BY: PETER KELLY
KINGSTON, Jamaica – (JIS) – It is oil tycoon J. Paul Getty, once hailed America’s richest businessman, who said that: “there is only one way to make a great deal of money and that is in a business of your own”.
And, it seems as if Jamaicans are buying into this notion, with some 391,000 persons owning businesses last year, making Jamaicans among the most entrepreneurial in the world.
As contained in the Global Entrepreneurship Monitor (GEM), which was launched by Minister of Industry, Technology, Energy and Commerce, Phillip Paulwell on July 4, “Jamaica has one of the highest levels of entrepreneurial activity as measured by the Total Early Stage Entrepreneurial Activity (TEA) with approximately 17 per cent of the adult population, at the time of the compilation of the report, actively planning or recently established a new business.”
The TEA index is a measure of the extent of small business activity in a country.
Jamaica’s overall rate of entrepreneurial activity, according to the document, in which compilers interviewed some 3,000 small business entrepreneurs and 36 established owners, compares favorably with countries such as New Zealand, considered among “the world’s entrepreneurial country.”
It further highlights that entrepreneurs in middle income countries like Jamaica are beginning to catch-up with their counterparts in richer economies by tapping into facilities such as an islandwide small business incubator project, made available to them just a year ago.
“This is good news for Jamaica and we have to continue to place tremendous focus in this area, because if we are going to create wealth, it is through entrepreneurship,” said Minister Paulwell.
The GEM is the largest annual measure of entrepreneurial activity worldwide. It was compiled by more than 150 scholars from 35 countries, including Jamaica, which, through the Technology Innovation Centre at the University of the West Indies, joined the consortium last year, becoming the first English-speaking Caribbean nation to so do.
Team Leader for GEM in Jamaica, Sandra Glasgow, says that Jamaicans are not starting small businesses out of need, but out of the opportunities, which arise.
“This shows that although the economic climate is a bit harsh, many people are making ends meet, and legally as well,” she notes.
According to the report, Jamaicans are innately creative, finding shrewd but legal means of funding business start-up, including pooling resources, forging partnerships with international business chains, or simply selling items of food or clothing from the back of their cars.
Highlighting more key findings in the report, Mrs. Glasgow says that Jamaicans are more entrepreneurial than the Japanese, which have supplied the world with several brand name items. “We are actively involved in starting businesses. If you compare that with countries like Japan that has a low TEA index, it means that not a lot of people in these countries are starting businesses,” Mrs. Glasgow points out.
But while Jamaica ranks high in newly started businesses, the country ranks lower in terms of established businesses, with only nine per cent of businesses operating for more than three years and have paid wages to staff for more than three months.
“One of the significant indicators of economic development is how many of those new businesses that are starting become established businesses,” Glasgow points out.
Although many people are forging ahead with their own businesses, Mrs. Glasgow explains, many Jamaicans are unemployed, as these small businesses are not creating jobs. She notes while the research did not focus on this issue, with future GEM studies on the horizon, “we will have an opportunity to do that later on”.
Meanwhile, President of UTech, Rae Davis, says that, “one of the active objectives of GEM is to answer the question: ‘How does entrepreneurial activity contribute to national and international prosperity and to further address what governments can do to foster further entrepreneurial activity.”
Contained in the report are five recommendations to the government, which the GEM team believes will stimulate an upsurge in new business ventures.
First, the GEM team recommends that the government minimize the number of agencies that deal with the registration of businesses, stating that “if the key agencies are consolidated into one or two, this could significantly reduce the bureaucratic red-tape that frustrates entrepreneurs and leads them “underground.”
Presently, Jamaica ranks at 43 on the “ease of doing business” on the World Bank’s Doing Business Indicator.
“You still have to go through the income tax, general consumption tax (GCT), all of those, so a new business, registration is one thing but getting started with complying with taxes and other legal requirements, you might have to go to the Bureau of Standards [of Jamaica], the Kingston and St. Andrew Corporation (KSAC) et cetera,” Mrs. Glasgow tells JIS News.
