Venture capitalism and the economy
THE EDITOR, Sir:
Small business start-ups are vital for the creation of jobs and innovation in modern economies, and with the plethora of studies bolstering this claim, sensible governments are creating ecosystems for start-ups.
According to the America-based National Federation of Independent Businesses, small businesses are responsible for two-thirds of the jobs created in recent years, with start-ups accounting for a large share of these new jobs. Therefore, it's not surprising that the Development Bank of Jamaica is taking steps to facilitate a venture capital platform to provide these businesses with financing. However, without greater support from the private sector, our plans will not be achieved.
Venture capitalism has succeeded in places like America because of the foresight of private entrepreneurs who were willing to take risks. Our local entrepreneurs cannot bemoan the limited access to financing for start-ups if they are not willing to be transformative and finance their initiatives.
For example, New Zealand's Venture Capital Association has played a tremendous role in shaping policies for sector and nurturing young entrepreneurs. We don't expect local businessmen to follow their American counterparts and launch an accelerator every day, but we demand a private sector with initiative.
Furthermore, Jamaica should position itself to attract talent like other countries by creating a start-up visa for entrepreneurs. The reality is that Jamaica's start-up sector will need foreign talent, especially since the tech industry is relatively young. The benefits of foreign talent to a country cannot be overemphasised.
The rules governing the provision of this visa would be quite simple; applicants will be required to raise external funding and be connected to a Jamaican accelerator, therefore, the private sector will be required to play a significant role in the development of accelerators.
Reforming tertiary education will also facilitate start-ups. There should be a greater partnership between the STEM disciplines and entrepreneurship.