/opportunity for market entry. This also suggests what could be done to immediately relieve and create opportunities for market entry.

Foreign Direct Investment - An Indicator Foreign Direct Investment (FDI) into Jamaica fell by 26 per cent in 2009 to just over US$1 billion, according to figures released by the United Nations Conference on Trade and Development (UNCTAD) (Richardson, 2010). FDI, normally a positive indicator, shows a decline for 2009, not because Jamaica is not open, but largely because of the impact of the world recession

Figure 46 Anti-Trust Legislation is Effective and Well Enforced

70% 60% 50% 40%

30% 20% 10%

0% FALSE

NEUTRAL

TRUE

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of the period under study. A review of earlier performances suggests that the Jamaican economy has benefitted from reasonably high levels of foreign direct investment over the last couple of years with Jamaica averaging about US $700m between 2003 and 2006 and increasing to US$886m in 2007 (Wehby, 2009). However, the difficulty lies in seeing how the Jamaican economy has used this level of investment to drive its production, productivity and efficiency.

The data would suggest that the investment gets transferred right back out of the economy in payment for supplies to support tourism, repayment for loans and contractual and consultancy fees for example. The challenge remains of using this level of investment to create goods and services for export which will earn foreign exchange and create a stronger international trading presence.

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ENTREPRENURSHIP EDUCATION AND TRAINING There has been remarkable development over the years in entrepreneurship education and training. A number of courses and programs have blossomed and flourished in many universities over the last decade and entrepreneurship programs have been the subject of much study (WeeLong & Venkotopporoo, 2001). Entrepreneurship education and training is therefore becoming a “hot issue” today. Greene & Rice (2007) supported the notion that entrepreneurship education is expanding rapidly around the world with growth being evident in the number of courses, endowed chairs, and programs. They further indicated that business schools have approached their participation in entrepreneurship education and training with a range of pace, practice and policy. Additionally they encouraged that the groundwork be provided for any organized discussion of entrepreneurship education, taking stock of where we are in the field as a means of identifying the big questions, issues and trends that will direct the future of the discipline.

A recent Needs Assessment Survey was administered to potential students, employers and other stakeholders in the business, education and other government sectors. The objective was to determine the feasibility of the establishment of a School of Entrepreneurship at the University of Technology, Jamaica to offer degrees and short professional courses in entrepreneurship and small business development. The overall findings from the data collected revealed that there is a great need for a School of Entrepreneurship to provide high quality entrepreneurship education and training. Findings further imply that Jamaicans are eager for additional training, guidance and counseling in entrepreneurship.

In the GEM Special 2008 Report, “A Global Perspective on Entrepreneurship Education and Training”, questions are raised about which types of entrepreneurship education and training approaches work best. The report pointed out that perhaps the educational context is what should form the basis: whether one is learning in primary, secondary, college or university or nonschool training programmes. The report further indicated that some authors (European Commission, 2008; Walter, Sascha and Dohse, 2009) agree that experiential learning is more effective for developing entrepreneurial skills and attitudes than traditional methods.

Entrepreneurship education and training may need to be much broader when considering what to teach. Stevenson, Howard and Gumpert (1985) suggested that entrepreneurship education and training should impact attitudes, help people recognize opportunities, think creatively, and enable them to build leadership skills and confidence. The European Commission report (2008) further suggested that the goal of entrepreneurship education should be to promote creativity, innovation and self-employment. Another question that surfaced is where to teach entrepreneurship.

Entrepreneurship, according to the GEM 2008 Special Report, is inherently multidisciplinary in nature. The question was raised (European Commission, 2008) whether business schools are the most appropriate place for teaching, given the view that the most innovate and feasible ideas are likely to come from technical and creative discipline. Katz (2003) responded that growth in entrepreneurship education and training is likely to come from outside business schools.

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Kirby (2004) examined the characteristics and role of the entrepreneur and the challenges for business schools posed by the need to develop more enterprising individuals. He argued that the traditional education system stifles rather than develops the requisite attributes and skills to produce entrepreneurs, and proposed that to develop entrepreneurs significant changes are required in the content and process of learning. He further suggested that there should be a shift in the emphasis from educating about entrepreneurship to educating for entrepreneurship. He then went on to emphasize that entrepreneurship should not be compared with new venture creation or small business management, but with creativity and change. With the context presented, Kirby proposed that educational institutions need to change the process of learning, to enable their students to develop their right brain entrepreneurial capabilities as well as their left brain analytical skills.

In the GEM Jamaica 2009 NES, experts were asked whether the vocational, professional and continuing education systems provide good and adequate preparation for starting and growing new firms. Results (Figure 47) revealed that 37% somewhat agreed that the education system in Jamaica at that level, provided good and adequate preparation for starting and growing new firms. However, approximately 45% disagreed with the statement. It was further revealed that only 27 % of experts believed that Colleges and universities provide good and adequate preparation for starting up and growing new firms while 50% expressed their disagreement.

Perhaps this is an indication that the views of experts about education and training as it relates to the provision of good and adequate preparation for starting and growing new firms are not positive and therefore this area needs much attention.

Figure 47: The vocational, professional, and continuing education systems provide good and adequate preparation for starting up and growing new firms

Respondents in the NES were also asked to indicate their views on whether the level of business and management education provide good and adequate preparation for starting up and growing new firms (Figure 48). Thirty-four (34%) of the respondents indicated that the level of business and management education provide good and adequate preparation for starting up and growing new firms while a greater percentage (49%) indicated negatively.

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Figure 48: The level of business and management education provide good and adequate preparation for starting up and growing new firms

According to Peter Anderson, Employersâ€&#x; Spokesperson on General Discussion on Youth Employment at the International Labour Conference (2005), “Employers and their organizations have a central role in the identification (and subsequent design and implementation) of the appropriate education, training and general skills requirements that economies need. Business has a clear interest in ensuring that education and training create the skilled labour force they will need for the future. As key customers of the education and training system, business can help inform policy and practice across a variety of related issuesâ€?.

Additionally, experts were asked whether in Jamaica teaching in primary and secondary education encourages creativity, self-sufficiency, and personal initiative. Figure 49 shows that 67% of experts in Jamaica disagreed with the notion that teaching in primary and secondary education encourages creativity, self sufficiency and personal initiative. Most of the experts (76%) also believe that teaching in primary and secondary education does not provide adequate instruction in market economic principles. Hence, it would suggest that higher education and vocational and other training institutions and interventions might be a solution.

Figure 49: Teaching in primary and secondary education encourages creativity, self-sufficiency and personal initiative

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Mustar (2009) stated that, if one wishes to develop entrepreneurship in young engineers, it is critical to mobilize entrepreneurs and business people to become involved in the educational process. He further purported that in the higher education system, entrepreneurial training has multiplied. Ibrahim & Soufani (2002) highlighted the fact that management training is constantly seen as an effective way of providing small and medium sized enterprises with the management expertise they require so that they may develop and grow. They noted that the SME sector in Canada plays a prominent and critical role in the growth and expansion of the domestic economy through contributions to job creation and domestic output. However, they further stated that the sector suffers from a considerably high failure rate that is largely attributed to the lack of management and planning skills, which will potentially be improved by providing the right kind of training and education in different business areas.

The requirements and challenges of entrepreneurship education and training are profuse; however, there are many opportunities for influencing perceptions and developing the skills and ambitions of current and potential entrepreneurs (GEM Special Report 2009). The GEM research looks at countriesâ€&#x; level of entrepreneurial activities using a number of entrepreneurial framework conditions. One of the primary entrepreneurial framework conditions documented by GEM is the nature and level of entrepreneurship education and training. Based on the GEM model, the importance of entrepreneurship education and training increases as economies develop.

In assessing the entrepreneurial framework conditions (EFCs), an assessment of institutional quality by national experts, most countries reveal that the item concerning education and training in primary and secondary school is one of the three worst performing EFCs. Exceptions were made for Bosnia and Herzegovina, Kingdom of Tonga, Latvia, Denmark and Russia. Jamaica was no exception. Table 12 displays the three Entrepreneurial Framework Conditions that were valued most positive (+) and most negative (-), per country by experts in 2009. The survey shows that post-school education, physical infrastructure, and cultural and social norms were the three most valued EFCs in Jamaica. The three EFCs that were valued most negative were national policy, government programmes, and education at the primary and secondary level.

There has been much research about entrepreneurship education and training in innovation driven economies with results showing that entrepreneurship education has its roots in these economies (Solomon et. al 2002, Katz, 2003). Governments in the innovation driven economies have identified entrepreneurship education as key priority (Kyro, 2006; Sorgman et.al., 2008).

According to Katz (2003), entrepreneurship education has reached maturity in the United States and he further indicated that future expansion lies elsewhere. Entrepreneurship education is still relatively a new practice in higher institutions of some countries that are efficiency and factordriven (Li et.al, 2003). It is seen as an emerging concept and thus has a significant role to play in transitioning entrepreneurial activities from necessity to opportunity based in addition to enhancing innovation and international competitiveness. According to Finweek (2007), in factor-driven countries, training may be offered as part of a social government campaign to improve skills and create jobs. Entrepreneurship education and training is therefore likely to take different forms and shapes than in innovation or efficiency-driven economies.

71

Table 12 — Entrepreneurial Framework Conditions valued most positive (+) and most negative (-), per country 1 Finance

4a Education – prim. & second.

7a Internal Market – dynamics

2a Nat. policy – general policy

4b Education – post-school

7b Internal Market – openness

2b Nat. policy – regulation

5 R&D transfer

8 Physical infrastructure

3 Government programs

1 Factor-driven economies Bosnia & Herz.

Guatemala Jamaica Saudi Arabia Syria Tonga Islands Uganda Venezuela Efficiency-driven economies Argentina Brazil Chile Colombia Croatia Dominican Rep. Ecuador Hungary Latvia Malaysia Panama Peru Russia Serbia South Africa Tunisia Uruguay Innovationdriven economies Belgium Denmark Finland Germany Greece Hong Kong Iceland Israel Italy Netherlands Norway Slovenia South Korea Spain Switzerland Un. Arab Emirates United Kingdom USA

2a

2b

-

-

6 Commercial infrastructure

3

4a

4b

-

-

+ +

+

-

-

+

-

-

-

-

-

-

-

-

-

-

-

+

+ +

+

-

+

-

+

+ -

+ -

+

-

-

+

7b

+ + + + +

+ + + + +

+ + + +

+

-

+ +

-

-

-

+ -

+ + + +

+ +

-

+ + + + + +

-

+ -

+

+ + + +

+ -

+ -

+ + + + + + + +

+

+ + + + + + + + + + + + +

+ + + +

+ +

-

+

+

+

+

-

9

+

+ -

8

+ + + + + +

+

-

-

-

-

+

+ +

-

7a

+ +

+

-

6

+ -

-

+

9 Cultural & social norms

5

+ + + +

+ + +

+ + + + + + + + + + + + + + + + + +

-

+ +

-

+

Source: GEM 2009 NES

72

The GEM global survey revealed that the highest percentage of education within all of the levels of education and training falls within the factor-driven economies (Figure 50).

Figure 50 Percentage of Education by Group between 18-64 years

Source: GEM APS 2009

With Jamaica being a part of this category, implications are that more Figure 51 Highest Level of Education value is placed on education and training at the post-secondary and 53% 60% graduate levels. While less attention is 50% focused on secondary level education 40% within all three types of economies, 30% 17% 17% 20% the efficiency-driven economies were 8.30% 2.80% 10% second in terms of where they place 0% their emphasis on education and training. Their post secondary education and training was seen as more critical for possible development. Within the innovationdriven economies there was a similar trend.

From the 2009 APS results, the highest level of education completed by the Jamaican population is displayed in Figure 51. Fifty three percent (53%) of the respondents completed secondary school with 17% completing primary school only. Approximately 17% of the respondents attended secondary school but did not complete, while approximately 11% have completed a degree.

73

When compared with data in Figure 50, in factor driven economies there is a similar trend in the findings. The highest level of education completed was at the secondary level, while post secondary and graduate education displayed the lowest percentages.

Figure 52 Knowledge and Skills to Start a Business 24%

When asked whether respondents believed that they have the knowledge and skills 76% necessary to start a business (Figure 52), approximately 76% responded that they believed they have the requisite knowledge and skills to start a business, implying that nascent entrepreneurs are not cognizant of the benefits of entrepreneurial training.

Yes No

Training Institutions and Agencies In Jamaicaâ€&#x;s National Industrial Policy (1995) it was indicated that it was necessary for training institutions to place emphasis on skills development and small business management, hence, the establishment of the Jamaica Business Development Corporation (JBDC) in 2000. The objective of this agency is to improve the rate of economic growth and employment through the creation of new micro and small enterprises and the expansion of existing ones. This is being achieved through the offering of business management training and counseling to improve product quality and productivity. To contribute to the improvement of the sector, government intends to undertake a national youth survey as part of a move to design a new national youth policy with the overarching objective of the survey being to obtain data relating to employment and entrepreneurship, education and training, health and wellness, as well as youth interaction with state institutions.

The skill acquisition process in Jamaica is comprised of formal, informal, and non-formal training. The formal training takes place within the school system and is administered by the Ministry of Education. Informal training occurs outside the formal school system. The method of training depends largely on the nature of the activities being pursued. Not many workers within the informal sector undertake formal training nor attend vocational schools. A number of them master their skills through practice on their own, without assistance from external sources or reference to theory. Others learn their skills on the job through apprenticeship training. This type of training is very prevalent in Jamaica and is often referred to as trading. Within this context, a lot of learning takes place within the family and the neighborhood. There are few entrepreneurs who learn skills and are trained in the formal sector and then apply them in self-employment within the informal sector (Atchoarena and McArdle, 1999).

Informal training is also conducted by non-governmental organizations (NGOs) or community groups with the objective of developing knowledge, skills, and attitudes to improve incomes and standard of living. This training is delivered through small business management training and vocational skills development programs. Some programs offer certificate of attendance and age 74

is not a barrier. This type of training is referred to as Community- Based Training (CBT), where the training is taken to the community. The entry requirements and duration is normally more flexible and less structured in comparison to the Technical Vocational Education and Training (TVET) system.

Non-formal training takes place in training institutions and enterprises, called “Institution-Based Training” or “Enterprise/Industry Based Training”. Training of these types is usually structured with specific entry requirements and duration. Under the Human Employment and Resource Training Trust (HEART Trust/NTA), TVET institutions provide non-formal vocational training outside the primary, secondary and tertiary school system.

Informal training and non-formal training are currently provided through a number of agencies.

Some of which are: JAMPRO, JBDC, National Development Foundation of Jamaica, Universities, the Workforce Development Consortium and the HEART Trust/NTA. The HEART Trust/NTA is the national training agency for informal and non-formal training in Jamaica. A recent addition to the training institutions is the School of Entrepreneurship which was recently launched at the University of Technology, Jamaica in response to the urgent need by the government to stimulate growth in the economy. This will undoubtedly add a new dimension to the academic education and training programmes in the College of Business and Management.

The School of Entrepreneurship is housed in the University‟s Technology Innovation Centre which was established in 2002 to provide incubation support services for start-up micro, small and medium enterprises.

For factor-driven economies such as Jamaica, government plays a critical role in entrepreneurial development, and nonetheless, in entrepreneurship education and training. For the past few decades, the government of Jamaica has tried to promote the development of micro and small businesses through the provision of training, financial, and technical assistance. This is done in order to integrate the productive aspect of the sector into the process of national development, hence enhancing the ability to contribute to social inclusion and the conservation of the environment. A number of constraints are faced by these small enterprises, including limited capital, limited skills, and instability in the macro environment. Through a number of initiatives directed mainly through the JBDC, the government is seeking to positively impact the entrepreneurial sector and hence contribute to macro-economic stability.

75

RESEARCH AND DEVELOPMENT TRANSFER AND INTELLECTUAL PROPERTY RIGHTS For analytical convenience institutions such as the IMF and the World Bank often group the small Caribbean islands in the category “Caribbean and Latin America”. For small-island developing states such as Jamaica, however, this categorisation is hardly useful as small Caribbean islands are vastly different from Latin American countries situated in the relatively vast South American mainland. Indeed, the structure of these small states contributes to their vulnerabilities on several fronts such as food insecurity, environmental fragility, smallness of size, susceptibility to natural disasters, and remoteness (Briguglio, 1995).2 It would have been interesting to compare Jamaica with other small-island developing states in the English-speaking Caribbean. However, Jamaica happens to be the only Caribbean country participating in GEM. This section examines research and development (R&D) transfer, commercial and services infrastructure, physical infrastructure and intellectual property rights for 2009. The bulk of the data for the section was obtained from the NES 2009. The results point to several weaknesses in critical areas needed to support entrepreneurial activities and momentum in the Jamaican economy. It is significant that 2009 marked a severe recession in the global economy severely affecting the island.

Research and Development Transfer R&D is a critical dynamic for fuelling innovation, competitiveness and economic growth. More attention needs to be focused on national policies relating to „R&D transfer‟. Eighty-one percent (or 29 out of 36) of the experts interviewed disagreed that „new technology, science and other knowledge‟ have been efficiently transferred from universities and public research centers to new and growing firms. Indeed, 75% (or 27 out of 36) of the experts interviewed denied that there is good support available for engineers and scientists to have their ideas commercialized through new and growing firms. Table 13 indicates the same sentiments relating to other aspects of R& D transfer. The vast majority of the experts (89%, or 32 out of 36) asserted that new and growing firms cannot afford the latest technology. They strongly denied that there were adequate government subsidies for new and growing firms to acquire new technology. Half of all experts

2

FAO (2005, 1) classified 40 of its member nations as SIDS, thirty-eight of which belong to the Alliance of SmallIsland States (AOSIS), a negotiating body within the UN. Five of the 40 SIDS do not satisfy the generally accepted definition of a small state as one with a population of less that 1.5 million (see Commonwealth Secretariat, 1998).

These small states vary in terms of their respective levels of development. For example, Bahamas and Seychelles are relatively rich countries, while Haiti and Sao Tome and Principe are very poor (ibid. 9). According to the Commonwealth Secretariat (1998), nineteen SIDS are classified as being among the twenty-five most vulnerable states among 110 developing countries.

76

interviewed disagreed that the science and technology base efficiently supported the creation of world-class new technology-based ventures in at least one area.

Table 13 Responses of Experts: R&D Transfer RESPONSES OF EXPERTS Completely False

Somewhat False

Neither True nor false

Somewhat True

Completely True

No.

%

No.

%

No.

%

No.

%

No.

%

5

14

8

22

14

39

6

17

3

8

New technology, science, and other knowledge are efficiently transferred from universities and public research 9 centers to NGFs

25

16

44

5

14

3

8

0

0

13

36

16

44

3

8

3

8

0

0

22

61

10

28

4

11

0

0

0

0

16

44

14

39

4

11

2

6

0

0

The science and technology base efficiently supports the creation of world-class new technology-based ventures in at least one area

8

22

10

28

8

22

5

14

2

6

There is good support available for engineers and scientists to have their ideas commercialized through NGFs

14

39

13

36

4

11

2

6

0

0

Science parks and business incubators provide effective support for new and growing firms.

NGFs have just as much access to new research and technology as large, established firms.

NGFs can afford the latest technology There are adequate government subsidies for NGFs to acquire new technology.

77

Technological readiness is a critical factor for new and emergent businesses. Their productivity and performance hinge in no small manner on their ability to access new technologies and adapt older technologies to suit their entrepreneurial endeavours. The state of technological readiness of an economy is strongly related to the level of its information and communications technology (ICT) and new and growing firms can adopt these technologies in order to move forward (Aghion and Howitt, 1992; Barro and Sala-i-Martin, (2003).3 Innovation is another critical variable for firms and the science and technology base of economies should be geared to support the creation of new technologies. In a fast-paced technological world innovation is critical (Romer, 1990; Grossman and Helpman, 1991).

The World Economic Forum (2010) reported that Jamaica scored particularly low in “Capacity for Innovation” (a rank of 103/133) and “Availability of scientists and engineers” (117/133).

However, the island registered above average rankings in “Availability of latest technologies” (46/133), “Quality of scientific research institutions” (51/133) and “University-Industry collaboration in R&D” (60/133) (Table 14).

Table 14 Global Competitiveness Indicator: Technological Readiness INDICATORS

RANK/133

Availability of latest technologies

46

FDI and technology transfer

74

Capacity for innovation

103

Quality of scientific research institutions

51

Company spending on R & D

77

University-Industry collaboration in R & D

60

Availability of scientists and engineers

117

Utility patents

42

Source: World Economic Forum, 2010. The Global Competiveness Report, 2009-2010, pp.180-181. Geneva: World Economic Forum.

Several Science, Technology and Innovation (STI) agencies facilitated, to varying degrees, the use and transfer of technology and the dissemination of scientific expertise. Jamaica ranked 53 out of 134 countries in the Network Readiness Index of the Global Information Technology 3

According to Trajtenberg (2005) a general purpose technology is one which contributes to general economic growth because of its intrinsic capability to transform production methods across a broad range of industries.

78

Report 2008/09 (PIOJ, 2009, p.4.7). PIOJ (2009) further reported that, “The thrust towards Jamaica becoming a technology enabled society … using science, technology and innovation (STI) as a catalyst for sustainable prosperity continued, despite the impact of the global recession on the local economy” (PIOJ, 2009, p.4.1). In 2009 the Information and Communications Technology (ICT) sector expanded its technological infrastructure and boosted e-services across industries. Although STI financing in 2009/10 was 7.2% less than that of 2008/9, the allocation to the Ministry of Agriculture (MOA) and Fisheries more than doubled (from $48m to $105m) during this period, reflecting a “drive towards agricultural expansion … to facilitate capacity building, enhanced agricultural productivity, greater use of green house technology and assessment of the regulatory framework for agricultural insurance” (ibid., p.4.3). To this end, in 2009 the MOA established the Centre for Excellence for Advanced Technology in Agriculture (CEATA) to boost R&D in this sector.

Intellectual Property Rights The applications for patents are indicators of research, technological advancements and innovativeness. During 2009, applications for patents declined from 136 to 126 (or by 7.4%) over the previous year (PIOJ, 2010, 4.10) (Figure 53). An entrepreneur is motivated if there are government regulations that will protect his patents, copyrights and trademarks. Only 31% of our experts believed that it is widely recognised that the rights of inventors should be protected (Table 15). An equal proportion of experts disagreed that the Intellectual Property Rights (IPRs) legislation is comprehensive, while only 19% (n=36) believed that the IPR legislation is efficiently enforced. Only 22% of the experts felt that new and growing firms can trust that their IPRs will be respected. In fact, an overwhelming majority of experts (81% or 29) believed that there were extensive illegal sales of pirated software, videos, CDs and other copyrighted or trademarked products.

Figure 53 Applications and Granting of Patents in Jamaica: 2004-09

79

Table 15 National Experts Survey: Intellectual Property Rights RESPONSES OF EXPERTS Completely False

Somewhat False

Neither True nor false

Somewhat True

Completely True

No.

%

No.

%

No.

%

No.

%

No. %

The Intellectual Property Rights (IPR) legislation is comprehensive

-

-

1

3

10

28

12

33

4

11

The Intellectual Property Rights (IPR) legislation is efficiently enforced

4

11

12

33

9

25

6

17

1

3

The illegal sales of ’pirated’ software, videos, CDs, and other copyrighted or trademarked products is not extensive

17

47

12

33

3

8

1

3

1

3

New and growing firms can trust that their patents, copyrights, and trademarks will be respected

5

14

11

31

9

25

6

17

2

6

3

8

12

33

6

17

8

22

3

8

It is widely recognized that inventors’ rights for their inventions should be respected

80

COMMERCIAL, SERVICES AND PHYSICAL INFRASTRUCTURE The state of the commercial and services infrastructure is critical to promoting entrepreneurship in a country, especially a small-island developing state such as Jamaica. A well-developed physical, commercial and services infrastructure is a significant facilitator of entrepreneurial activities (Sala-i-Martin and Subramanian, 2003). A solid institutional environment has become even more evident given the multifaceted challenges confronting national economies on account of the 2008-09 global economic crisis. The NES incorporated five specific questions relating to the commercial and services infrastructure (Table 16).

Table 16 Commercial and Services Infrastructure RESPONSES OF EXPERTS Completely False

Somewhat False

Neither True nor false

Somewhat True

No.

No.

No.

%

No.

%

%

%

Completely True

No.

%

There are enough subcontractors, suppliers, and consultants to support new and growing firms.

2

6

6

17

8

22

12

33

4

11

New and growing firms can afford the cost of using subcontractors, suppliers, and consultants.

10

28

13

36

9

25

2

6

1

3

It is easy for new and growing firms to get good subcontractors, suppliers, and consultants.

6

17

12

33

7

19

10

28

0

0

It is easy for new and growing firms to get good, professional legal and accounting services.

6

17

10

28

3

8

15

42

1

3

6

17

8

22

6

17

11

31

3

8

It is easy for new and growing firms to get good banking services (checking accounts, foreign exchange transactions, letters of credit, and the like).

81

Although only 22% (8 out of 36) of the experts denied that the supply of subcontractors, suppliers and consultants was adequate, most of them (64%, or 23 out of 36) did not believe that new and growing firms can afford the cost of these personnel. Hence, only 28% (or 10 out of 36) agreed that it was easy to get good subcontractors, suppliers and consultants. Less than 50% agreed that it was easy to get good, professional, legal, accounting and banking services (checking accounts, foreign exchange transactions, letters of credit, etc.).

New and growing firms depend on basic utilities such as water, electricity and sewage disposal networks in order for businesses to operate efficiently and without hindrance. Additionally, a strong and solid telecommunications network facilitate the speedy and uninterrupted flow of data and information thereby promoting overall business efficiency by ensuring that businesses communicate and access all available pertinent information (Kaufmann and Vishwanath 2001).

Merely 39% (14 of 36) of the experts concurred that the physical infrastructure (roads, utilities, communications, waste disposal) provides good support for new and growing firms. One of the favourable aspects of the Jamaican business environment is access to information and communication technologies over the past few years.

This was highlighted in the 2008 Jamaica GEM Report and the responses of the experts further corroborated it in this year‟s report. Indeed, in a comparison with 132 other countries conducted by the World Economic Forum (2009), Jamaica scored above average rankings in “Quality of overall infrastructure”, “Quality of roads”, “Internet users”, and “Broadband internet subscribers” (Table 17).

Table 17 Global Competitiveness Indicators: Infrastructure

INDICATORS

RANK/133

Quality of overall infrastructure

55

Quality of roads

63

Quality of electricity supply

85

Internet users

27

Personal computers

75

Broadband internet subscribers

65

Source: World Economic Forum (2010). The Global Competiveness Report

An overwhelming majority of experts attested that a new and growing firm can get good access to communications (telephone, internet, etc.) within a week and 35 experts claimed that new and growing firms can afford these services. However, only 36% of the experts attested that these 82

firms can afford the cost of basic utilities (gas, water, electricity and sewer) although 72% claimed that these firms can get good access to these utilities (Table 18).

Table 18 National Experts Survey: Physical Infrastructure

RESPONSES OF EXPERTS Completely False

Somewhat False

Neither True nor false

Somewhat True

Completely True

No.

%

No.

%

No.

%

No.

%

No.

%

The physical infrastructure (roads, utilities, communications, and waste disposal) provides good support for new and growing firms.

4

11

7

19

10

28

12

33

2

6

It is not too expensive for a new or growing firm to get good access to communications (phone, Internet, etc.).

0

0

7

19

4

11

16

44

9

25

A new or growing firm can get good access to communications (telephone, internet, etc.) in about a week.

1

3

2

6

2

6

24

67

6

17

3

8

12

33

7

19

10

28

3

8

1

3

5

14

3

8

15

42

11

31

New and growing firms can afford the cost of basic utilities (gas, water, electricity, and sewer).

New or growing firms can get good access to utilities (gas, water, electricity, and sewer) in about a month.

83

ENTREPRENEURIAL CULTURE The measures of entrepreneurial culture are varied but for this study we will seek to examine the relationship between culture and entrepreneurship and the impact of this relationship. The entrepreneurial culture also needs to be examined from the perspective of the country‟s heritage, but this will not be covered in this study.

There are many studies which seek to examine the relationship between culture and entrepreneurship and in a recent study the writer noted that these studies generally are concentrated around three streams.

“The first research stream focuses on the impact of national culture on the aggregate measures of entrepreneurship such as national innovative output or new businesses created. The second stream addresses the association between national culture and the characteristics of individual entrepreneurs. Within this stream of literature, researchers have examined the values, beliefs, motivations, and cognitions of entrepreneurs across cultures. The third stream explores the impact of national culture on corporate entrepreneurship.” (Zahra, 2002)

Impacting Culture An entrepreneurial culture may be identified by a number of factors which may include the following:       

growth in concentration of firms growth in networks and linkages higher levels of education, skills and learning growth in intermediary organizations to whom tasks are delegated growth in new forms of entrepreneurship strong infrastructural development strong institutional support

The culture is responsible for technological innovations as well as economic growth and needs to be examined for its practical value as well as economic value. But what is the impact of the national culture?

The factors that enhance an entrepreneurial culture are both individual/personal as well as cultural/national. The individual factors of religion and politics may have as much impact as government policies and changes. As examples, reduction in tax rates and tax policies particularly for corporate taxes could result in an increase in entrepreneurial activity. The overall impact could be affected by the attitudes of the population towards business and money-making generally as well as towards risk, prestige and income generation. In addition family tradition, family links, educational attainment and business experience of individuals also impact their role as entrepreneurs. It will also affect the motives for start up of businesses and how businesses are financed. It is a combination of these elements interacting in such a way that make entrepreneurship a function of national culture.

84

Table 5, provides the details of indicators of entrepreneurial culture according to country classifications of factor driven, efficiency driven and innovation driven economies.

Benefits of an Entrepreneurial Culture What are the benefits of a strong entrepreneurial culture to a country? The answer to this question lies not only in obvious economic terms , but also in the areas of matters important to the ordinary citizen. These include the basics of a clean and safe environment with an effective performing business sector. Therefore, governments will want to support an entrepreneurial culture because though many of the small firms will not survive – being mere experiments - it is from amongst the mass of experiments that a transforming firm is going to emerge with the potential to change a nationâ€&#x;s economy.

Further research is required to ground the study of entrepreneurial culture and to further examine the relationship between culture and entrepreneurship. This culture-entrepreneurship relationship needs to be examined with a look at the strength of any relationship as well as the direction of the relationship and taking into account various variables which may affect both, for example, political, technological, environmental and economic factors and the temporal implications of each period. In addition, specific areas of study need to be done applying the standards of Hoftstedeâ€&#x;s variables to Jamaica.

85

RECOMMENDATIONS 1. Gender differences should to be considered when developing entrepreneurship policies and programmes, bearing in mind that most Jamaican households are headed by women. More entrepreneurial programmes directed toward females, particularly at the community level, will contribute to poverty alleviation and social inclusion.

2

Greater emphasis needs to be placed on the long term sustainability of start-ups, business growth, and reducing business discontinuation. Early-stage entrepreneurs should be nurtured and guided to grow their businesses into viable entities that provide jobs, increase exports, and contribute significantly to economic development.

3. Rural parishes continue to lag behind their urban counterparts in entrepreneurial activity.

More attention and resources need to be channeled into the rural parishes to stimulate enterprise development.

4. The gap between demand and supply in micro financing needs to be closed. A long term microfinancing strategy needs to be developed for the promotion of micro enterprises. This strategy should be directed toward poverty alleviation and should include all parishes in rural Jamaica.

5. Research and Development geared toward business creation needs to be increased, particularly at the tertiary level of the educational system. Colleges and universities need to develop strategies to commercialize their inventions and innovations.

86

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APPENDICES Appendix 1 List of Experts by Entrepreneurial Framework Conditions (EFCs) EFC 1: Financial Support Mr. Maurice Facey: Pan Jamaica Investments Trust Limited Mrs. Sonia Roach-Taylor: Micro Enterprise Financing Ltd. Mrs. Rita Humphries Lewin: Barita Investments Limited Mr. Dennis Gray: Canadian Imperial Bank of Commerce Ltd. EFC 2: Government Policies Mr. Ralston Hyman: The Sunday Herald Mr. Orlin Weise: Ministry of Finance and the Public Services Ms. Suzette Hudson: Jamaica Trade and Invest Professor Trevor Munroe: University of the West Indies, Mona EFC 3: Government Programmes Dr. Wesley Hughes: Planning Institute of Jamaica Mrs. Valerie Veira: Jamaica Business Development Corporation Mrs. Beverley Rose-Forbes: Ministry of Industry, Investment & Commerce Mr. Waldon Wright: Churches Cooperative Credit Union Ltd. EFC4: Education and Training Dr. William Lawrence: University of the West Indies, Mona Mrs. Janeen McNish: University of Technology, Jamaica Mr. Courtney Walker: Morris Entrepreneurship Centre Mr. Courtney Garrick: University of Technology, Jamaica EFC5: Research and Development Transfer Professor Ronald Young: University of the West Indies, Mona Mrs. Andrea Golding: Cashmere International Ltd. Mr. Ceretsie Campbell: University of Technology, Jamaica Mrs. Louise Marcelle-Peart: Private Consultant EFC 6: Commercial and Professional/ Legal Infrastructure Mrs. Judith Ramlogan-Chung: Companies Office of Jamaica Mr. Donovan Perkins: Pan Caribbean Merchant Bank Ms. Nicole Foga: Foga, Daley & Company Mr. Tarun Handa: KPMG, Peat Marwick

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EFC 7: Market Openness Mrs. Pamela McLean: National Export Import (EXIM) Bank of Jamaica Mrs. Nadine Haughton-White: Brand Warriors Mr. Ivor Bennett: Technology Innovation Centre Mr. Olusegun Asif Ismail: Koci Jamaica Ltd. EFC 8: Access to Physical Infrastructure Mrs. Nadine Chambers-Goss: Say It Right Mr. Xesus Johnston: LIME Jamaica Mr. Keith Summers: Reliant Enterprise Communications Mr. Horace Bennett: COPE EFC 9: Cultural and Social Norms Dr. Heather Little-White: Heather Little-White & Associates Ms. Mauguerite Orane: Growth Facilitators Mr. Oliver Clarke: The Gleaner Company Ltd. Mr. Neil Miller: National Housing Trust

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Appendix 2 Persons Who Conducted NES Interviews Mrs. Vanetta Skeete Mrs. Marcia McPherson-Edwards Dr. Claudette Williams-Myers Ms. Patrice Farquharson Mr. Errol Gregory Dr. Horace Williams

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