Gem jamaica 2010 report

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GLOBAL ENTREPRENEURSHIP MONITOR 2010 JAMAICA REPORT

Girjanauth Boodraj Vanetta Skeete Mauvalyn Bowen Orville Reid

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EXECUTIVE SUMMARY Main characteristics of entrepreneurial activity Total early-stage entrepreneurship (TEA) in Jamaica for 2010 was 10.54% down from 22.7% in 2009. Nascent entrepreneurs accounted for almost half of the TEA (5.03%) while the other half (5.51%) represented new businesses. The proportion of males (51%) engaged in entrepreneurial activity was not much different from that of females (49%). The established business ownership rate (EBO) was 7.91%, suggesting that almost eight in every hundred adults owned an ‘established business’. There are equal proportions of males and females reporting ownership of established businesses.

Nearly half of all Jamaicans (47%) believe that there are good opportunities for starting a business in “the next six months”. The majority of established business owners as well as earlystage entrepreneurs believe that owning a business will result in greater independence. The motives for starting businesses were mostly necessity-driven: 71% for established businesses and 50% in the TEA category. Purely opportunity-driven entrepreneurship was much less pronounced: 23% in the former category and 40% in the latter.

The retail trade, hotels and restaurants (63% - TEA; 44% - EBO) emerged as the type of entrepreneurial activity that was most prevalent. Agriculture, forestry and fishing (14% - TEA; 29% - EBO) ranked second among all business sectors.

Entrepreneurial activity and the economic crisis The impact of the global recession was manifested in the TEA and EB rates which dropped to half of what was recorded in 2009. In fact, the majority of the respondents (74% -TEA; 81% EBO) were of the opinion that compared to 2009, it was more difficult to start a new business in 2010. Similar sentiments were expressed with regard to prospects for growing businesses compared to one year ago (59% -TEA; 66% - EBO). Most early-stage entrepreneurs (61%) and most established entrepreneurs (83%) revealed that there was no market expansion in 2010.

Despite the effects of the global recession, however, only 8.36% had discontinued a business in the past 12 months

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GEM in action More and more researchers have used GEM findings as evidenced in academic and policy discussions. GEM publications continue to have inroads in policy arenas. There has been an increasing impact of GEM data in the major tertiary institutions in Jamaica influenced partially by a wider circulation of the GEM national reports. GEM data is used in various publications, cited by tertiary students up to the PhD level, and debated by policy makers in diverse ministries of government. International conferences hosted locally often devote significant time in presenting, debating and discussing GEM findings in panel discussions. In September 2010, a new School of Entrepreneurship was established in the University of Technology, Jamaica (UTech), and the GEM Project is now directed and managed through this School.

International agencies such as Panos Caribbean and Panos London are supportive of GEM Jamaica, and at least one regional University has expressed interest in collaborating with UTech in GEM research. Since 2005, Jamaica has been the only English speaking Caribbean country participating in GEM. Over the past year, however, two other Caribbean countries (Trinidad & Tobago, and Barbados) have joined the GEM Consortium. Collaborative research is now being explored among these countries.

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TABLE OF CONTENTS

GLOBAL ENTREPRENEURSHIP MONITOR .............................................................................................1 2010 JAMAICA REPORT ......................................................................................................................1 EXECUTIVE SUMMARY .......................................................................................................................2 LIST OF TABLES ..................................................................................................................................6 LIST OF FIGURES.................................................................................................................................7 ACKNOWLEDGMENT ..........................................................................................................................9 INTRODUCTION ...............................................................................................................................10 What is the GEM? ................................................................................................................................... 10 The GEM Conceptual Model ................................................................................................................... 10 Data Collection ........................................................................................................................................ 15 Survey Design and Sample Characteristics: GEM Jamaica ...................................................................... 16 ENTREPRENEURSHIP IN JAMAICA: FINDINGS FROM THE APS .............................................................18 Perceived Opportunities and Capabilities............................................................................................... 18 Fear of Failure ......................................................................................................................................... 23 Perceptions about Entrepreneurship ..................................................................................................... 23 Entrepreneurial Intentions...................................................................................................................... 24 Total Early-Stage Entrepreneurship Activity (TEA) ................................................................................. 25 Opportunity and Necessity Entrepreneurship ........................................................................................ 32 TEA by Parish........................................................................................................................................... 35 Nascent and New Entrepreneurs ............................................................................................................ 35 Established Business Ownership (EBO)................................................................................................... 37 HIGH-GROWTH ENTREPRENEURSHIP ................................................................................................38 Growth Intentions and Expectations ...................................................................................................... 38

5 Growth Aspirations ................................................................................................................................. 42 International Expansion .......................................................................................................................... 46 Support for High-growth Businesses ...................................................................................................... 48 EDUCATION AND TRAINING .............................................................................................................54 CULTURAL AND SOCIAL NORMS .......................................................................................................59 Cultural Anomaly .................................................................................................................................... 61 Traditional vs New Means of Wealth Acquisition ................................................................................... 64 Cultural and Social Norms as a Fostering and Constraining Factor ........................................................ 65 RECOMMENDATIONS.......................................................................................................................66 REFERENCES ....................................................................................................................................67

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LIST OF TABLES Table 1: GEM countries classified by economy and geography ................................................................. 12 Table 2: Glossary of main measures and terminology................................................................................ 14 Table 3: Sample distribution by parish by rural/urban stratification ........................................................ 17 Table 4: Entrepreneurial attitudes and perceptions in the GEM countries in 2010 by phase of economic development ............................................................................................................................................... 19 Table 5: Entrepreneurial activity in the 59 GEM countries in 2009, by phase of economic development27 Table 6: TEA by parish ................................................................................................................................. 35 Table 7: Nascent entrepreneurs by parish ................................................................................................. 36 Table 8: New firms by parish...................................................................................................................... 36 Table 9: Established business ownership by parish ................................................................................... 37 Table 10: Good opportunities for starting a business................................................................................ 44 Table 11: Difficulty in growing a business .................................................................................................. 46

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LIST OF FIGURES Figure 1: The GEM conceptual model ......................................................................................................... 11 Figure 2: Characteristics of economic groups and key development focus .............................................. 13 Figure 3: The entrepreneurship process and GEM operational definitions ............................................... 13 Figure 4: Jamaica: Perceived opportunities and capabilities: 2010 ............................................................ 22 Figure 5: Selected entrepreneurial attitudes and perceptions: Jamaica: 2008-2010................................ 22 Figure 6: Total early-stage entrepreneurial activity (TEA) for 59 economies in 2010, by phase of economic development, showing 95 percent confidence intervals ........................................................... 26 Figure 7: Total early-stage entrepreneurial activity rates and per capita GDP 2010 ................................. 30 Figure 8: TEA rates for Jamaica 2005-2010................................................................................................. 31 Figure 9: Opportunity to start businesses: TEA and established businesses .............................................. 31 Figure 10: Difficulty levels in starting businesses: TEA and EB .................................................................. 32 Figure 11: Difficulty levels in growing businesses: TEA and EB .................................................................. 33 Figure 12: Percentage of males and females in TEA .................................................................................. 33 Figure 13: TEA-necessity and opportunity: 2008-10.................................................................................. 34 Figure 14: Motives for starting nascent, new and established businesses ............................................... 34 Figure 15: Persons employed in TEA and established businesses .............................................................. 39 Figure 16: Expected number of jobs to be created in the next five years ................................................. 40 Figure 17: TEA: Expectations for growth................................................................................................... 41 Figure 18: Job-Growth expectations for early-stage entrepreneurship activity: 2008-2010 ..................... 42 Figure 19: Starting and managing a high-growth business ........................................................................ 43 Figure 20: Skills and competence to support high growth firms ............................................................... 43 Figure 21: The existence of good opportunities for the creation of new firms ......................................... 44 Figure 22: The existence of good opportunities to create high-growth firms............................................ 45 Figure 23: TEA: Difficulty in starting a business ......................................................................................... 45

8 Figure 24: TEA- Export intensity.................................................................................................................. 47 Figure 25: Export intensity of established businesses ............................................................................... 47 Figure 26: Experimentation with new technologies ................................................................................... 48 Figure 27: High priority for policy at the national government level ........................................................ 49 Figure 28: Support initiatives for high-growth entrepreneurial activity..................................................... 50 Figure 29: Importance of high-growth entrepreneurial activity................................................................. 50 Figure 30: Selection criterion for entrepreneurship support ..................................................................... 51 Figure 31: Selection of recipients for government programmes ............................................................... 51 Figure 32: Teaching in primary and secondary education encourages creativity, self-sufficiency and personal initiative ....................................................................................................................................... 55 Figure 33: Teaching in primary and secondary education provides adequate attention to entrepreneurship and new firm creation ................................................................................................... 56 Figure 34: In my country, the national culture is highly supportive of individual success achieved through own personal efforts ................................................................................................................................... 60 Figure 35: In my country, the national culture emphasizes self-sufficiency, autonomy, and personal initiative ...................................................................................................................................................... 60 Figure 36: In my country, the national culture emphasizes the responsibility that the individual (rather than the collective) has in managing his or her own life ............................................................................ 61 Figure 37: In my country, the national culture encourages entrepreneurial risk-taking ........................... 62 Figure 38: In my country, the national culture encourages creativity and innovativeness........................ 62 Figure 39: Do all, some, or none of your potential customers consider this product or service new and unfamiliar? .................................................................................................................................................. 63 Figure 40: How long have the technologies or procedures required for this product or service been available? .................................................................................................................................................... 63 Figure 41: What proportion of your customers normally live outside the country? ................................. 64

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ACKNOWLEDGMENT GEM Jamaica has benefitted tremendously from several individuals and institutions in the execution of the NES and APS Surveys and the production of the 2010 Jamaica Report.

Specifically, the GEM Team acknowledges the contribution of: •

The College of Business and Management for being the major sponsor of GEM Jamaica for 2010

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The School of Graduate Studies, Research and Entrepreneurship (SGSRE) for continued substantial sponsorship over the years

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All staff of the College of Business and Management who contributed towards the NES and other aspects of GEM-related activities

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Participants of the National Experts Survey who gave generously of their time and expertise

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Participants of the Adult Population Survey

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Dr. Mauvalyn Bowen, former Head, Joan Duncan School of Entrepreneurship, Ethics and Leadership (JDSEEL) for continued support and meticulous guidance of the GEM Project.

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Patrice Farquharson for providing administrative support to the Project.

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Dr. Claudette Williams-Myers, Associate Dean, COBAM, for providing much-needed support, encouragement and guidance at all times.

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Chris Aylett, GEM Administrative Manager, for continuous and expert support and guidance on all GEM related matters

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KOCI MARKET RESEARCH AND DATA MINING SERVICES for conducting the APS to the satisfaction of GEM standards.

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INTRODUCTION What is the GEM? The Global Entrepreneurship Monitor (GEM) is the world’s leading research consortium dedicated to understanding the relationship between entrepreneurship and national economic development. GEM views entrepreneurship basically as a process encompassing various phases from an intention to starting a business, to actually starting the business, to running a new business, to running an established business, and even to discontinue running a business (2010 GEM Global Report, p.13).

Its main aim is to examine, inform and influence entrepreneurship policy (Klyver, 2008). GEM is a not-for-profit academic research consortium which hosts the world’s largest and longest study of global entrepreneurial activity. Originally conceptualized as a multinational research programme in 1999, GEM is now in its twelfth year and has been conducting annual surveys in several countries across the globe to capture data on the attitudes, aspirations and activities of individuals to determine individual participation in venture creation. This differs from most other data sets which provide firm-level data. Nearly 175,000 persons from 59 countries were surveyed in 2010. Fifty-four countries participated in GEM 2009. Initially, only ten developed countries participated and over the years the number grew to include 80 countries, both developed and developing, from all across the globe. The contribution of GEM since its inception has been unique. No other study has emerged which provides cross-country data on various facets of entrepreneurship and entrepreneurial activities globally. The global GEM executive report was published in January 2010 and can be viewed at www.gemconsortium. org. The University of Technology, Jamaica, is now participating for the sixth time and its annual reports are available at http://www:gemconsortium.org.

The GEM Conceptual Model The GEM conceptual model is diagrammatically represented in Figure 1. Its main aims are as follows: •To measure differences in the level of entrepreneurial activity between countries.

•To discover factors determining the levels of entrepreneurial activity.

•To recommend policies that may enhance the level of entrepreneurial activity.

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Figure 1: The GEM conceptual 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)

The World Economic Forum’s Global Competitiveness Report 2009-2010 categorized countries into three stages of economic development: factor-driven, efficiency- driven and innovationdriven. It identified twelve pillars of competitiveness such as institutions, infrastructure, technological readiness and innovation. GEM 2009 and 2010 Global Reports adopted this grouping and placed Jamaica among factor-driven economies. This marked a downward shift on the entrepreneurial ladder as the island was categorized among efficiency-driven economies in 2008. Factor-driven countries rely heavily on natural resources and labour and are dominated by extractive industries and subsistence agriculture. The efficiency-driven phase witnesses increased industrialization and a boost in economies of scale, with capital-intensive. In this phase there is a significant growth in capital-intensity accompanied by an emergence of large organizations. Finally, the innovation-driven phase, is characterized by the growth of the service

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sector and an expansion of knowledge intensive productive industries (GEM Annual report, 2010, p.7).

GEM further groups countries into six geographic regions: Sub-Saharan Africa, the Middle East and North Africa (MENA)/South Asia, Latin America and the Caribbean, Eastern Europe, Asia/Pacific and the United States and Western Europe. Using these groups it is possible to compare countries across similar phases of development and geographic settings. The economic and geographic groupings are shown in Table 1.

Table 1: GEM countries classified by economy and geography

Factor-Driven

Efficiency-Driven

Sub-Saharan Africa

Angola, Ghana, Uganda, Zambia

South Africa

Middle East/ North Africa

Egypt, Iran, Pakistan, Saudi Arabia, West Bank and Gaza

Tunisia

Jamaica, Guatemala, Bolivia

Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, Mexico, Peru, Trinidad and Tobago, Uruguay

Latin America and Caribbean

Eastern Europe

Asia Pacific

Vanuatu

Innovation-Driven

Israel

Bosnia and Herzegovina, Croatia, Hungary, Latvia, Macedonia, Montenegro, Romania, Russia, Turkey

Slovenia

Malaysia, China, Taiwan

Australia, Japan, Republic of Korea Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom, United States

United States and Western Europe

Source: GEM 2010 Global Report, p.8.

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Figure 2 delineates the characteristics of the economic groupings and the main development focus of each group, while Figure 3 summarizes the entrepreneurship process, depicting different categories of entrepreneurs such as nascent entrepreneurs and owner-managers of new and established businesses. A glossary of the main measures and terminologies used is given in Table 2.

Figure 2: Characteristics of economic groups and key development focus

Source: GEM 2010 Global Report, p.14

Figure 3: The entrepreneurship process and GEM operational definitions

Source: GEM 2010 Global Report, p. 13.

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Table 2: Glossary of main measures and terminology Measure

Description

Entrepreneurial Attitudes and Perceptions Perceived Opportunities

Percentage of 18–64 age group who see good opportunities to start a firm in the area where they live

Perceived Capabilities

Percentage of 18–64 age group who believe to have the required skills and knowledge to start a business

Entrepreneurial Intention

Percentage of 18–64 age group (individuals involved in any stage of entrepreneurial activity excluded) who intend to start a business within three years

Fear of Failure Rate

Percentage of 18–64 age group with positive perceived opportunities who indicate that fear of failure would prevent them from setting up a business

Entrepreneurship as Desirable Career Choice

Percentage of 18–64 age group who agree with the statement that in their country, most people consider starting a business as a desirable career choice

High-Status Successful Entrepreneurship

Percentage of 18–64 age group who agree with the statement that in their country, successful entrepreneurs receive high status

Media Attention for Entrepreneurship

Percentage of 18–64 age group who agree with the statement that in their country, they will often see stories in the public media about successful new businesses

Entrepreneurial Activity Nascent Entrepreneurship Rate

Percentage of 18–64 age group who are currently a nascent entrepreneur, i.e., actively involved in setting up a business they will own or co-own; this business has not paid salaries, wages or any other payments to the owners for more than three months

New Business Ownership Rate

Percentage of 18–64 age group who are currently an owner-manager of a new business, i.e., owning and managing a running business that has paid salaries, wages or any other payments to the owners for more than three months, but not more than 42 months

Total Early-Stage Entrepreneurial Activity (TEA)

Percentage of 18–64 age group who are either a nascent entrepreneur or owner-manager of a new business (as defined above)

Established Business Ownership Rate

Percentage of 18–64 age group who are currently owner-manager of an established business, i.e., owning and managing a running business that has paid salaries, wages or any other payments to the owners for more than 42 months

Business Discontinuation Rate

Percentage of 18–64 age group 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. Note: This is not a measure of business failure rates.

Necessity-Driven Entrepreneurial Activity: Relative Prevalence

Percentage of those involved in total early-stage entrepreneurial activity (as defined above) who are involved in entrepreneurship because they had no other option for work

Improvement-Driven

Percentage of those involved in total early-stage entrepreneurial activity (as defined

15 Opportunity Entrepreneurial Activity: Relative Prevalence

above) who (i) claim to be driven by opportunity, as opposed to finding no other option for work; and (ii) who indicate the main driver for being involved in this opportunity is being independent or increasing their income, rather than just maintaining their income

Entrepreneurial Aspirations High-Growth Expectation Early-Stage Entrepreneurial Activity: Relative Prevalence

Percentage of total early-stage entrepreneurs (as defined above) who expect to employ at least 20 employees five years from now

New Product-Market Oriented Early-Stage Entrepreneurial Activity: Relative Prevalence

Percentage of total early-stage entrepreneurs (as defined above) who indicate that their product or service is new to at least some customers and indicate that not many businesses offer the same product or service

Weak measure: expects at least five employees five years from now

Weak measure: product is new or not many businesses offer the same product or service International Orientation Entrepreneurial Activity

Percentage of total early-stage entrepreneurs (as defined above) with more than 25% of the customers coming from other countries Weak measure: more than 1% customers coming from other countries

Source: GEM 2010 Global Report, pp.63-64.

Data Collection Based on the conceptual model displayed in Figure 1, GEM’s foremost activity has been the establishment of a huge data set and the creation of a variety of harmonized measures of several aspects of entrepreneurship. The two major instruments of data collection are the ‘Adult Population Survey’ (APS) and the National Experts Survey (NES).

The Adult Population Survey An APS of at least 2000 adults is conducted in each participating country each year to collect data on entrepreneurial activities, intentions and aspirations. The APS is the same for all counties hence allowing for harmonization and comparability of findings across countries.

The National Experts Survey Each participating country has the option of conducting an NES involving at least 36 experts.

The experts are selected based on several entrepreneurial framework conditions and based on their experience, employment post and reputation. The instrument comprises mostly Likertscale items and a few open-ended questions eliciting responses on factors constraining and fostering entrepreneurial activities, women’s support to start up, high growth, social image and innovation. The GEM Jamaica 2005 Report cited the main framework conditions as follows::

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o Government Policies: the extent to which regional and national government policies in terms of taxes, government regulations and administration discourage or encourage new and growing firms. o Government Programmes: the presence, accessibility and quality of direct programmes to assist new and growing firms at all levels of government – national, regional and municipal. o Financial Support: the availability, accessibility and quality of financial resources for new and growing firms, including grants and subsidies, equity, seed and debt capital. o Education & Training: the extent and quality of training in starting or managing small, new or growing businesses in the educational and training system at all levels – from primary school to postgraduate courses. o R & D Transfer: the extent to which national research and development leads to new commercial opportunities, and whether or not R&D is available for new, small, and growing firms. o Commercial & Professional/Legal Infrastructure: the availability, accessibility, quality and cost of commercial, accounting, and other legal services, institutions and general sources of information that allow or promote new, small, or growing businesses. o Market Openness: the extent to which commercial trading arrangements are stable and difficult to change, thus preventing new and growing firms from competing with and replacing existing suppliers, subcontractors, and consultants. o Commercial & Professional/Legal Infrastructure: the availability, accessibility, quality and cost of commercial, accounting, and other legal services, institutions and general sources of information that allow or promote new, small, or growing business. o Market Openness: the extent to which commercial trading arrangements are stable and difficult to change, thus preventing new and growing firms from competing with and replacing existing suppliers, subcontractors, and consultants. o Access to Physical Infrastructure: the accessibility and quality of physical resources such as communication, transportation, space, rent and natural resources for new and growing firms. o Cultural & Social Norms: the extent to which existing social and cultural norms encourage individuals to try new ways of conducting business or economic activities (GEM Jamaica 2005 Report , p.31).

Survey Design and Sample Characteristics: GEM Jamaica The APS for 2010 comprised 2,287 adults ranging from 18 to 64 years and was conducted between August 20 and September 10, 2010, by a contracted vendor. A sample size of at least 2000 was designed but 2,287 were achieved. The APS was devised to reflect the majority of the characteristics of the voting age population of Jamaica based on the 2001 Population Census.

This sample was configured to be representative of all Jamaicans 18 to 64 years of age who reside permanently in the country and live in private dwellings. The sample excluded persons who live in institution-type residences such as the army camp, school dormitories and guest

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houses. Face-to-face interviews were conducted and trained interviewers made a maximum of five call backs to dwellings. One adult per dwelling was interviewed and the interviewee was selected based on the ‘next birthday rule’. Table 3 shows the distribution of the sample of households.

The data collected was sent to the GEM coordination team where it was checked and feedback forwarded to the vendor. When all data quality requirements were met, the data was harmonized and entered in a single file comprising all participating countries.

Table 3: Sample distribution by parish by rural/urban stratification

Adult Population Survey of 18 - 64 Year Cohort 2010 Parish

Urban

Rural

Parish Total

Percentage

Kingston

70

0

70

3.06

St. Andrew

409

45

454

19.85

St. Thomas

29

79

108

4.72

Portland

14

82

96

4.20

St. Mary

15

123

138

6.03

St. Ann

40

94

134

5.86

Trelawny

18

70

88

3.85

St. James

74

56

130

5.68

Hanover

17

48

65

2.84

Westmoreland

37

112

149

6.52

St. Elizabeth

19

127

146

6.38

Manchester

56

94

150

6.56

18

Clarendon

52

120

172

7.52

St. Catherine

291

96

387

16.92

TOTAL

1141

1146

2287

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ENTREPRENEURSHIP IN JAMAICA: FINDINGS FROM THE APS It is true that persons are motivated in various ways to start businesses. Some persons have no options to work and may engage in entrepreneurship out of necessity (called necessity entrepreneurship). On the other hand, other individuals become entrepreneurial in order to earn additional income or to become more independent (labelled opportunity entrepreneurship). Additionally, GEM gauges the aspirations of entrepreneurs. These aspirations may involve the creation of new and innovative products, the launch of high-growth industries with much potential for employment creation, or an intention to export products internationally (2010 GEM Global Report, p.13). GEM also examines attitudes and perceptions relating to entrepreneurship in a country. Entrepreneurs should be ready to take risks and to have positive beliefs about the entrepreneurial climate. Indeed, favourable perceptions about entrepreneurial endeavours may go a far way to encouraging business start ups.

Perceived Opportunities and Capabilities Persons may start businesses because they recognize particular entrepreneurial opportunities.

Such persons may have no prior intentions to start a business. On the other hand individuals may decide to start a venture and begin to seek relevant information. Entrepreneurial pursuits are oftentimes partly determined by individuals’ perceptions of opportunities for starting a business in their neighbourhood. Based on their perceived capabilities as entrepreneurs, the economic, political, social and cultural environment may influence the quality of their perceived opportunities. Hence, different persons perceive opportunities differently. Again, the policy environment can impact people’s attitudes towards perceiving opportunities and hence government programmes and policies can directly be aimed at enhancing people’s perceptions about opportunities and capabilities. The GEM global 2010 findings showed that citizens in factor-driven economies exhibited higher perceptions of opportunities and capabilities to start businesses compared to individuals in other economies (see Table 4).

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Table 4: Entrepreneurial attitudes and perceptions in the GEM countries in 2010 by phase of economic development Perceived Opportunitie s

Perceived Capabilitie s

Fear of Failure *

Entrepreneurshi p as a Food Career Choice

High Status to Successful Entrepreneur s

Media Attention for Entrepreneurshi p

Entrepreneurial Intention s **

Angola

67.3

73.1

32.2

70.1

83.3

74.7

54.5

Bolivia

53.2

75.8

28.4

62.9

66.6

51.1

49.3

Egypt

38.8

63.4

25.3

77.7

89.5

70.5

24.3

Ghana

75.7

74.6

10.4

91.1

90.7

78.6

68.8

Guatemala

62.9

71.0

23.2

73.8

59.7

44.1

30.7

Iran

41.6

65.7

30.1

63.6

84.6

62.3

31.4

Jamaica

56.1

80.2

33.0

85.1

84.8

77.4

38.1

Pakistan

51.9

56.2

34.3

76.3

80.7

61.0

32.4

Saudi Arabia

75.8

69.3

39.0

86.8

92.3

78.0

1.0

Uganda

80.5

86.7

20.7

81.1

87.3

81.9

77.1

Vanuatu

73.6

79.6

46.9

55.6

77.6

34.3

50.5

West Bank and Gaza Strip

44.0

57.0

40.0

85.3

83.5

62.5

28.2

Zambia

81.4

77.5

12.8

69.9

71.8

72.5

67.1

61.8

71.5

28.9

75.3

80.9

65.3

42.6

Argentina

50.3

63.5

21.3

74.3

67.1

61.7

21.0

Bosnia and Herzegovina

38.3

62.5

27.4

76.0

63.0

47.6

16.8

Brazil

48.1

57.9

33.2

78.0

79.0

81.1

26.5

Chile

65.0

65.6

22.1

87.4

71.2

45.7

38.3

China

36.2

42.3

32.0

70.0

76.9

77.0

26.9

Colombia

68.2

65.1

27.7

88.6

75.9

66.7

41.3

Costa Rica

46.4

68.8

36.0

64.3

63.4

60.8

13.2

Croatia

23.3

53.2

31.2

67.1

49.9

41.8

7.4

Ecuador

50.3

76.6

31.2

83.1

74.0

62.6

46.3

Factor-Driven Economies

average (unweighted) Efficiency-Driven Economies

20 Hungary

33.3

43.4

42.4

55.0

73.7

47.4

13.8

Latvia

29.1

50.7

39.9

58.8

64.8

57.2

21.4

Macedonia

34.3

59.7

30.9

71.3

66.2

56.0

26.7

Malaysia

40.1

24.3

45.3

55.7

68.6

88.0

5.1

Mexico

55.6

64.6

33.4

69.4

62.8

54.0

22.3

Montenegro

36.1

70.9

30.4

81.0

68.4

69.5

31.9

Peru

71.4

76.5

34.0

82.0

76.8

81.2

39.6

Romania

17.5

38.2

41.1

66.5

65.5

46.9

8.6

Russia

21.7

22.7

41.7

65.4

63.7

46.6

2.6

South Africa

40.9

44.3

29.0

77.5

77.6

78.6

16.7

Taiwan

29.6

26.4

43.8

68.4

57.5

78.2

25.1

Trinidad and Tobago

69.1

82.8

11.6

83.2

77.6

67.2

30.4

Tunisia

37.6

53.1

23.2

89.1

92.7

78.4

24.1

Turkey

36.1

54.2

25.0

71.2

76.4

61.7

19.4

Uruguay

52.1

73.3

27.7

64.8

61.8

43.3

31.8

42.9

55.9

31.7

72.8

69.8

62.5

23.2

Australia

45.7

53.2

35.8

57.0

68.4

70.5

8.7

Belgium

39.6

44.9

35.1

60.0

51.2

45.7

8.2

Denmark

46.4

40.7

31.5

Finland

51.1

39.5

28.6

46.1

86.5

71.4

5.9

France

33.9

37.3

40.5

65.2

67.9

44.7

14.2

Germany

28.5

41.6

33.7

53.1

77.1

49.0

6.4

Greece

15.9

52.2

50.9

65.6

70.2

34.5

12.8

Iceland

48.7

49.0

33.7

51.2

60.9

66.6

15.7

Ireland

22.5

49.2

33.4

51.8

81.5

61.1

6.1

Israel

35.2

41.6

46.0

61.3

73.0

56.3

14.1

Italy

24.7

42.4

36.8

69.1

69.3

37.7

4.0

Japan

5.9

13.7

32.6

28.4

52.0

58.5

2.9

average (unweighted) Innovation-Driven Economies

5.9

21 Republic of Korea

13.0

29.0

32.5

67.6

71.3

61.4

10.1

Netherlands

44.8

45.5

23.8

85.4

68.6

60.9

5.5

Norway

49.8

40.4

26.6

57.8

70.7

67.2

7.6

Portugal

20.3

52.1

29.7

67.5

70.5

52.6

8.8

Slovenia

26.8

56.3

27.5

53.2

73.7

56.2

8.7

Spain

18.8

50.2

36.4

65.4

62.5

40.7

5.8

Sweden

66.1

42.4

28.9

56.9

71.6

60.8

8.5

Switzerland

33.3

43.9

27.0

64.9

76.4

50.6

6.7

United Kingdom

29.2

51.8

30.3

51.0

76.7

52.2

5.1

United States

34.8

59.5

26.7

65.4

75.9

67.8

7.7

33.4

44.4

33.1

59.2

70.3

55.5

8.2

average (unweighted)

Source: GEM Global Report, 2010, pp.17-18.

The Jamaica 2010 APS data corroborates the GEM global data showing relatively high perceived opportunities (56%) and capabilities (80%) for persons 18-64 years starting a firm in the area where they live over the last three years. This was higher than the average perceived capabilities for factor-driven economies which recorded 72%. Adults in efficiency-driven and innovation driven economies saw themselves as being less capable to start businesses – only 56% of adults in efficiency-driven economies and even a lower proportion in innovation-driven countries (44%) believed that they have the required skills and knowledge to start a business (Figure 4).

Figure 5 further illustrates that in 2008, 52% of the adult population in Jamaica perceived opportunities for starting a business. It fell to about 40% in 2009 and climbed to 56% in 2010.

The effects of the global economic recession on Jamaica most likely influenced the relatively low perceptions in 2009. Interestingly, the perceived capabilities of Jamaicans rose in 2010 to 80%.

22

Figure 4: Jamaica: Perceived opportunities and capabilities: 2010

Figure 5: Selected entrepreneurial attitudes and perceptions: Jamaica: 2008-2010

23

Fear of Failure Individuals who are risk-averse tend to hold back even if they have a high perception of opportunities for starting businesses. The entrepreneurial spirit and fear of failure do not go well together. We presume that the lower the fear of failure of businesses the higher will be the rate of new business start-ups and new venture creation. Figure 5 highlights that in 2008, 26% of adults in the 18–64 age group with positive perceived opportunities indicated that fear of failure would prevent them from setting up a business. In 2009 it declined 24% but grew to 33% in 2010, somewhat higher than the average of all factor-driven countries which stood at 28.9%.

Innovation- driven countries exhibited the highest aggregated average (33.1%), followed by efficiency-driven economies (31.7%).

On the issue of entrepreneurial risk taking, analysis of the APS data suggest that the view of the experts is not shared by the general adult population as the majority (68%) of APS respondents said fear of failure would not stop them from starting a new business, suggesting that they are willing to take the risk to start business.

Perceptions about Entrepreneurship The extent of status people bestows on entrepreneurs and the degree of attractiveness of the entrepreneurial pursuit influence entrepreneurial undertakings. The 2010 GEM Global Report put it concisely: Media can also reinforce notions about entrepreneurs: for example, magazines or television shows that highlight entrepreneurs, or newspaper stories about the achievements of such individuals. Entrepreneurs as heroes (or otherwise), and their stories of success (or failure), can shape a society’s impressions markedly.

Policy makers may even take specific actions to highlight entrepreneurs and shape cultural perceptions (p.21).

The favourable perceptions of Jamaicans towards entrepreneurship are among the highest in the world. Between 2008 and 2010 the proportion of Jamaicans who perceived entrepreneurship as a good career choice increased from 81% to 85%. The average for adults in factor-driven countries who viewed entrepreneurship as a good career choice was only 75%.

The average for efficiency-driven economies was 73%, while for innovation-driven economies it recorded only 59%.

In terms of media attention around entrepreneurship, the amount in Jamaica also expanded from 71% in 2008 to 77% in 2010. Factor-driven economies as a group averaged 65%,

24

efficiency-driven states averaged 63% while innovation-driven economies recorded an average of 56%.

Jamaicans hold in high regard personal achievement obtained by own initiative. Individuals who achieve wealth by fair means are respected and honoured in Jamaica. The NES showed that 90% of respondents revealed that in Jamaica successful entrepreneurs have a high level of status and respect, 92% said you will often see stories in the public media about successful entrepreneurs, 81% said most people think of entrepreneurs as competent resourceful individuals. This view is also supported by respondents in the APS: sixty-five percent (65%) agreed that “you will often see stories in the public media about successful businesses” and 80% said persons successful in starting a new business have a high level of status and respect.

Entrepreneurial Intentions GEM defines ‘entrepreneurial intention’ as the percentage of the 18–64 age group (excluding individuals involved in any stage of entrepreneurial activity) who intend to start a business within three years. People with positive perceptions about entrepreneurship may still have low intentions to start a business as exemplified in the Eastern European countries which recorded below average intentions for efficiency-driven economies (2010 Global Report, p.21). This contrasted with the findings in the Jamaican case where positive perceptions about entrepreneurship corresponded with high intentions for being an entrepreneur. The Jamaican data revealed that the percentage of adults with entrepreneurial intentions more than doubled between 2008 and 2010, moving from 17% to 38%, respectively. In fact, a high proportion of persons in factor-driven economies expressed intentions for starting businesses over the next three years (43%). Only 23% of adults in efficiency-driven states expressed such intention while far fewer did so in the innovation-driven economies (8%).

The increase in entrepreneurial intentions cited above may be due to the declining state of the economy. The Statistical Institute of Jamaica reported that the Jamaican economy declined by approximately 1.2 percent in 2010. In that year, the manufacturing industry declined by about 2.6 percent while the goods and services industries contracted by 1.7 per cent and 1.5 per cent, respectively (See ESSJ, p.xii). Moreover, in 2010, the labour force declined by 1.6 per cent and the labour force participation rate contracted by 1.1 percentage to 62.4 per cent. The contraction of the economy had a depressing impact on the unemployment rate which increased by 1.0 percentage to reach 12.4 per cent. The employed labour force contracted by 2.7 per cent. Additionally, youth (14 –24 years) unemployment moved from 27% in 2009, to 31 percent in 2010 (the highest rate since 2002), while adult (25 years and over) unemployment was 10% in 2010 compared to 9 per cent in 2009 (ibid., p. 21.2).

25

Total Early-Stage Entrepreneurship Activity (TEA) One of the pivotal measures of entrepreneurship by GEM is called Total Early-Stage Entrepreneurship Activity (TEA). The TEA is the percentage of individuals in the working age group who are actively involved in starting up businesses. It is the summation of the proportion of nascent entrepreneurs, and owner-managers of new firms. GEM defines a nascent entrepreneur as an individual 18–64 years who is actively involved in setting up a business as the owner or co-owner provided that the business has not paid salaries, wages, or any other payments to the owners for more than three months. On the other hand, the owner-manager of a new business is someone between 18-64 years who currently owns and manages an active business that has paid salaries, wages or any other payments to the owners for more than three months, but not more than 42 months. 1 The TEA rates for the 59 countries that participated in GEM 2010 are exhibited in Figure 6. The rates are shown in three categories of levels of development and are depicted in ascending order for each category. The average TEA rate for factor-driven states (23%) is much higher than that for efficiency-driven countries (12%) and innovation-driven economies (5.6%)(See Table 5 ).

1

Refer to Table 2, pg. 15.

26

Figure 6: Total early-stage entrepreneurial activity (TEA) for 59 economies in 2010, by phase of economic development, showing 95 percent confidence intervals

Source: GEM 2010 Global Report, pg. 24.

27

Table 5: Entrepreneurial activity in the 59 GEM countries in 2009, by phase of economic development

Nascent Entrepreneur -ship Rate

New Business Ownership Rate

Total EarlyStage Entrepreneur ship Activity (TEA)

Established Business Ownership Rate

Discontinuation of Businesses

NecessityDriven (% of TEA)

Improveme nt-Driven Opportunit y (% of TEA)

Factor-Driven Economies Angola

13.6

19.1

32.4

8.6

19.9

36

30

Bolivia

28.8

14.0

38.6

18.2

9.0

17

57

Egypt

2.1

4.9

7.0

4.5

3.8

53

25

Ghana

10.7

24.6

33.9

35.5

25.7

37

35

Guatemala

8.3

8.4

16.3

6.6

3.9

15

28

Iran

4.8

7.8

12.4

12.2

7.3

38

39

Jamaica

5.5

5.1

10.5

6.9

8.1

42

39

Pakistan

6.6

2.7

9.1

4.7

2.6

41

39

Saudi Arabia

5.9

3.5

9.4

3.9

3.8

10

75

Uganda

10.6

22.0

31.3

27.7

27.4

50

34

Vanuatu

31.2

28.2

52.2

23.2

22.0

38

24

7.9

2.6

10.4

2.0

5.7

32

33

17.3

17.1

32.6

9.6

23.5

32

41

11.8

12.3

22.8

12.6

12.5

34

38

Argentina

7.0

7.4

14.2

12.4

3.8

36

43

Bosnia and Herzegovina

4.1

4.1

7.7

6.6

4.7

47

30

Brazil

5.8

11.8

17.5

15.3

5.3

31

46

Chile

11.1

6.1

16.8

6.0

5.6

29

53

China

4.6

10.0

14.4

13.8

5.6

42

34

Colombia

8.6

12.7

20.6

12.2

5.1

40

41

Costa Rica

10.4

3.6

13.5

4.8

2.0

32

38

West Bank and Gaza Strip Zambia average (unweighted) Efficiency-Driven Economies

28 Croatia

3.8

1.9

5.5

2.9

4.5

32

49

Ecuador

10.4

11.5

21.3

14.7

7.2

28

45

Hungary

4.6

2.6

7.1

5.4

2.9

20

43

Latvia

5.6

4.2

9.7

7.6

4.2

27

51

Macedonia

4.4

3.6

8.0

7.6

3.7

59

23

Malaysia

1.4

3.6

5.0

7.9

1.9

12

41

Mexico

8.6

2.0

10.5

0.4

5.9

19

42

Montenegro

12.0

3.1

14.9

7.8

7.3

37

38

Peru

22.1

6.0

27.2

7.2

9.2

21

47

Romania

3.3

1.1

4.3

2.1

2.6

31

47

Russia

2.1

1.9

3.9

2.8

0.8

32

30

South Africa

5.1

3.9

8.9

2.1

4.8

36

31

Taiwan

4.7

3.8

8.4

7.2

3.7

30

48

Trinidad and Tobago

8.9

6.4

15.1

8.5

2.9

14

47

Tunisia

1.7

4.4

6.1

9.0

4.1

24

48

Turkey

3.7

5.1

8.6

10.7

4.6

37

47

Uruguay

7.8

4.1

11.7

7.2

3.5

26

54

6.7

5.2

11.7

7.6

4.4

31

42

Australia

3.9

4.0

7.8

8.5

2.7

19

59

Belgium

2.3

1.4

3.7

2.7

2.0

10

54

Denmark

1.8

2.2

3.8

5.6

1.7

8

54

Finland

2.4

3.4

5.7

9.4

1.8

18

54

France

3.7

2.3

5.8

2.4

2.5

25

56

Germany

2.5

1.8

4.2

5.7

1.5

26

48

Greece

2.0

3.5

5.5

14.8

3.4

28

39

Iceland

7.4

3.3

10.6

7.4

3.4

7

68

Ireland

4.4

2.6

6.8

8.6

2.3

31

33

Israel

3.2

2.6

5.7

3.1

3.8

29

54

Italy

1.3

1.0

2.3

3.7

1.6

13

55

average (unweighted) Innovation-Driven Economies

29 Japan

1.5

1.8

3.3

7.4

1.5

36

47

Republic of Korea

1.8

4.8

6.6

11.2

1.6

39

49

Netherlands

4.0

3.4

7.2

9.0

1.4

8

64

Norway

4.4

3.4

7.7

6.7

2.6

15

74

Portugal

1.8

2.8

4.5

5.4

2.6

22

52

Slovenia

2.2

2.4

4.7

4.9

1.6

16

54

Spain

2.2

2.1

4.3

7.7

1.9

25

42

Sweden

2.3

2.6

4.9

6.4

2.9

13

72

Switzerland

2.0

3.1

5.0

8.7

2.4

14

60

United Kingdom

3.2

3.3

6.4

6.4

1.8

11

43

United States

4.8

2.8

7.6

7.7

3.8

28

51

3.0

2.8

5.6

7.0

2.3

20

54

average (unweighted)

Source: GEM Global Report, pp. 22-23 Figure 7 plots the TEA rates against GDP per capita, with adjustment for purchasing power parity. Necessity-driven entrepreneurship as a proportion of TEA tends to be much higher in less developed states as shown by the trend line. A fundamental reason for this trend is the marked difference between necessity-based and opportunity-based entrepreneurship. A necessity-based entrepreneur is an adult 18-64 years involved in total early-stage entrepreneurial activity because of no other option for work. On the other hand, an opportunity-based entrepreneur is involved in total early-stage entrepreneurial activity but claims to be driven by an opportunity to be more independent or to increase income levels, rather than just maintaining incomes.

30

Figure 7: Total early-stage entrepreneurial activity rates and per capita GDP 2010

Source: GEM 2010 Global Report, pg. 27.

TEA rates for Jamaica since 2005 are depicted in Figure 8, while Figure 9 demonstrates that not only did the TEA rate spiked in 2009 (23%) but also the established business ownership rate increased from 9% in 2008 to 16% in 2009. Sixty four percent of Jamaican business owners claimed that the global economic recession which surfaced in 2008 had some impact or a large impact on business activities. In 2010, however, TEA rates plummeted by more than 50% to its lowest ever recorded level (11%). GEM data further revealed that 65% of Jamaican nascent and new business owners claimed that there were ‘somewhat less opportunity’ or ‘less opportunities’ to start a business in 2010, compared to 2009. Only 26% of entrepreneurs in the TEA category admitted that there were ‘more opportunities’ or ‘somewhat more opportunities’ in this regard.

31

Figure 8: TEA rates for Jamaica 2005-2010

Figure 9: Opportunity to start businesses: TEA and established businesses

32

Again, seventy-four percent of new and nascent business owners felt that it is ‘more difficult’ or ‘somewhat more difficult’ to start a business in 2010 compared to 2009 (Figure 10). Only 7% of them stated that it is either ‘less difficult’ or ‘somewhat less difficult’ to do so. The result did not differ much in the case of established businesses: 80% cited difficulties, while only 5% believed it was less difficult or somewhat less difficult.

Figure 10: Difficulty levels in starting businesses: TEA and EB

Figure 11 indicates a similar position in terms of growing a business in 2010 as against ‘one year earlier’. The majority of business owners in the TEA category (59%) stated that it is either ‘more difficult’ or ‘somewhat more difficult’ to grow a business in 2010 compared to 2009.

Merely 21% stated that it is ‘less difficult’ or ‘somewhat less difficult’ in this regard. The result was even more pronounced for established business owners: 66% revealed difficulties, while only 12% said it was less difficult.

Opportunity and Necessity Entrepreneurship An important technique for distinguishing among various forms of entrepreneurial activities is the degree to which an activity is linked to necessity or opportunity. The ratio of males to females in TEA is nearly one to one (see Figure 12). Opportunity-based tea is much higher in males (59%) as against females (41%). This contrasted with necessity TEA where the situation is reversed: opportunity TEA for males is 42%, while that for females is 58%.

33

Figure 11: Difficulty levels in growing businesses: TEA and EB

Figure 12: Percentage of males and females in TEA

Moreover, there has been a steady decline in opportunity TEA over the years 2008-10: from 48% in 2008 to 39% in 2010 (see Figure 13). Necessity TEA also showed a similar decline from 51% in 2008 to 42% in 2010. These results are in conformity to generally declining TEA levels over these years. A relatively high percentage of nascent entrepreneurs (52%) believed that a purely opportunity motive inspired their decision to start businesses (see Figure 14). However, only 29% of new business entrepreneurs expressed that motive while the rate was even lower for established businesses. This situation was reversed in the case of the ‘necessity motive’ for

34

being entrepreneurial: 33% in the nascent category, 64% for new firms, and as much as 70% in the established business category, was recorded.

Figure 13: TEA-necessity and opportunity: 2008-10

Figure 14: Motives for starting nascent, new and established businesses

35

TEA by Parish Table 6 displays the TEA rates according to Parishes in Jamaica. St. Mary displayed the highest TEA rate (25%), outshining the national average of 10.5%. Clarendon stood second (18%), followed by Westmoreland (13%) and St. Elizabeth (13%). At the other extreme were Trelawny (1%) and St.Thomas (4%), displaying significantly low levels of entrepreneurial activities.

Table 6: TEA by parish TEA by Parish Parish Kingston St. Andrew St. Thomas Portland St. Mary St. Ann Trelawny St. James Hanover Westmoreland St. Elizabeth Manchester Clarendon St. Catherine TOTAL

No 66 408 104 90 104 125 87 120 63 129 127 139 141 343 2046

Yes 4 46 4 6 34 9 1 10 2 20 19 11 31 44 241

Parish Total 70 454 108 96 138 134 88 130 65 149 146 150 172 387 2287

% TEA 5.71 10.13 3.70 6.25 24.64 6.72 1.14 7.69 3.08 13.42 13.01 7.33 18.02 11.37 10.54

Nascent and New Entrepreneurs The nascent entrepreneurship rate for the various Parishes are displayed in Table 7. St Catherine (9%) had the highest rate, followed by St. Andrew (6.4%), Portland (6.3%), and Clarendon (5.8%). St. Mary (21.01%) recorded the highest number of households who owned and managed businesses that have paid wages or salaries for more than three months but less than 42 months. Clarendon (12.21%), St. Elizabeth (10.96%), and Westmoreland (10.74%) also reported noteworthy participation of new firms (Table 8).

36

Table 7: Nascent entrepreneurs by parish

Nascent Entrepreneurs by Parish Parish Kingston St. Andrew St. Thomas Portland St. Mary St. Ann Trelawny St. James Hanover Westmoreland St. Elizabeth Manchester Clarendon St. Catherine TOTAL

No 68 425 105 90 133 131 87 125 63 145 143 143 162 352 2172

Yes 2 29 3 6 5 3 1 5 2 4 3 7 10 35 115

Parish Total

%

70 454 108 96 138 134 88 130 65

2.9 6.4 2.8 6.3 3.6 2.2 1.1 3.8 3.1

149 146 150 172 387 2287

2.7 2.1 4.7 5.8 9.0 5.0

Table 8: New firms by parish

New Firms by Parish Parish Kingston St. Andrew St. Thomas Portland St. Mary St. Ann Trelawny St. James Hanover Westmoreland St. Elizabeth Manchester Clarendon St. Catherine TOTAL

No

Yes

Parish Total

%

68 436 107 96 109 127 88 125 65 133 130 146 151 377 2158

2 18 1 0 29 7 0 5 0 16 16 4 21 10 129*

70 454 108 96 138 134 88 130 65 149 146 150 172 387 2287

2.86 3.96 0.93 0 21.01 5.22 0 3.85 0 10.74 10.96 2.67 12.21 2.58 5.64

37

Established Business Ownership (EBO) Table 9 shows that the established business ownership rate was approximately 8%. There was an equal proportion of males to females. Similar to the TEA rate, St. Mary reported the highest percentage of EBO (35.51%), followed by Clarendon (22.67%) and St. Elizabeth (11.64%), as displayed in Table 9.

Table 9: Established business ownership by parish

Established Business Ownership by Parish Parish Kingston St. Andrew St. Thomas Portland St. Mary St. Ann Trelawny St. James Hanover Westmoreland St. Elizabeth Manchester Clarendon St. Catherine TOTAL

No

Yes

Parish Total

69 437 108 96 89 126 88 118 63 137 129 144 133 369

1 17 0 0 49 8 0 12 2 12 17 6 39 18

70 454 108 96 138 134 88 130 65 149 146 150 172 387

2106

181

2287

% EBO 1.43 3.74 0 0 35.51 5.97 0 9.23 3.08 8.05 11.64 4 22.67 4.65 7.91

38

HIGH-GROWTH ENTREPRENEURSHIP It is widely recognized that there is a positive correlation between the creation of new firms and job creation. The greater the number of new firms, the greater the number of jobs created.

The job creation objective of entrepreneurship may also be met through high-growth businesses. Entrepreneurial activity, therefore, should not only be focused on the creation of new businesses, but equally important, on the creation of businesses that expect to grow and display growth potential.

Growth Intentions and Expectations GEM assesses firm growth by the expected increase in the number of employees of a business over time. The growth potential of businesses, therefore, is portrayed by the number of persons currently in its employ and by the number of employees it is expected to have in the future. On the basis of the GEM parameters, therefore, the size of the business is indicated by the number of persons in its employ. An increase in the number of employees within a certain range and over a particular period of time indicates growth in the size of entrepreneurial businesses. This measure, however, is not reflective of the actual growth of the business as growth may be measured by other parameters. It is based on expectations rather than what has been realized.

GEM classifies business owners who expect an increase of more than 20 employees within a five-year period as high-growth businesses. The Adult Population Survey (APS) provides data on the number of persons currently employed in early stage businesses (TEA) and established businesses (EB). Data is also provided on the job expectations for both categories of businesses within a five year period. Figure 15 displays the number of persons currently employed in early stage businesses (TEA) and those employed in established businesses (EB). For early stage businesses, 35% have no employees; 56.2% have 1 to 5 employees; 3.3% have 6 to 19 employees; and 0.7% have over 20 employees. For the established businesses, 44.6% have no employees; 51.4% have 1 to 5 employees; 3.4% have 6 to 19 employees; and 0.6% have over 20 employees (Figure 15).

39

Figure 15: Persons employed in TEA and established businesses

The APS also solicited the views of owner/managers regarding growth expectations in terms of the expected number of jobs to be created in five years time (Figure 16). For early stage businesses, 25.2% of respondents expect no jobs to be created; 54.6% expect 1 to 5 jobs; 13.5% expect 6 to 19 jobs; and only 6.7% expect over 20 jobs. For established businesses, 35.9% of respondents expect no jobs; 48.3% expect 1 to 5 jobs; 12.4% expect 6 to 19 jobs; and a mere 3.4% expect over 20 jobs.

40

Figure 16: Expected number of jobs to be created in the next five years

The growth expectations for early stage businesses are low. More than half (59%) of respondents in this category had low expectations for business growth when compared to the previous year. Twenty-one percent had high expectations, while the remaining 20% had similar expectations (Figure 17).

41

Figure 17: TEA: Expectations for growth

Figure 18 shows the growth expectations with respect to number of jobs for the 59 GEM countries in the 2010 sample. In the factor-driven economies, Jamaica is ranked in the bottom three countries in terms of its expectation for businesses to create 5-19 jobs within five years’ time. It is also ranked in the bottom 5 countries with expectations to create more than 20 jobs over the next 5 years. It can, therefore, be concluded that the job creation potential of early stage businesses in Jamaica is low, with more than half of these businesses expecting to create only between 1 and 5 jobs within the next five years. The growth prospects for established businesses are even lower, with more than 80% of the sample expecting no new jobs or just under 5 jobs being created within 5 years.

42

Figure 18: Job-Growth expectations for early-stage entrepreneurship activity: 2008-2010

Growth Aspirations Jamaicans, to a large extent, embrace the entrepreneurial spirit, as revealed by the APS results.

The majority of Jamaicans (79%) believe that starting a business is a good career choice and 76% are of the view that they have the knowledge and skills to start a business. However, on the question of the ability of entrepreneurs to start businesses and to support high-growth businesses, the respondents in the National Experts Survey (NES) had differing views.

With regard to the knowledge and skills required to start a business, only 30% of experts believe that many persons know how to start and manage a small business. An overwhelming majority (91%) of experts do not believe that many people know how to start and manage a high-growth business (Figure 19). The experts’ views on the skills and competence to support high-growth firms were more positive. Approximately 45% of the experts believed that persons involved in entrepreneurship have the skills and competence to support high-growth firms (Figure 20).

43

Figure 19: Starting and managing a high-growth business

Figure 20: Skills and competence to support high growth firms

44

It may be concluded that the growth intentions and aspirations of early-stage entrepreneurs appear to be lower than those of entrepreneurs who have been in business for some time. It is also clear that those entrepreneurs who have been in business for some time portray greater capabilities to support high growth firms. On the question of the availability of opportunities for business start-ups, the APS revealed that 46.8% of respondents perceive that there are good opportunities to start a business within the next six months (Table 10). The NES also explored the potential for truly high growth businesses. Sixty-one percent of experts were of the view that there are plenty of good opportunities for the creation of new firms (Figure 21). However, when asked if there are good opportunities for the creation of truly high-growth firms, only 26% of the experts supported this view (Figure 22).

Table 10: Good opportunities for starting a business

Responses

Percentage

No

36.29

Yes

46.83

Don’t Know

16.57

Refused

0.31

Figure 21: The existence of good opportunities for the creation of new firms

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Despite the existence of opportunities to start businesses, early stage entrepreneurs believe that it has been getting more difficult to get a business started. Approximately 74% of respondents believed that it was more difficult to start a business ‘now’ than during ‘the previous year’; 19% believed that it was equally difficult while only 7.4% were of the view that it was less difficult (Figure 23).

Figure 22: The existence of good opportunities to create high-growth firms

Figure 23: TEA: Difficulty in starting a business

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When asked about the difficulty encountered in growing a business now compared to one year ago, 59% of early stage businesses felt that it was more difficult, 20% believed that it was equally difficult, while 21% were of the view that it was less difficult (Table 11). For the established businesses, 65.7% believed that it was more difficult, 22.9% were of the view that it was equally difficult, while 11.4% felt that it was less difficult to grow a business when compared to the previous year.

Table 11: Difficulty in growing a business

Responses

TEA (%)

EB (%)

More Difficult

59.2

65.7

About the same

19.9

22.9

Less Difficult

20.9

11.4

International Expansion It is important that early- stage entrepreneurs adopt an international mind-set from the onset, thus shifting their focus in the long or short term from local markets to international market expansion. The extent or degree to which entrepreneurial firms are involved in export activities is referred to as export intensity and is measured in percentage terms. Figure 24 displays the export intensity of early stage businesses. The sample suggests that only 9.3% of early-stage businesses are involved in export activity above 75%. It further reveals that 12.6% of these businesses are involved in export activity between 26% to 75%; 37.7% are involved up to 25%, while 40.5% of early stage businesses are not involved in exporting at all.

When it comes to established businesses, the situation is more negative (Figure 25). Only 3.6% of established businesses are involved in exporting above 75%. Only 5.4% have an intensity of between 26% and 75%; 51.8% have an intensity of 25% and less, while 39.3% of these firms are not involved in exporting. It would appear that entrepreneurs in the early stage of their businesses have more intentions for internationalization than those of established businesses.

This intention needs to be recognized and nurtured by policy makers and others who need to assist in creating avenues for exportation and in finding overseas markets.

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Figure 24: TEA- Export intensity

Figure 25: Export intensity of established businesses

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Support for High-growth Businesses Entrepreneurship in many countries is viewed as an activity that fosters economic growth and development. It is the businesses that continuously expand both locally and overseas that will create the jobs and provide the goods an services that will contribute to economic development. It is the high-growth businesses that employ the innovation and modern technology that will contribute to economic growth. However, entrepreneurial activity in developing countries, particularly those falling in the efficiency-driven category, is often driven by necessity. Necessity entrepreneurs are often motivated by survival instincts and most times minimal attention is paid to business growth. With necessity entrepreneurship, the innovation and technologies that are necessary to facilitate high-growth businesses are often absent.

When asked if companies like to experiment with new technologies and with new ways of doing things, only 21.2% of experts responded in the affirmative. The majority (51.5%) was of opposite views while 27.3% were undecided (Figure 26). It is clear, therefore, that unlike most developed countries, innovation is not a key component in business formation and growth in Jamaica.

Figure 26: Experimentation with new technologies

Governments, therefore, along with the private sector and other agencies, must shift focus from numbers of entrepreneurs, to the quality of the businesses that are formed and the growth aspirations of these entrepreneurs. Successive governments of Jamaica have placed significant emphasis on the stimulation of entrepreneurial activity as an unemployment alleviation and poverty reduction mechanism. Government, as well private sector agencies, provide support for entrepreneurship through various programmes. Respondents in the NES are of mixed views with respect to the priority placed on entrepreneurship policy by

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government. Forty-one percent of experts believe that the priority for entrepreneurship policy at the government level is high; 38% do not share this opinion, while 21% are undecided (Figure 27).

Figure 27: High priority for policy at the national government level

Despite the emphasis on entrepreneurship by policy makers, experts are of the view that there are not many support initiatives that are specially tailored for high-growth firms. As much as 61.3% of experts believe that these are not adequate, while only 12.9% believe otherwise (Figure 28). It is evident that policy makers are aware of the importance of high-growth entrepreneurial activity, as reflected by 63.7% of experts’ responses (Figure 29).

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Figure 28: Support initiatives for high-growth entrepreneurial activity

Figure 29: Importance of high-growth entrepreneurial activity

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Potential for rapid growth as a selection criterion when choosing recipients of entrepreneurship support returned mixed views by the experts: 33% thought that this should be so, 33% believed that this should not be so, while the other 33% were undecided (Figure 30). It was also felt by 46.5% of respondents that government programmes are highly selective when choosing recipients for entrepreneurship support (Figure 31).

Figure 30: Selection criterion for entrepreneurship support

Figure 31: Selection of recipients for government programmes

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Based on responses from both the APS and the NES, it is evident that the expectation for highgrowth entrepreneurship is minimal, thus impacting negatively on the job creation potential of entrepreneurial firms. For entrepreneurial ventures to become high-growth businesses, and create employment and contribute to economic growth and development, there must be an interplay of different variables. Two of the key facilitators are Government Policy and Education & Training, two of the GEM framework conditions. A strong science and technology base, a factor that is lacking in many developing countries, is also necessary for the creation of highgrowth businesses.

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EDUCATION AND TRAINING It is widely believed that improvement in education and training by educational institutions should be the new approach in order to foster entrepreneurship development in Jamaica and the wider Caribbean. However, the educational system is fraught with challenges that prevent the successful implementation of many improved programs. Some of these challenges are equal access to quality education, full access to secondary education, the underperformance of large numbers of students, the performance disparity between males and females, with females outperforming males, and the role and training of teachers in the system (Davis, 2004).

For the past two decades Caribbean education has been through several reforms and changes according to Dr. Didacus Jules, Registrar of the Caribbean Examinations Council, most of which he submitted have sought to address perceived problems or deficits in the system. He further questioned how many of these efforts sought to fundamentally rethink the function of education in the society and articulate the goals of education with the re-shaping of the postindependent Caribbean. Jules further stated that the evolution of Caribbean education systems has followed a path of progressive expansion of access to increasingly higher levels of education from public education through to the post-colonial era. Historically, he said, it was the attainment of universal primary education that facilitated the struggle towards independence and the transition from plantation economy to more inclusive modes of production. In the same manner, the move towards a service economy requires universal secondary education as the new education standard that will guarantee the human resource capacity to successfully make the transition. Additionally, he posited that it is universal access to tertiary education that will facilitate our participation in the information economy.

In a recently published article on March 1, 2011, in the Jamaica Observer entitled “Major shift in education and training coming” Ken Chaplin indicated that The National Training Agency of Jamaica (HEART Trust/NTA) will begin introducing workforce colleges as a major shift in Jamaica’s education and training system. This will represent a new teaching and certification approach that includes an incubator to support entrepreneurs, a more professional workforce setting and a higher level of training. This new framework for the development of an integrated training system will facilitate the delivery of higher-level quality training programmes, provide relevant industry-based experience through a productive environment and foster the development and growth of micro, small and medium enterprises (MSMEs) through incubator experience. The Chief Executive Officer (CEO) of the HEART Trust/NTA , Dr. Carolyn Hayle, further expounded that the integrated training system will feature departments of entrepreneurship and enterprise development, research and development, workforce colleges, and technical vocational education and training institutes (TVET), and the vocational training development institute (VTDI). She further submitted that the current VTDI will be strengthened

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to operate at the tertiary level and provide support and leadership to the training systems in the areas of program development, instructional development of TVET professionals such as policy makers, value based leaders and instructors.

According to the 2010 GEM National Expert Survey (NES) conducted in Jamaica, experts were asked whether teaching in primary and secondary education encourages creativity, selfsufficiency and personal initiative (Figure 32). One half (50%) of the total respondents disagreed that primary and secondary education encouraged creativity, self-sufficiency and personal initiative, while a mere 34% said they agreed with the statement. This suggests that far more needs to be done at the primary and secondary education level to lay the foundation for students to be creative, self-sufficient and take personal initiatives. Just this year the Caribbean Examinations Council (CXC) saw the need to introduce Entrepreneurship Education as one of the courses in the Caribbean Advanced Proficiency Examination (CAPE) curriculum. It is hoped that this new and bold initiative will aid in encouraging creativity, self-sufficiency and personal initiative in teaching at the secondary level of education in the near future.

Figure 32: Teaching in primary and secondary education encourages creativity, self-sufficiency and personal initiative

When asked whether teaching in primary and secondary education provides adequate instruction in market economic principles, 65% disagreed with the statement. A mere 12% agreed while 26% were unsure. This suggests significant weaknesses in the educational system in providing instruction in the area of market economic principles.

Respondents were also asked whether teaching in primary and secondary education provides adequate attention to entrepreneurship and new firm creation. The findings revealed (Figure 33) that over three quarters (75%) of the respondents disagreed with the statement with

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merely 8% supporting it. The remaining 17% of the respondents neither agreed nor disagreed with the statement. Relevant literature suggests important links between education, venture creation and entrepreneurial performance as well as between entrepreneurial education and entrepreneurial activity (Raposo and do Paco, 2011). Hence, this result showed that there needs to be a concentrated reform of the primary and secondary education system in Jamaica with great emphasis on entrepreneurship education.

Figure 33: Teaching in primary and secondary education provides adequate attention to entrepreneurship and new firm creation

The NES went further in its investigation and asked whether in Jamaica, colleges and universities provide good and adequate preparation for starting up and growing new firms. The responses revealed that 43% of the respondents indicated that they agreed with the statement which is an increase from the previous year while 31% disagreed. Twenty six percent (26%) of the respondents were unsure. The response in the affirmative could be accredited to the fact that the universities and colleges are responding more to the needs of the economy by including more entrepreneurship programs within their curriculum. But while colleges and universities are giving some support to preparing students for starting and growing new firms, it is not adequate and more needs to be done.

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The question was also asked, whether in Jamaica, the level of business and management education provide good and adequate preparation for starting up and growing new firms.

Forty-one percent of the respondents confirmed the statement to be true, and 35% false.

Twenty four percent (24%) were unsure. The response in the affirmative reveals an improvement over the previous year which could again be attributed to the increase in entrepreneurship programmes across curricula in universities and colleges. The educational system should influence the knowledge base, the achievement of skills, competencies and attitudes on which future career choices are based. Since these decisions are essential to the future of the individual, the school has a responsibility to inform and expose students to a wide range of career options, including entrepreneurship.

Additionally, the NES explored the views of respondents on whether in Jamaica, the vocational, professional, and continuing education systems provide good and adequate preparation for starting up and growing new firms. Forty percent (40%) of the respondents surveyed indicated that the system provide good and adequate preparation for starting up and growing new firms while nearly the same percentage (37%) disagreed with the statement. Twenty three percent (23%) of those interviewed were neither for nor against. This is the opposite of findings presented the previous year except that more persons disagreed with the statement then.

Again, this showed an improvement on the part of the institutions like HEART Trust/NTA and the universities who are responding to the need of the market and placing more emphasis on vocational, professional and continuing education. With the renewed focus and mandate of the HEART/Trust NTA, the rebranding and new focus on ethics and value-based leadership of the Joan Duncan School of Entrepreneurship, Ethics and Leadership, at the University of Technology, Jamaica, and among other institutions, one should see greater improvement in the educational system in these areas. A high level of entrepreneurial activity is assumed and shown to contribute to foster innovation, competition, job creation, economic growth and citizen’s well- being.

When asked by the experts to rank three areas that are constraining entrepreneurial activity in Jamaica, education and training was ranked at number three as one of the factors that are constraining entrepreneurial activity. Financial support, government policies and programs were ranked numbers one and two, respectively. When asked to indicate three areas that foster entrepreneurial activity, the respondents indicated education and training as the first factor that foster entrepreneurial activity, followed by government programs and financial support. When asked to recommend three factors or areas that could improve entrepreneurial activity in Jamaica, education and training was ranked in the top three by all respondents.

Overall, 13% of the respondents indicated that education and training is a constraint to entrepreneurial activity in Jamaica, while a mere 10% of respondents saw education and training as fostering entrepreneurial activity. On the other hand, 15% of the respondents

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recommended that education and training could in fact improve entrepreneurial activity in Jamaica.

The APS revealed that 61% of the population attained post secondary level of education, 21% attained secondary education and 18% had no formal education. This could suggest that entrepreneurs are educated for the most part which should reflect positively in managing and operating their businesses. What might be the problem is the kind of education, whether its education for and about business and entrepreneurship or other types of education.

At the lower level of the education system in Jamaica, The APS further revealed that 12% of the population attained the first stage of tertiary education, 9% attained post-secondary nontertiary education, 61% attained upper secondary education, 17% achieved primary education or first stage of basic education, and 1% was at the pre-primary education level. Overall, these findings indicate that more than half of the population has been educated at the upper secondary level (61%). According to the GEM 2010 global report, in factor-driven economies like Jamaica, it is critical to develop a sufficient foundation of basic requirements that can support sustainable businesses, and education and training must be a part of that foundation.

But I dare say it must be the right kind of education, (entrepreneurship education) which is education for opportunity and education as a life skill.

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CULTURAL AND SOCIAL NORMS The cultural and social norms of a society determine what is considered acceptable behaviour in that society. This in turn can inhibit or contribute to the growth and development of that society. Jamaica has been struggling with what is at best anaemic economic growth for the past twenty years while carrying an ever increasing debt burden.

Mark Weisbrot, co-director of the Center for Economic and Policy Research, in Washington, DC. and President of Just Foreign Policy, writing in an article in the Guardian, Friday 22 July 2011, said that Jamaica has one of the worst debt burdens in the world, with a gross public debt of 123% of Gross Domestic Product and an interest burden of the debt which has averaged 13% of GDP over the last five years. He said the country is paying so much interest on its debt that it does not have much room in its budget for other things. He added that for the 2009/2010 fiscal year, Jamaica's interest payments on the public debt were 45% of its government spending. He concluded that this crowding out of public investment and social spending militates against Jamaica's progress towards achieving the Millennium Development Goals.

The Jamaican government has increasingly been promoting entrepreneurship as one of the solutions to the problem of inadequate number of jobs, and as a means to getting the much needed growth. Reginald Budhan, Permanent Secretary, Jamaica’s Ministry of Industry, Investment and Commerce, speaking at the launch of the National Entrepreneurship Week 2011 at the Wyndham Kingston Hotel on October 25, 2011, reiterated the Government’s commitment to promoting entrepreneurship to foster job creation and stimulate economic growth. He said entrepreneurship is an important factor in our economic development and this is reflected in our efforts to improve opportunities for micro, small and medium enterprises (MSMEs).

Jamaicans have been influenced by external cultures especially that of their more well-to-do Northern neighbours such as the United States and Canada. Jamaicans, it appears, have come to place value on the affluent lifestyles they see on the media emanating from wealthier nations. As a result of this and other factors Jamaicans have placed a premium on individual success, self-sufficiency and autonomy achieved through personal effort and initiative. They have also accepted that individuals should be responsible for managing their own lives. The majority of respondents (69%) in the 2010 NES revealed that Jamaica’s national culture is supportive of individual success achieved through own personal efforts, while a minority of 24% disagreed (Figure 34). Forty-six percent (46%) said it was partly or completely true that the national culture emphasizes self-sufficiency, autonomy and personal initiative, while a smaller portion, twenty two percent (22%), stated otherwise (Figure 35). Moreover, fifty-two percent

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(52%) were of the view that the culture emphasizes individual responsibility for managing their own lives (Figure 36).

Figure 34: In my country, the national culture is highly supportive of individual success achieved through own personal efforts

Figure 35: In my country, the national culture emphasizes self-sufficiency, autonomy, and personal initiative

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Figure 36: In my country, the national culture emphasizes the responsibility that the individual (rather than the collective) has in managing his or her own life

Cultural Anomaly There appears to be a cultural anomaly emanating from the views of the experts in the NES. While Jamaicans revere achievement and wealth, the requisite support for legitimate means to the acquisition of economic achievement and wealth is somewhat lacking. In the view of the experts, entrepreneurial risk-taking, innovation and creativity is not well supported by the national culture.

The larger proportion, thirty-nine percent (39%) of NES respondents were of the view that the national culture to a greater or lesser extent does not support entrepreneurial risk taking while thirty-three percent (33%) thought it did (Figure 37). Forty-five percent (45%) were of the view that the national culture does not encourage creativity and innovativeness while a smaller number, thirty-seven percent (37%) said it does. Hence, in the view of the experts, wide-scale support for entrepreneurial risk-taking, innovation and creativity is lacking (Figure 38).

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Figure 37: In my country, the national culture encourages entrepreneurial risk-taking

Figure 38: In my country, the national culture encourages creativity and innovativeness

The APS reveals a level of optimism about starting new businesses with 54% of respondents saying they personally knew someone who started a business in the past two years and 56% saying that in the next six months there will be good opportunities for starting business in the area where they live. The actual practices of entrepreneurship as reflected by APS respondents tend to support the view of the experts regarding the issue of lack of creativity and innovation in entrepreneurial pursuits. Eighty-eight percent of APS respondents with entrepreneurial ventures said none of their customers will consider their product or service to be new or unfamiliar while only 12% said they would (Figure 39). A majority (56%) said the technology or

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procedure required for their product has been around for longer than five years (Figure 40).

There is some innovation regarding markets as 54% of APS respondents with businesses have some customers who normally live outside of the country (Figure 41).

Figure 39: Do all, some, or none of your potential customers consider this product or service new and unfamiliar?

Figure 40: How long have the technologies or procedures required for this product or service been available?

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Figure 41: What proportion of your customers normally live outside the country?

Traditional vs New Means of Wealth Acquisition In the modern era there has been a shift away from traditional means of wealth acquisition such as ownership and exploitation of natural resources to newer means such as utilization of intellectual property. Entrepreneurship is seen as an effective means of achieving wealth utilizing modern approaches. Some of the bedrocks of entrepreneurship include creativity, innovation and calculated risk taking.

It therefore appears that the cultural and social norms of Jamaica are lagging in their acceptance of creativity and innovation, key aspects to achievement of wealth in the modern era, thereby removing the incentive to utilize these means of acquisition of the wealth and achievement that the said culture desires. Hence, businesses that export will likely be using old technology and procedures to create their products and will not normally be producing products that are not considered new or unfamiliar. Additional new businesses will largely be based on traditional products and services.

To the extent that the culture does not support creativity and innovation, individuals are then left with little option but to utilize traditional means of achieving success. For most persons these traditional means involve seeking a job and working for someone which often does not facilitate the desired acquisition of wealth and achievement.

The obvious question is: Why is the culture, by and large, not supportive of creativity and innovation despite the need for the benefits which they can bring?

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The NES survey suggests some answers. Eighty-seven percent (87%) of respondents said teaching in primary schools does not provide adequate attention to entrepreneurship and new firm creation. No wonder the tenets of entrepreneurship such as creativity and innovation are not valued as these are not emphasized early in the education system but are mainly taught in later life, so children do not grow up seeing these as positive values to be pursued. It is true that if the foundation is weak then the building cannot be strong.

So while the notion of entrepreneurship is well supported in the culture, the orientation, skills and training to get involved is somewhat lacking as suggested by the low level of creativity and innovation. This also points to a less than full understanding of the nature of entrepreneurial pursuits. This lack of understanding may account for the lack of full support for creativity, innovation and the calculated risk-taking needed for new venture success. A better understanding by Jamaicans of the journey which entrepreneurs take when they venture into entrepreneurial pursuits would see more support being given to values such as creativity, innovation and calculated risk-taking, as these are indispensable components of any entrepreneur tool kit.

Cultural and Social Norms as a Fostering and Constraining Factor When asked to list topic/areas that are constraining entrepreneurial activity in Jamaica, the experts cumulatively mentioned cultural and social norms as the fourth in the list of such factors. Cultural and social norms were mentioned as first in a list of factors that supported entrepreneurial activity and was listed the fifth topic/area recommended to improve entrepreneurial activity in Jamaica.

On balance, cultural and social norms are seen as more of an enabling, than a constraining factor as it relates to entrepreneurial activity in Jamaica. And this is as it should be, given that cultural and social norms determine what is acceptable behavior. The experts see other areas, such as government policies, financial support, education and training, and government programmes, as needing priority attention to improve entrepreneurial activity in Jamaica.

Hopefully, improvement in those areas will also result in more in-depth understanding of the nature of entrepreneurship which will in turn lead to a reduction in the extent to which cultural and social norms continue to be a constraining factor.

When this occurs, entrepreneurs will be given the support they need as they take the entrepreneurial journey leading to increased wealth and achievement for themselves and the country.

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RECOMMENDATIONS A greater focus needs to be placed on support initiatives that are particularly tailored for highgrowth firms and not only on the number of start-ups. Although policy makers are aware of the importance of high-growth firms to the economy, there are not many initiatives that are directed toward the creation of high- growth firms.

Training programmes for entrepreneurs should include exporting and other internationalization strategies. Additionally, the government should assist entrepreneurs in finding markets internationally for their goods and services. This will improve the low export intensity of entrepreneurial firms.

A paradigm shift in the teaching of science is necessary. Science courses in schools are currently directed toward passing traditional-type examinations. A more practical approach to the teaching and learning of science is necessary in order to foster innovation and creativity in students. To create high growth businesses, particularly in the manufacturing sector, a strong science and technology base is necessary.

A national programme needs to be developed to bring about a cultural change in the way Jamaicans view and give support to creativity, innovation and calculated risk-taking and position these values as central to entrepreneurship success. Mechanisms need to be found to help more businesses incorporate technology in their products and services.

Universities should place greater emphasis on the commercialization aspect of entrepreneurship. Students as a part of their entrepreneurship training programme develop creative ideas and concepts which rarely go beyond the classroom. The following are recommendations to transform the education system in Jamaica and by extension, the Caribbean: • • • • • •

Reformation of the education system that includes entrepreneurship at the forefront and from the foundation level (primary education) Agreement on a philosophy of education in the contemporary Caribbean which sees entrepreneurship education as the driver Provide ongoing training that is at the cutting edge, relevant and certified Make teaching and learning less stressful and more fun Align assessment to key competencies and global competitiveness Establishment of a seamless education system

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REFERENCES Chaplin, K. (2011). Major shift in education and training coming.Jamaica Observer, March 1, p.11.

Budhan, Reginald.Available at http://rjrnewsonline.com/news/local/gov%E2%80%99tcommitted-entrepreneurship-budhan. Retrieved November 23, 2011.

Davis, R. (2004). Task Force on Educational Reform: A transformed education system. Retrieved from http://www.jis.gov.jm/EducationTaskForce.pdf Jules, D. (2010). Rethinking education in the Caribbean. The Caribbean Examiner 8 (2): 6-11.

Planning Institute of Jamaica (PIOJ). 2009-2010. Economic and Social Survey: Jamaica. Kingston, Jamaica: Planning Institute of Jamaica.

Raposo, M., and do Paco, A. (2011).Entrepreneurship education: Relationship between education and entrepreneurial activity. Psicothema 23 (3): 453-457.

Sanchez, J. C. (2010). University training for entrepreneurial competencies: Its impact on intention of venture creation. International Entrepreneurship and Management Journal, April, 1-1 Weisbrot, Mark. Available at http://www.guardian.co.uk/commentisfree/cifamerica/ 2011/jul/22/jamaica-debt-crisis - retrieved November 23, 2011