Supporting Creative Entrepreneurs in the Caribbean and Latin America

Nov. 2013 / 01

Policy Brief 11-13-01

Supporting Creative Entrepreneurs in the Caribbean and Latin America

by Hopeton Dunn and Michele Thomas

This study builds on Global Entrepreneurship Monitoring (GEM) models of Data Gathering and Analysis

INTRODUCTION The creative industries in Latin America and Caribbean regions remain largely untapped. This is despite their economic potential, vibrancy and global reputation.

This policy brief aims to capture the experiences and entrepreneurial environment of persons operating in the creative industries of four Caribbean and Latin American countries (Barbados, Colombia, Jamaica and Trinidad and Tobago). Data was collected using the standard Global Entrepreneurship Monitor (GEM) survey tools, namely the National Expert Survey and the Adult Population Survey. These surveys were conducted by GEM teams based in the respective countries and builds upon a previous report by Nurse (2012) on the Creative Industries in the Caribbean.

The research itself provides well needed baseline data and adds to the growing body of knowledge about this particular sector, coming at a time when countries are continuing to look outside of traditional sectors such as agriculture for growth and development opportunities.

STATE OF AFFAIRS The main activities of the creative industries sector across most of the countries studied were Music Recording,

Artiste Performance and Visual Arts. Most persons operate at the lowest level of the value chain: creation. As an exception, the industry in Barbados is focussed on Craft, Jewellery Design and Fashion with most persons operating at the secondary level.

KEY POLICY RECOMMENDATIONS •

Policy makers need to place specific lenses on the sectors involved in the MSME industry as well as micro-lenses within each sector.

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A conducive environment for the creative industries require more than investments and appropriate government policy.

It requires embedding the spirit of intrapreneurship and other values which would create “activist entrepreneurial” countries.

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There is need for a more cohesive approach which includes capacity building especially in areas such as intellectual property rights (IPRs) and support in shifting creation to more high value endeavours which can potentially reach the growing global market.

Policy Brief Nov. 2013 / 01

At the micro-level this means that the scalability of such enterprises and income potential for young people, as some of the main entrepreneurs within Creative Industries - may also be restricted. This is important in light of concerns around the need to provide meaningful and sustainable opportunities to address youth unemployment across the Caribbean and Latin America.

ENTREPRENEURSHIP DETERRENTS The research study shows that there are a number of endemic factors which hinder entrepreneurship, innovation and growth across the region. These are graphically represented in the Figure 1, centred on key deterrents to the growth of entrepreneurship in the creative industries sector.

Except for Barbados, all other countries studied reported lack of access to finance and the absence of a supportive environment for investment and innovation as the main obstacles to viability. More informed choice of target markets and a relatively more favourable economic climate would perhaps be factors which could pave the way for easier access in Barbados and are variables that should be further examined for critical lessons and best practice.

The need for consistent quality in performance, better information flows and faster reform of relevant Government policies are issues that permeate all major areas identified.

When compared with the general data on Entrepreneurship from the GEM 2011 survey, it must be noted that the challenges faced by the creative industries are for the most part not unique. The region in

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FIGURE 1 ďšş KEY DETERRENTS TO GROWTH OF ENTREPRENEURSHIP IN CREATIVE SECTOR

Finance

The Data in this Research Project was collected by the following institutions:

Intellectual Property Rights

Access to Markets

Key Deterrents to Entrepreneurship Education and Training

Innovation Clusters and Collaboration

Source MICT, UWI

general lacks the framework conducive to the sustainable development of entrepreneurial activity. These include lack of research and development transfer channels, difficulties in accessing finance and a dearth of relevant Government programmes.

However, the challenge for the creative sector becomes more pronounced because of the very nature of the business itself. Two of the main challenges identified by this research are: 1. The need to balance market forces such as banking requirements with the time and latitude required by creative entrepreneurs to bring about quality products. This would be particularly pronounced in areas such as music. Time to market expectations and difficulties valuing sometimes intangible products often make creative endeavours appear more risky to the market;

University of Technology

Policy Brief Nov. 2013 / 01

2. Intellectual property considerations are often complicated by prevalence of informal systems, lack of IPR education among entrepreneurs and weak regulatory systems.

POLICY RESPONSES There have been recent attempts by policy makers to address key issues faced by entrepreneurs as identified by experts in GEM 2011. In particular, both Jamaica and Trinidad and Tobago have identified policy imperatives in relation to improving business environment, enabling more widespread finance and providing more business development support and in particular to women, youth and the physically disabled.

Nonetheless, as raised by this report, the dichotomy between the needs of the creative industry and that of the sectors and systems which are required for support are not necessarily addressed by these general interventions. Therefore, more targeted and cohesive policy approach and actions are required if the potential of the creative industries in the region is to be realized.

Four key arease for simultaneous intervention have been identified as follows: • Access to Finance; • Innovation, Education and Training; • Access to Internal and External Markets; • Clusters and Collaboration.

CALL TO ACTION Access to Finance • Specialised interventions to bridge the communication gap with the traditional financial sector could lead to a better understanding of the business models and value creation processes in creative industries, thereby increasing

direct debt/equity funding to the sector.

• Draft and promulgate venture capital policies to provide a coherent and predictable environment for potential investors who operate outside the traditional financial and banking system.

• Public IPR education interventions among the entrepreneurs and institutional strengthening of IPR regimes at the policy and governance levels.

Innovation, Education and Training • Coordinate the transfer of research and development insights from the regional universities to entrepreneurs in the national and regional economies.

• Increase formalised training and business planning within the creative industries.

• Leverage information and communications technologies as platforms for delivering capacity building courses. This should be in such areas as intellectual property rights, financing, business planning, enterprise management and marketing.

Access to Internal and External Markets • Implement policies geared at prioritising micro, small and medium enterprises (MSME) in public procurement exercises.

• Promote the use of digital tools and other ICT facilities at every level of the creative industries value chain to break into international markets in fast growing areas such as animation and digital arts.

Clusters and Collaboration Figure 2 identifies seven (7) stakeholder communities, access to which can enhance the success of creative enterprises.

Entrepreneurs should:

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Policy Brief Nov. 2013 / 01

FIGURE 2: STAKEHOLDER COMMUNITIES IN ENTREPRENEURSHIP FOR THE CREATIVE SECTOR

Comumian, R., Chapain, C., & Clifton, N. (2010). Location, Location, Location: exploring the complex relationship between creative Accessing the Potential of the Creative Industries is a industries and place. Creative Regional/Multi-stakeholder Responsibility.

Industries Journal, 3(1), 5 - 10. doi:10.1386/ci.3.1.5_2 Dunn, H. (2007). Global technologies and the business of Jamaican National Diaspora Governments culture: maximizing the potential of ICTs and New Media . Presented at a UNESCO Inter-Regional Experts Meeting, Seychelles.

Regional MSMEs Dunn, H., & Minto-Coy, I. (2010). The Bodies and Communications industry in the (CARICOM, etc.)

Associations Caribbean: issues, challenges and opportunities. Ontario : The Centre for International Governance Innovation.

Large and IPR Small Governance Henry, C. (2007). Entrepreneurship in Financiers Bodies the creative industries. An Education international perspective. and Training Cheltenham; Northampton: Institutions Edward Elgar.

Nurse, K. (2007). The Cultural Industris Source: MICT, UWI in CARICOM. Trade and development challenges . Caribbean Regional • Develop networks of regional creative Negotiating Machinery . industries to diffuse information and Nurse, K. (2009). The creative sector in CARICOM: enable creative entrepreneurs to take the Economic and Trade Policy Dimensions. advantage of opportunities outside of CARICOM Secretariat .

Nurse, K. (2012). Creative Entrepreneurship in the their own national markets; Caribbean: The results of the enterprise/entrepreneurship survey, GEM. • Engage the large Diaspora communities Quartesan, A., Romis, M., & Lanzafame, F. (2007). in places such as Canada, UK and the Cultural Industries in Latin America and the USA, in order to promote greater Caribbean: Challenges and Opportunities. Inter awareness about the potential of creative America Development Bank. Retrieved from industries enterprises in the region; http://idbdocs.iadb.org/wsdocs/getdocument.as px?docnum=1152852 Utrecht, H. v. (2010). The entrepreneurial dimension REFERENCES of the cultural and creative industries.

Brandellero, A. M., & Kloosterman, R. (2010).

Netherlands. Retrieved from Keeping the market at bay:exploring the http://www.cure-web.eu/uploads/media/Rene_ loci of innovation in the cultural industries.

Kooyman_CZI.pdf Creative Industries Journal, 3(1), 61-77. doi:10.1386/cij3.1.61_1

This policy brief was prepared in October 2013 by the Mona ICT Policy Centre, Mona School of Business and Management, The University of the West Indies with the support of International Development Research Centre, Canada