Yaneek Page, Guest Columnist
Entrepreneurship was one of the hottest buzz words for 2013. From political and business leaders to the ordinary man on the street, everyone seems to be singing from the same enterprise hymn book that mobilising our people to start and grow businesses is the key to alleviating the country's high unemployment, anaemic economic growth and debilitating debt crisis.
While I'm elated about the enthusiasm about entrepreneurship, I'm concerned that the emphasis is more on the quantity of businesses than the quality. It's a concern which was also expressed by the World Bank, one of our key multilateral partners.
"Many firms, but little innovation" is the subtitle of a recent World Bank report on entrepreneurs in Latin America and the Caribbean, which pointed to a chronic deficit in innovation and low growth potential among firms as one of the reasons for lackluster economic growth in the region over the last few decades (see http://www.worldbank.org/content/dam/Worldbank/document/LAC/LatinAmericanEntrepreneurs.pdf.
The bank noted that countries like Ecuador, Jamaica, Mexico and Venezuela introduce or develop new products at a rate that is less than half that of countries such as Thailand or Macedonia. The report called on regional leaders to focus on "building an innovative entrepreneurial class in which top-notch firms - firms that export goods, services, and even capital - no longer look tepid in contrast to entrepreneurial superstars elsewhere".
The likely question on the lips of small business owners is, what can be done to improve innovation and growth potential within our companies in the current environment? I have a few suggestions:
1. Practise intrapreneurship
Intrapreneurship is an effective method for companies to capitalise on the creativity of their employees to generate new products and services and more efficient ways of doing business. Simply put, it refers to the act of employees behaving like savvy entrepreneurs on behalf of the company and transforming great ideas into tangible, profitable economic commodities. To make intrapreneurship work, small businesses need to create an environment for innovation through infrastructure, training and tools, policies and incentives. Essentially, employers must hire the right people, develop their capacity to innovate and empower/incentivise them to act.
2. Invest in research & development
Consistent investment in research and development is critical to understanding and meeting market needs by creating and introducing new products or services. Small businesses often neglect research and development (R&D) because they believe it is too costly and/or they lack the expertise and human resources to undertake such efforts. However, it is possible to start with small investments, but the key is to be consistent and committed to building internal capacity for creativity and innovation. Additionally, entrepreneurs can utilise the services of the Scientific Research Council, local universities, and other centres of knowledge which specialise in R&D and offer their services to the public.
3. Focus on high growth industries
Sustained innovation is more likely in industries that have significant growth potential, such as information and communications technology, biotechnology, energy, clean/green technology, food, etc. One of the biggest mistakes entrepreneurs make is starting businesses that have limited scope for growth. Yet, even in this scenario, all is not lost. The beauty of enterprise is the freedom to diversify or start again to capitalise on new opportunities. An upside to focusing on high-growth industries is the ability to attract investment and support since these industries tend to have huge profit potential and significant public impact.
4. Focus on exports
It can't be reiterated enough, entrepreneurs need to produce products and services that can be exported. Earlier this year, I wrote an article on how to start a business process outsourcing business, which I started with the popular refrain "export or die" (see http://jamaica-gleaner.mobi/gleaner/20130616/business/business5.php). At the risk of being accused of being overly dramatic and alarmist, I believe we urgently need to convince entrepreneurs that the key to survival is expansion into other markets and earning foreign exchange. For producers of goods, the Jamaica Exporters' Association provides information, training and support for new and existing businesses who have the potential to export. You can find more information on their website at http://www.exportjamaica.org/start/. For producers of services, the Jamaica Coalition of Service Industries (JCSI), a programme of JAMPRO, can provide information and guidance on how to export your services. Further information can be found on their website at www.jamaicacsi.org.
While I've outlined four actions that entrepreneurs can take internally to improve innovation and growth potential of their businesses, there are other important factors which are external and require policy changes and government action. Among these factors are: (i) increase of business incubators (for firms in high growth-potential industries), (ii) expansion & capacity building of the scientific research council, (iii) proper valuation of intellectual property and operationalisation of IP finance, (iv) improved labour productivity and planning for skills and capacity development, (v) reduced government bureaucracy, (vi) increased sensitisation/support/information for start-ups and small businesses on high-growth industries with export potential. Entrepreneurs should let their voices be heard on these issues which affect enterprise innovation and development.
Yaneek Page is an entrepreneur and trainer in entrepreneurship & workforce innovation. Email: email@example.com, Twitter: @yaneekpage , Website: www.theinnovatorsbootcamp.com