Based on a recent newspaper report, a discussion on entrepreneurship and innovation in the Caribbean.
In a recent panel discussion on Trinidad and Tobago based on the 2014 Global Entrepreneurship Monitor Report, some of the panellists, which included academics and business persons, expressed the view that due to the plethora of incentives and support available to local entrepreneurs, innovation has been lacking. Their solution:
... dispense with all the incentives and programmes supporting entrepreneurs if this country is to get the innovative entrepreneurs who will develop new products and lead to the diversification of the economy
(Source: Trinidad and Tobago Newsday)
Further, that view was substantiated by the observation that in having the current support schemes, Trinidad and Tobago entrepreneurs seem to be encouraged to develop “replicative-type activities which were merely copying existing businesses” (Source: Trinidad and Tobago Newsday).
The Global Entrepreneurship Monitor is considered a leading study on entrepreneurship worldwide. In the 2014 report, 73 economies were examined, including six in the Caribbean (Barbados, Belize Jamaica, Puerto Rico, Suriname, and Trinidad and Tobago).
Though the report focusses on entrepreneurship generally, almost 13,000 individuals, from the 6 caribbean countries included, participated in in survey. They would have represented a wide cross section of fields, including tech/ICT. Hence the findings and inferences being made, as a result of that report, could have implications to our area of focus: tech and ICT. the paragraphs below outline few considerations on entrepreneurship and innovation.
Limited availability to suitable financing
To rebut the above arguments, other panellists highlighted the limited avenues for financing available to entrepreneurs, especially for intangible products, such as software applications and online services. Banks and other funding institutions tend to be of the view that such ventures are high-risk, and frequently require considerable collateral – often exceeding the value of the loan – limit their interest to brick and mortar projects.
It therefore means that for entrepreneurs, who do not have substantial personal assets they could possibly lose, they may opt either not to pursue their envisaged venture and abandon it outright, or instead choose a path of lesser resistance and a “less risky” project. In the Newsday article, the claim was made that the absence of that kind of support has been driving the more innovative entrepreneur from Trinidad and Tobago, to other countries with better opportunities and environments that are more prepared to support and embrace innovation. This mass emigration, and the ensuing brain drain, is also evident across the region.
Society’s appetite for risk
Coupled with the conservative posture of funding institutions, across the Caribbean there is little tolerance for failure. There is still considerable stigma associated with bankruptcy, and there tends to be very little social welfare, or other similar structures, available to help cover basic living expenses whilst working on a project. In essence, most Caribbean entrepreneurs cannot afford to focus (almost) exclusively on the idea that they would like to nurture. Further, and perhaps more importantly, should they pursue their idea and fail, they would have lost considerable ground not only personally, but also professionally, which could affect the extent to which they can recover from taking a chance.
A change in culture
Although the panellists discussing the Global Entrepreneurship Monitor Report sought to argue that the incentives and programmes available to support entrepreneurs might be hampering innovation and fosters the replication of existing businesses, the issue might actually be deeper than that. Across the Caribbean, our education system still seeks to develop the “good and employable worker”. Innovation, breakthrough thinking and other similar concepts, are not encouraged. Tuition still follows an assembly line model, where individuality is frequently not fostered, and prowess is measured solely on on a one-size-fits-all testing format.
In summary, innovation does not happen overnight. It has to be nurtured, especially in societies like ours where, to varying degrees, individuality, or being different, is not embraced as a matter of course. That attitude is pervasive, and cannot be easily remedied by a series of quick fixes.
Image credit: Master Isolated Images (FreeDigitalPhotos.net)
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The same observations could – and have – been made about a host of countries in many regions of the world. With limited disposable incomes, people are reluctant to take risks whether the risk involved entrepreneurship or investment. For those wishing to pursue their dreams the crowd-funding approach comes closest to a solution. In fact, it often replicates tradition displaced by modern education and lending practices in many societies. The individual risk is relatively low while the return from even microfinancing can be high. Budding entrepreneurs and governments would do well to explore alternative funding models as they develop their business plans.
I think the last point in the article underscores a fact that we are all aware of but nothing is being done about. The environment we operate in has changed drastically over the centuries, especially in the last 3-4 decades.
And yet the education system has remained what it has always been ( to reuse the term ): “assembly line model”. Under such, it truly can only be by chance that entrepreneurs pop up, rather than by design.