Mon­i­tor­ing en­trepreneur­ship: used and use­ful re­search

Jamaica Gleaner - - IN FOCUS - Martin Henry is a univer­sity ad­min­is­tra­tor. Email feed­back to col­umns@glean­erjm.com and med­hen@gmail.com.

ALOT OF re­search sits on shelves. Some of it de­serv­ingly so. But the whole point of ap­plied re­search, as I used to drill into the heads of stu­dents start­ing their first re­search ef­forts, is to in­flu­ence pol­icy and prac­tice.

So I was de­lighted to par­tic­i­pate last Thurs­day at the Univer­sity of Tech­nol­ogy, (UTech) Ja­maica in the pub­lic pre­sen­ta­tion of a piece of re­search which has been do­ing just that. It is the Global En­trepreneur­ship Mon­i­tor (GEM) Ja­maica Coun­try Re­port for 2016-2017, which was pro­duced by a re­search team drawn from across the Col­lege of Busi­ness and Man­age­ment.

UTech, Ja­maica has been pro­duc­ing GEM re­ports over the last dozen years since 2005. The in­ter­na­tional Mon­i­tor has been run­ning since 1999, adding more and more coun­tries, and claims for it­self to be “the world’s fore­most study of en­trepreneur­ship”.

GEM be­gan in 1999 as a joint pro­ject be­tween Bab­son Col­lege (USA) and the Lon­don Busi­ness School (UK). The aim was to con­sider why some coun­tries are more en­tre­pre­neur­ial than oth­ers. For this lat­est re­port, 65 coun­tries par­tic­i­pated, cov­er­ing 69.2 per cent of the world’s pop­u­la­tion and 84.9 per cent of the world’s GDP. Ja­maica is the only Caribbean coun­try in, and UTech, Ja­maica is one of 300-plus aca­demic and re­search in­sti­tu­tions do­ing the re­search work on the ground.

Min­is­ter of State for Fi­nance Fay­val Williams, who was guest speaker, spoke of the use the Gov­ern­ment of Ja­maica has been mak­ing of the GEM re­ports in craft­ing its MSME poli­cies. In­ter­est­ingly, she threw ku­dos to the pre­vi­ous ad­min­is­tra­tion for the 2013 pol­icy for the sec­tor which they had de­vel­oped and on which the present ad­min­is­tra­tion in which she serves is build­ing. This drew ac­co­lades from the dean of the Col­lege of Busi­ness and Man­age­ment and from the au­di­ence.

Min­is­ter Williams is her­self ex­traor­di­nar­ily well qual­i­fied in busi­ness and fi­nance with de­grees in the field from both the Har­vard Univer­sity and the Whar­ton School of Busi­ness at the Univer­sity of Penn­syl­va­nia. She was a mover and shaker in one of Ja­maica’s most in­no­va­tive and suc­cess­ful firms, JMMB.

This is a trend not suf­fi­ciently no­ticed. More and more, the peo­ple in politics are com­ing from the top of the ed­u­ca­tion lad­der (and one would as­sume the top of the IQ pyra­mid) with the Par­lia­ment thickly sprin­kled with ad­vanced de­grees and pro­fes­sional qual­i­fi­ca­tions. Why can’t th­ese peo­ple, from among the bright­est and the best, col­lec­tively chart a course of ac­tion that can res­cue and pros­per this coun­try which the Global En­trepreneur­ship Mon­i­tor is re­port­ing to be brashly en­tre­pre­neur­ial?

EV­I­DENCE-DRIVEN POLI­CIES

The aca­demic Dr Peter Phillips of the Op­po­si­tion PNP, as he leads his party into the first an­nual con­fer­ence with him as fifth pres­i­dent this week­end, and as he plots pol­icy for gov­ern­ment, should give care­ful thought to how the col­lec­tive brain­power and ed­u­ca­tion avail­able to him in the party can be bet­ter ap­plied to nation build­ing around ev­i­dence-driven poli­cies.

The gov­ern­ing JLP, with the likes of Fay­val Williams on its bench in the Par­lia­ment and in the Cab­i­net, should do like­wise and with greater ur­gency.

“GEM,” the web­site would have us know, “is a trusted re­source on en­trepreneur­ship for key in­ter­na­tional or­gan­i­sa­tions like the United Na­tions, the World Eco­nomic Fo­rum, the World Bank, and the Or­gan­i­sa­tion for Eco­nomic Co­op­er­a­tion and De­vel­op­ment (OECD), pro­vid­ing cus­tom data sets, spe­cial re­ports, and ex­pert opin­ion. Th­ese im­por­tant bod­ies lever­age GEM’s rich data, tried-and-tested method­ol­ogy and net­work of lo­cal ex­perts to pro­mote ev­i­dence­based poli­cies to­wards en­trepreneur­ship around the world.”

Also speak­ing on the launch pro­gramme was the as­sis­tant gen­eral man­ager for re­tail bank­ing in the coun­try’s big­gest bank (de­pend­ing on how ‘big’ is mea­sured), NCB, Mar­cia Reid-Grant. NCB has been one of the big­gest and most con­sis­tent back­ers of the GEM re­search done in Ja­maica. Recog­nis­ing its pub­lic value, the univer­sity’s own in­ter­nal Re­search De­vel­op­ment Fund has also pro­vided sup­port to the GEM pro­ject.

Lay­ing aside the in­ter­est-rate controversy for a mo­ment and the de­bate about how well the banks per­form their role of fi­nanc­ing the de­vel­op­ment of the coun­try, NCB has been one of the busi­ness suc­cess sto­ries since Gov­ern­ment took over the oper­a­tions of Bar­clays Bank in 1977 when that UK bank was pulling out of the coun­try. Sub­se­quent pri­vati­sa­tion has only strength­ened per­for­mance.

I see we are inch­ing closer to hav­ing the FINSAC re­port on the fi­nan­cial­sec­tor melt­down of the 1990s which NCB weath­ered, the Gov­ern­ment hav­ing just al­lo­cated an­other $58.4 mil­lion and granted a three-month ex­ten­sion for the com­ple­tion of this most im­por­tant re­port.

The FINSAC re­port is go­ing to be a gold mine for re­search on fi­nan­cial­sec­tor col­lapse, an ex­traor­di­nar­ily use­ful case study. UTech’s Col­lege of Busi­ness & Man­age­ment is now heav­ily into re­search­ing and writ­ing case stud­ies.

But back to busi­ness! NCB has been us­ing the GEM Ja­maica Coun­try Re­port to guide its lend­ing pol­icy to the MSME sec­tor and has been learn­ing to use qual­i­ta­tive as­sess­ment cri­te­ria of bank­a­bil­ity along­side the old num­bers game.

In each par­tic­i­pat­ing coun­try, GEM looks at two el­e­ments: The en­tre­pre­neur­ial be­hav­iour and at­ti­tudes of in­di­vid­u­als, and the na­tional con­text and how that im­pacts en­trepreneur­ship. The in­for­ma­tion gath­ered and care­fully an­a­lysed by lo­cal GEM re­searchers al­lows a deep un­der­stand­ing of the en­vi­ron­ment for en­trepreneur­ship and pro­vides valu­able in­sights for pol­icy and prac­tice.

TWO TOOLS FOR TRACK­ING

The Global En­trepreneur­ship Mon­i­tor uses two tools to track rates of en­trepreneur­ship across mul­ti­ple phases of en­tre­pre­neur­ial ac­tiv­ity and to as­sess the char­ac­ter­is­tics, mo­ti­va­tions and am­bi­tions of en­trepreneurs and ex­plore the at­ti­tudes so­ci­eties have to­wards en­trepreneur­ship. Those two in­stru­ments are the Adult Pop­u­la­tion Sur­vey (APS) us­ing a ran­dom sam­ple be­tween the ages of 18 and 64 years, and the Na­tional Ex­pert Sur­vey, which in­ter­views ex­perts in the field. And what is the data telling us? Ja­maicans are on top of the world when it comes to re­spect for en­trepreneur­ship and the will­ing­ness to get into the busi­ness; 85 per cent of us see start­ing a busi­ness as a de­sir­able ca­reer choice, putting us in se­cond po­si­tion. Suc­cess­ful en­trepreneurs are highly re­garded. And peo­ple strongly agree (87 per cent) that in the me­dia here, they of­ten see and hear sto­ries about suc­cess­ful new busi­nesses. But the best is that 84 per cent of Ja­maicans be­lieve that they have the re­quired skills to start a busi­ness, plac­ing us at num­ber two. Fear of fail­ure is low, and a ro­bust 38 per cent in­tends to start a busi­ness over the next three years. I’m a lit­tle wor­ried, though, by the non-dis­tinc­tion be­tween mere self­em­ploy­ment and gen­uine en­trepreneur­ship. A large num­ber of Ja­maicans are pre­pared to do a lickle buyin’ and sellin’, fishin’, plantin’, pro­vid­ing a ser­vice, even a pro­fes­sional ser­vice, or what­ever, out of ne­ces­sity or op­por­tu­nity with nei­ther the in­ten­tion nor the skill to es­tab­lish and run a real busi­ness that has struc­ture and can em­ploy oth­ers and grow. This may be a clas­sic case of aca­demic re­searchers and re­spon­dents to their sur­veys speak­ing dif­fer­ent lan­guages.

We know from the global data that eco­nomic down­turns like the re­ces­sion which started in 2008 drive up the TEA, the To­tal Early-Stage En­tre­pre­neur­ial Ac­tiv­ity. TEA mea­sures the per­cent­age of the adult pop­u­la­tion that is in the process of start­ing or have just started a busi­ness. The Ja­maican TEA spiked at 22.7 per cent in 2009 and is now around 10 per cent.

En­try into en­tre­pre­neur­ial ac­tiv­ity is about as much driven by ne­ces­sity (47 per cent) as by op­por­tu­nity (50 per cent) in the Ja­maican econ­omy, with its high un­em­ploy­ment and un­der­em­ploy­ment and low-in­come con­di­tions; 97 per cent of Ja­maican house­holds have a com­bined in­come of un­der $3 mil­lion.

The brash con­fi­dence for en­trepreneur­ship is tem­pered by the harsh re­al­i­ties of what the GEM re­searchers de­scribe as the “en­trepreneur­ship ecosys­tem” that web of sup­port that busi­nesses need to thrive, from gov­ern­ment bu­reau­cracy to avail­abil­ity of credit. GEM is pick­ing up low lev­els of us­ing new tech­nol­ogy, weak in­no­va­tion, weak links to re­search, weak ed­u­ca­tion and train­ing sup­port, low ex­port lev­els as a pro­por­tion of busi­ness sales, and weak and slow growth for new busi­nesses mea­sured as adding jobs.

A par­tic­u­larly trou­bling find­ing is the low level of in­trapreneur­ship, the de­vel­op­ment of new prod­ucts and ser­vices within ex­ist­ing firms from tap­ping em­ployee in­no­va­tion; 95% of em­ployed Ja­maicans say they have not been in­volved in the de­vel­op­ment of any­thing new over the last three years.

De­spite the up­beat launch of the GEM Ja­maica Coun­try Re­port for 2016-2017, I am forced to draw the down­beat con­clu­sion that while en­tre­pre­neur­ial in­ter­est and en­ergy may be high among the pop­u­la­tion, ex­cep­tion­ally high – the skills, op­por­tu­ni­ties and con­di­tions for start­ing – sus­tain­ing and grow­ing new busi­nesses are way back on the poorer side. This must pro­duce el­e­vated lev­els of fail­ure in an al­ready risky field.

If Gov­ern­ment, fi­nan­cial in­sti­tu­tions, re­search academia, and other play­ers in the field, gath­ered in one lec­ture theatre for the launch of the GEM Re­port, can gang up against th­ese ob­sta­cles to stronger en­trepreneur­ship, the coun­try’s econ­omy would thank them for it – and grow.

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