Education, Diversification and Development Challenges For Trinidad and Tobago:

Insights from a study that combines data from the Global Entrepreneurship Monitor database and the Global Competitiveness Report of the World Economic Forum for

Trinidad and Tobago.

Henry H. Bailey1,2 PhD, Balraj Kistow1 DBA. 1Arthur Lok Jack Graduate School of Business,

2HEU, Centre for Health Economics, The University of the West Indies.

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Presentation Outline • WEF Study: Overview and Key Findings

• GEM Study: Overview and key Findings

• Education, Diversification and Development

• Insights from the combined reports: – Innovation

– National culture

– The institutional framework

– Recommendations

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The Global Competitiveness Report

• Produced by the World Economic Forum

• Based on the Global Competitiveness Index (GCI)

• Captures information on the micro and macro economic foundations of national competitiveness.

• Data from public sources (MLAs etc) and survey of 151 people drawn from business & academia.

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GCI - Implied Framework

National

Competitiveness

Firm Competitiveness

Enabling Environment

Firms compete- not nations. Government largely responsible for the raw conditions

Competitiveness: “The set of institutions, policies, and factors that determine the level of productivity of a country.”

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Global Competitiveness Report 2016-2017

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GEM Overview:

• Not for profit academic research consortium

• Mission: Contribute to economic development through entrepreneurship.

–Research that: • Measures the level and characteristics of entrepreneurial

activity within & across countries

• Identifies the principal factors which encourage or hinder entrepreneurial activity

• Provides guidance for formulation of effective & targeted policies to improve the quantity & quality of entrepreneurial activity.

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Global Entrepreneurship Monitor:

• Largest Study of entrepreneurial activity in the world.

• Unique Dataset: – Focus is on the individual, as opposed to firms

• Perceptions, Aspirations, Intent

• Includes informal sector

• Captures pre-launch activity

– Harmonized Approach to measurement and reporting • Allows for meaningful comparison between countries

• Independent of local registration requirements & norms

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Key Instruments

• APS

– Minimum 2000 Adults

– Entrepreneurial perceptions, aspirations, attitudes, intentions

– Perceived opportunities, barriers, capabilities, fear of failure.

• NES

– 36 Experts

– Framework / Entrepreneurship Environment:

• Gov’t policies, programmes, infrastructure, culture etc.

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Attitudes and Perceptions

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Performance : 5 yr Projected Growth and Job Creation

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14%

48%

25%

13%

32%

38%

19%

11%

0%

10%

20%

30%

40%

50%

60%

No Jobs 1-5 Jobs 6-19 Jobs

20+ Jobs

TEA Established Business

Performance : Int’l Orientation

61%

32%

6% 1%

64%

34%

2% 0% 0%

10%

20%

30%

40%

50%

60%

70%

None Under 25%

25 - 75% More Than 75%

TEA Established Business

• The GEM Model: Performance on 3 Key Dimensions: – Growth Potential – Export Competitiveness – Innovation

0% 20% 40% 60% 80% 100%

New product market combination (customer, competitor)

Active in technology sectors (high or medium)

Product new to all customers

Product new to some customers

Product new to no customers

No businesses offer same product

Few businesses offer same product

Many businesses offer same product

Uses very latest technology (only available since last year)

Uses new technology (1 to 5 years)

Uses no new technology

Performance: Innovation

14 TEA Established Firms

0% 20% 40% 60% 80% 100%

New product market combination (customer, competitor)

Active in technology sectors (high or medium)

Product new to all customers

Product new to some customers

Product new to no customers

No businesses offer same product

Few businesses offer same product

Many businesses offer same product

Uses very latest technology (only available since last year)

Uses new technology (1 to 5 years)

Uses no new technology

GCI on Innovation

• Availability of professionals produced by tertiary education system, but low capacity to innovate.

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R&D Transfer GCR:

– Level of innovation is reduced by low level of collaboration between academia and industry: Exec survey: both sides ‘blame’ the other !

0% 25% 50% 75% 100%

New technology, science, and other knowledge are efficiently transferred from universities and public …

New and growing firms have just as much access to new research and technology as large, established firms.

New and growing firms can afford the latest technology.

There are adequate government subsidies for new and growing firms to acquire new technology.

The science and technology base efficiently supports the creation of world-class new technology-based ventures in …

There is good support available for engineers and scientists to have their ideas commercialized through new and …

Completely False Somewhat False Neither True nor False Somewhat True Completely True

GEM

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Goods Markets

0% 25% 50% 75% 100%

The markets for consumer goods and services change dramatically from year to year.

The markets for business-to-business goods and services change dramatically from year to year.

New and growing firms can easily enter new markets.

New and growing firms can afford the cost of market entry.

New and growing firms can enter markets without being unfairly blocked by established firms.

The anti-trust legislation is effective and well enforced.

Completely False Somewhat False Neither True nor False Somewhat True Completely True

GCR

GEM

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Insights: Institutional Framework

• GCR:

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The Education System

• The Education System contributes to innovation, diversification and development in several ways: – Develops Human Capital

– Standards for training/accreditation

– Directs R&D activity

– Influence on the evolving society: • Sociological & social dynamics

• Norms, expected behaviours; culture

• Attitudes towards work, entrepreneurship/career

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Education

0% 25% 50% 75% 100%

Teaching in primary and secondary education encourages creativity, self-sufficiency, and personal initiative.

Teaching in primary and secondary education provides adequate instruction in market economic principles.

Teaching in primary and secondary education provides adequate attention to entrepreneurship and new firm creation.

Colleges and universities provide good and adequate preparation for starting up and growing new firms.

The level of business and management education provide good and adequate preparation for starting up and growing new firms.

The vocational, professional, and continuing education systems provide good and adequate preparation for starting up and

growing new firms.

Completely False Somewhat False Neither True nor False Somewhat True Completely True

GCR GEM

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GEM: Profile of the Entrepreneur

13.0%

28.4% 31.0%

18.4%

7.7%

1.5%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

18-24 25-34 35-44 45-54 55-64 65-99

Age breakdown of TEA participants

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Insights: Government in the Economy

• GCR:

– Private sector distracted by allure of gov’t contracts.

• GEM:

– “Low hanging fruit” in replicative and gov’t contract businesses.

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National Culture

• T&T: Low capacity to innovate (GCR & GEM).

• Question: Where does this problem lie? – Do we possess:

• Imagination to innovate?

• Technical skill to innovate?

• Hofstede & Hofstede (2005). T&T: – Low Uncertainty Avoidance:

• Great for creativity

• Bad for implementation

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Recommendations

• Recognize the barrier to diversification brought about by low hanging fruit: – Gov’t contracts

– Transfers

– Opportunities for replicative businesses

• Initiatives to overcome this: – Refocus incubator & support programmes to high

growth, potentially export competitive, innovative firms.

• Agencies to support entrepreneurship: – Streamline- eliminate ‘competition’ and duplication.

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Recommendations

• Profile of the entrepreneur:

– Examine the incentives that actually—or can potentially divert activity away from innovative, high growth potential endeavours.

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Recommendations

• Recognize the strengths and weaknesses of T&T in the innovation chain.

• Use institutions to: – Harness the creativity & ingenuity of the people

– Channel this towards developmental, productive enterprise.

Thank You !

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