Moving from Entitlement to Empowerment
Good morning ladies and Gentlemen. Let me start by thanking the organisers of this year’s T&T chapter of “Global Entrepreneurship Week” Youth Business T&T (YBTT) for inviting me to share with you, at this inaugural media launch, some thoughts on “Entrepreneurial Opportunities in our current Socio-Economic Landscape; particularly as it pertains to Young people.”
From the outset, I want to place on record that ours is an economy that is employment not entrepreneurship driven. Since independence, successive governments have implemented a singular “state led dependency model of development”.
Our people whether college graduates or high school dropouts, have an expectation of finding a job almost as an entitlement. And, with the largest contributor to our GDP (energy) generating employment for only 3 percent of the labour force, and other productive sectors not realising sufficient growth, people have looked increasingly to the state to provide employment. Papa state has not disappointed.
Yes there have been verbal articulations on the importance of private sector investment, diversification and in more recent discourses; creativity, innovation and entrepreneurship. But we have done little more than played children’s hop scotch with these things.
And so, courtesy state intervention in the labour market, we boast an official unemployment rate in Trinidad and Tobago of approximately 4 percent. Notwithstanding, youth unemployment and underemployment is closer to 20 percent, with female youth unemployment even higher.
And, of the 600,000 plus persons in the labour force, approximately 200,000 are employed in government “make work programs”, according to UWI economists. With youth featuring heavily in this figure through programs such as OJT, YAPA, MUST and even URP and CEPEP.
Economic good fortunes via oil and gas got us here.
Where will be one year, two years from now? Given:
- That the current declining fortunes from oil and gas
- Contraction in other labour intensive productive sectors; manufacturing, agriculture, tourism
- Employment cuts in the energy sector
- The negative recovery prognosis for oil and gas
- Lethargic growth in the global economy
All of this translates into a reducing capacity of the state to sustain its efforts at employment generation. Sadly, there are little expectations that employment opportunities will be readily available in other sectors, largely because we have not prioritised economic diversification beyond oil and gas.
The question then is, wherein lies the hope for the Youth of our nation? Is it in self-employment? Youth-Business? Youth- entrepreneurship?
Caricom Secretariat Secretary General, Ambassador Irwin La Rocque has expressed concern about the rising levels of youth unemployment. He concludes and rightfully so “that this shows a mismatch between the skills set that are necessary, and those being taught.” He goes on to offer a solution; that we must
“broaden offerings within our general education system to promote creativity and innovation,” Easier said than done.
Ambassador La Rocque is but one of a myriad of leaders- local and regional-, mouthing these very sentiments, but none of them have moved beyond words to creative and I dare say necessary intervention! And so, the youth is left to intervene on its own behalf. Youth Business T&T is clearly one such intervention. I salute you.
You see, youths, better than their elders, understand that it is more than educational reform to promote creativity and innovation and a matching of skills training to labour market needs that is required. They know that that will only get you a job when what you want is to be the generator of jobs!!!
In effect, education reform has to do more than capitalise on catch phrases made popular elsewhere, it has to start with the end in mind. If we want a different expectation from graduates then we have to set the required goal at the outset. To illustrate, you cannot train persons “to find a job in the labour market” and at the end of the training say, “go forth and be creative, be innovative, be an entrepreneur, start a business, when the training he received did not prepare him for such action” The natural born entrepreneur is a minority, a gem as rare as diamonds. The majority must be trained to become entrepreneurs. An innovator is not an entrepreneur. The entrepreneur is the one who sees the commercial value in the innovation and has the risk taking mind-set to press forth, prepared to fail and try again or hit the jackpot and try again with other ventures.
It is no wonder that Trinidad and Tobago has one of the lowest rate of new business start- ups in the world.
MSMEs are the bedrock of sustainable growth in most economies (In Trinidad & Tobago, SMEs numbered 18,000 in 2010, contributing nearly 28% to GDP and employing 200,000 persons (approx. 30 percent of the labor force). Of the total, 91% MSMEs in T&T, 75% are micro enterprises. We are not doing sufficient to grow this important business sector.
MSMEs suffer significant constraints; most notably financial. In Trinidad and Tobago only 11% of MSME start-up funding comes from the banking Sector while 70% comes from personal savings. The financial market is characterised by:
- high commercial bank interest rates,
- risk aversion by banks,
- perception of MSMEs as “high risk” and “unbankable”,
- investment costs higher than market costs,
- “buy and hold” culture in shares market,
- paucity of financial/accounting information on SMEs creating difficulty for banks to assess credit worthiness,
- high administrative or transaction costs of lending to SMEs due to small volumes and lack of economies of scale,
- a failed venture capital model,
- a heavily bureaucratic process to access Institutional guarantees and funding and
- a legislative model that is large business focused.
What do we do then? Throw our hand in the air in despair? I imagine many have done so. But choosing to be hapless victims is not the gumption that characterises entrepreneurs. So, as Trinidad and Tobago gets ready to participate in this year’s Global Entrepreneurship Week” : the world’s largest celebration of innovators and job creators who launch start-ups and bring ideas to market,” let us bring some ideas to market on how we can move the Trini-psyche from employee to employer, on how we can truly build an entrepreneurial economy:
- Education for entrepreneurship– Entrepreneurship education from secondary to tertiary level.
- developing sound business models
- studying the markets
III. assessing the risks involved their plan
- designing and implementing business continuity plans
- University reform; from pure research to applied research and commercialization
- Corporate venture capital initiatives (Social Corporate Responsibility
- Public venture Capital Fund managed by experienced entrepreneurs with strict accounting procedure
- Public crowd funding platform
These are but a few suggestions if implemented could go a long way in building a truly entrepreneurial society, thereby giving hope to our young people and incentivising them to be the champions of industry and sustainable economic development.