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Business incubators in Kingston's inner city - Transforming jobless residents into entrepreneurs
published: Sunday | June 24, 2007

Dr. Henley Morgan, pastor and 'social entrepreneur', is developing a business incubator programme for depressed communities. Residents of the inner city are as economically driven as any other Jamaican, says Morgan. - Photo by Ross Shiel

Ross Sheil, Staff Reporter

The National Housing Trust (NHT) has given the go-ahead to establish a 'business incubator demonstration centre' to Trench Town, bringing new promise of sustained economic activity to depressed Trench Town and its neighbours.

The incubator is to be built on land between NHT's two Inner-City Housing Project (ICHP) developments in Trench Town, and surrounded by 252 apartments and the families who live in them.

NHT had originally reserved the site for construction of eight commercial rental units at a cost of $36 million to the state-owned mortgage lender and public-housing provider, but accepted the modified proposal of the Trench Town-based Agency for Inner-City Renewal (AIR) - a non-governmental organisation (NGO) run by business consultant, pastor and self-described 'social entrepreneur', Dr. Henley Morgan.

Agreement has been reached on the details of the project an to the original architectural plans are being negotiated.

Better able tomake repayments

For the NHT, encouraging small business is logical self-interest, since greater economic activity should logically make ICHP mortgage holders better able to make their mortgage repayments.

The housing agency says, however, that the partnership with AIR is unlikely to become a model for future housing developments given that the ICHP is a heavily subsidised $15 billion investment.

"We have already agreed on the project for several reasons," said NHT Senior General Manager Vincent George.

"It would stimulate viable businesses and gives them training, and I think any business that can survive those three years will have a pretty good chance of sustaining jobs in the inner city where unemployment is high."

Dr. Morgan wants the expertise of what he believes will be a 'Centre of Excellence', available to neighbouring communities.

AIR, which will operate the demonstration centre, has its own incubator project operating from the offices of Dr. Morgan's Caribbean Applied Technology Centre (CATC) business consultancy located on 85 West Road, across the road from the ICHP scheme.

Morgan's agency has already helped eight start-ups, five of which are still based on the compound: computer services, beauty salon, retail and wholesale, cooking gas distribution and carpentry/construction.

From the same compound, Morgan also houses his Praise City International Church, having taken a leap of faith to relocate from New Kingston almost three years ago, combining his ministry with pastor Errol Henry, who also runs Orion Insurance Brokers.

"I want to show that you can make money out of these communities," Morgan explains, confident that the incubator concept can be a vehicle for social change in the inner cities.

He believes that given Trench Town's cultural and historical resonance, developments there have the potential to attract outside interest and to spread throughout Jamaica.

He also believes the economic drive exists among inner-city residents, as elsewhere in Jamaica.

Indeed, last year's Global Entrepreneurship Monitor ranked Jamaica second out of 42 countries surveyed in terms of nascent entrepreneurial activity.

However, a lack of training and management skills are two factors that contribute to a high rate of failure of start-up businesses, especially when their operators are inexperienced or without adequate training or advice; hence the need for incubator projects, he maintains.

Filled with premeditated ideas

"These are people with ideas in their heads and they are willing to take risks but the problem with the Jamaican economy is that it's all geared in support of people who are rich in pocket but poor in ideas," explains Dr. Morgan of local entrepreneurs. "We need to invert this pyramid, and the incubator is a good way to do so and to reduce the failure of business start-ups."

AIR has struck up an agreement with Federal Investment Funding Limited to provide the necessary loans both for start-ups that he is currently helping, and those who would be part of the demonstration centre.

Morgan's version of the business incubator concept has also caught the eye of the Inter-American Development Bank's (IDB) Opportunities for the Majority project, which aims to educate the poor of the hemisphere to reconsider themselves as consumers, producers, partners and creators of wealth.

The IDB is considering funding for Morgan's project as a logical partner given the bank's mandate to foster small business, says consultant Audrey Richards.

"It is not a new concept but what is interesting with what he is doing, however, is that he is linking the concept with the community," said Richards.

No one to help

"One of the things that these communities lack is that nobody (businesses) wants to go in there, which this concept is addressing."

The University of Technology was the first to establish an incubator in the Caribbean when it opened the Technology Innovation Centre (TIC) on its Hope Road, St. Andrew, campus in 2002.

TIC primarily caters to information communication technology (ICT) start-ups but, as part of an agreement with AIR, has trained 24 small-business persons from Trench Town and other inner-city communities.

Morgan has already found jobs via CATC consultancy contracts with companies including Salada, Lasco, Petrojam and Jamaica Flour Mills.

"These companies hardly want to employ anyone from the inner city, but if I front it, then they don't mind," said Morgan.

But the demand for work is massive.

"If you place 100 people in jobs, then you have 300 tomorrow looking for jobs," he says. "Unemploy-ment is one of the biggest problems facing Jamaican youth and everyone knows that this is what crime and violence is feeding off."

Under its Youth Employment Programme (YEP), AIR is refurbishing the Ambassador Theatre in Trench Town, once a cultural mecca but reduced to a state of dereliction by violence.

AIR has created units and handed them over to established businesses which must employ apprentices to qualify for rent-free space, but is still waiting for feedback from Mayor Desmond McKenzie as to whether it can lease the Ambas-sador from owners, the Kingston and St. Andrew Corporation.

"You can have a fully fledged training institute where people within the incubator project can get training," says Morgan. "The idea is to link the theatre to the incubator as a training arm and spread the incubator concept wider throughout the community."

Community-based training programme

AIR already offers CXC and remedial classes in mathematics and English at the CATC compound and is hopeful that HEART Trust/NTA will agree to a proposal to establish a community-based training programme at the Ambassador for the new academic year.

The Jamaica Library Service has proposed to establish a library, homework centre and Internet café, providing that suitable space can be found at the Ambassador.

Using the Ambassador also enables people to cross borderlines says YEP administrator and former schoolteacher from the community, Cama Higgins-Taylor: "It's very central in the community and people are coming here to classes despite the border clashes and we're also planning to hold concerts here again."

There are now three businesses at the Ambassador: leathercraft, woodwork and upholstery. There is also a computer room with classes being offered to the community.

Despite Dr. Morgan's reliance upon his business experience and connections, he maintains reclaiming the Ambassador would not have gained acceptance in the community without his association with the church, which provides independence from garrison politics, both representational and criminal.

"I think the problem in such communities is one of legitimacy," he explains. "Garrisons are zones of social exclusion and you have to have legitimacy and I guess that there is no better way than the church. Also, you can't afford to be wrapped up in politics or ongoing feuds because of the expectations you will have to succumb to."

With Jamaica reputed to have the highest concentration of churches in the world, he hopes the clergy will become similarly active in the inner cities.

Government is launching its own incubator policy with $120 million budgeted to support projects. Funding will be made available to both public and private-sector incubator projects.

  • What is a business incubator?

    Business incubators are clusters of small businesses built around a successful enterprise which offers support services and resources. The concept has been adopted worldwide and in the United States research by the National Business Incubation Association (NBIA) shows that incubated businesses have an 87 per cent success rate compared to the traditional way of going it alone.

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