Simplified strategy for growth and prosperity
The Jamaican macroeconomic environment continues to improve quite impressively. All in all, the policy shapers and managers are doing mostly the right things. Consequently, the conditions for doing business are improving. Other sources also confirm this. For example:
The Chamber of Commerce's Consumer and Investor Confidence Survey indicates a high level of positive outlook (end of first quarter 2015).
The Global Entrepreneurship Monitor Report on the Conditions for Doing Business rates Jamaica favourable enough, as illustrated from my selective list of countries and regions in Table 1.
TABLE 1: JAMAICA'S
COMPARATIVE RATING ON CONDITIONS FOR DOING BUSINESS (2014)
COUNTRY AVG RATING
Costa Rica 2.48
Latin A/Caribbean 2.53
Source: Computed from Global Entrepreneurship Monitor Report 2014 Table 3.2.
These ratings are based on nine factors: financing, national policy, regulations, government programmes, primary and secondary education, R&D transfer, commercial infrastructure, internal market dynamics and internal market openness, physical infrastructure and culture and social norms.
Jamaica's score of 2.52 compares well with hot spots/strategic comparators: Trinidad and Tobago (2.48), Panama (2.54), Brazil (2.33), Barbados (2.22), and Costa Rica (2.48). It also compares well against the Latin America/Caribbean (2.53).
The foregoing should convince everyone that Jamaica is ready for growth. So why is it not growing? Well, as West Indians, we should know that, for the past 16 years, while the Windies cricket groundsmen prepared some of the best wickets for the Windies to win on, they continue to lose in every series in the Caribbean. Of course, in this same period, the few superstars like Lara, Gayle and Chanderpaul perform with excellence because they had their own game plans.
A handful of enterprises in Jamaica are increasingly responding to the improving business environment. They have developed, and are executing, business strategies for expansion, and are doing well, too. These include: Sagicor, Sandals, Wisynco, GraceKennedy, LASCO, Digicel, SuperClubs, Caribbean Producers and Caribbean Broilers. Of course, the Chinese also see the opportunities and are exploiting them.
Again, like the Windies team, even when the wicket is fixed for them to win, the passive and mediocre enterprises continue to do poorly and the ones with carefully developed business strategies and commitment to succeed are doing well.
The bottom line is that Jamaicans have to invest their way into growth and prosperity. This requires entrepreneurship that goes beyond access to, and injection of, cash. It requires a combination of ideas, innovation and a range of relevant behavioural skills. These behavioural skills or attributes include: sense of purpose, passion for business, communication, self-worth, confidence, independence, high self-expectations, optimism, ability to avoid toxic people or opinions, and knowing how to make a difference.
I may even argue that while it is advisable to combine both the innovative and behavioural skills, the latter category is more critical and, in many cases, can stand on its own. I have researched some of the most successful founders of leading enterprises in recent time. Most of them have net worth higher than Jamaica's GDP, and in many cases, they are a combination of innovators/technologists and behavioural scientists.
Sense of purpose
In cases where they are not combined, the single founder is a behavioural/liberal scientist (liberal arts) or dropouts with a strong sense of purpose and highly passionate about business. There are some well-known examples in Table 2.
The popular belief that Jamaicans are highly motivated to enter entrepreneurship and stay in business is a myth. The fact that the co-chairman of the Economic Programme Oversight Committee, Richard Byles, reported that increase in business loans is only five per cent over the past year (may be negative since inflation is over five per cent) and the economy remains sluggish despite its favourable condition for investment confirms this.
If this is still debatable, or unconvincing, Global Entrepreneurship Monitor Report of 2014 also provides enough comparative data to confirm that Jamaica's index of motivation for entrepreneurship is extremely low and the index for discontinuation of business is extremely high when compared with countries I have selected as strategic comparators: Trinidad and Tobago, Singapore, USA, and Barbados. In terms of motivational index for entrepreneurship, the ratio between the need to go into business for improvement, because of observed opportunities, and because of necessity) is only 1.0 versus 6.2 (Singapore), 5.4 (Trinidad and Tobago), 5.0 (USA) and 3.7 (Barbados).
In terms of the index for business discontinuity, the index for Jamaican entrepreneurs is 6.3 versus 4.0 (USA), 2.4 (Singapore), 3.7 (Barbados) and 2.8 (Trinidad and Tobago). Table 3 provides the data.
Sources: Tables 2.5 and 2.4 for Index of Motivation for Entrepreneurship and Index of Business Discontinuity, respectively, in Global Entrepreneurship Monitor Report 2014.
It can be concluded from Table 3 that:
n Jamaica's level of motivation for entrepreneurship is only 16 per cent of what it is in Singapore and 19 per cent of what it is in Trinidad and Tobago.
Jamaica's business discontinuity rate is 2.6 times what it is in Singapore and 2.3 times what it is in Trinidad and Tobago.
So far, we should understand eight things. Namely:
- Jamaica's condition for investment is good and improving.
- The Government's macroeconomic programme is indeed a growth strategy.
- The ball is now in the court of the business sector to initiate its own growth and expansion strategy.
- Jamaica has an extremely large entrepreneurial behavioural deficit.
- The combination of technological and behavioural skills is best for successful entrepreneurship.
- Successful global entrepreneurs in recent times are those with a strong combination of innovative and entrepreneurial behavioural skills.
- We also know that several Jamaican enterprises that have been favourably responsive to the improving business climate are doing very well.
- Finally, we also know that foreign investors, including bondholders, and Chinese and Spanish entrepreneurs have recognised the improved Jamaican climate for investment and are consequently increasing their investments here.
See Part Two next week.
- Dr Trevor Hamilton is an international management consultant and entrepreneur. Email feedback to firstname.lastname@example.org.