Enabling Entreprise

8/8/2019 Enabling Entreprise

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ENABLING

ENTERPRISE



1. INTRODUCTION

The vision for Enterprise

1.1 The ‘Te Kaveinga Nui’ (the long-term visionary framework of the Cook Islands)

foresees that by the year 2020, the Cook Islands will have achieved (Strategic Outcome

3), “Sustainable economic growth in harmony with our social values, culture and

environment”. Furthermore, the Cook Islands National Sustainable Development Plan2007-2010 (Strategic Goal 3) aims for an “Innovative and well-managed private sector

led economy”. The challenge for the Cook Islands is therefore to mobilize resourcestowards the achievement of the above goal and outcome.

1.2 In today’s modern global economy, the Cook Islands are disadvantaged becauseof its their size, fragile environments and distance from markets. However, if we are to

survive in the modern global economy, we must change our mindset and view our

disadvantages as factors that challenge us to be much more innovative in everything thatwe do.

1.3 Since the Economic Reform Program of 1996, our economy has become one that

is private sector-ledhas become more and more pivate sector-led. Small and MediumEnterprises (SMEs) account for much of the enterprises activitye in the Cook Islands, and

they have formed the base for our private sector-led economy by creating incomes,

employment and growth.

1.4 The Cook Islands have enjoyed solid rates of growth during the period 2000 –

2007 driven primarily by tourism. However, it is inevitable that the current globali i ill h i ifi i li i i i d d



Enterprise enablers

Culture: Develop a culture where talent can be unlocked and flourish, reducing the

fear of failure that prevents start-ups and giving Cook Islanders the opportunity to beentrepreneurial.

Knowledge and Skills: Ensure that individuals and business have access to and are able to develop the best possible knowledge and skills to support their business.

Access to Finance: Enable new and growing businesses and those people seeking toexploit their ideas have access to appropriate levels of finance and advice.

Regulatory Framework : Renew our focus to ensure that the regulatory environment

does not stifle or disadvantage small and medium business.

Business Innovation: Reinforce innovation’s role as a driver of enterprise itself

and at the root of all entrepreneurial activity, to complement the National Economic Development Strategy.

Ambition of the SME Strategy

1.7 This sStrategy document presents important policy priorities relating to these

inter-related enterprise enablers, which will have a materially positive impact on business

in the Cook Islands. The enablers will shape the future priorities of the Business Tradeand Investment Board (BTIB) and other Government agencies that foster economic

development. In future years, the successful delivery of this strategy will see:



• The need for equity finance

• A small and fragmented market

The Business Trade and Investment Board (BTIB) (a merger between the Development

Investment Board and Small Business Enterprise Centre) was established to provide

support to address these constraints. The BTIB is mandated to promote, encourage andsupport Cook Islanders in trade, investment and business. An Outer Island Development

Grant Fund (OIDGF) co-funded by the Government and NZAID is one of the SME tools

being used to assist Outer Islands enterprise development.

Promoting enterprise - a framework for Government

1.9 Government recognises that economic growth is created generated by the actions

of businesses. While it is not the role of government to duplicate or substitute for private

sector activity, there is an important role for targeted interventions to overcome marketimperfections to ensure that the market can deliver the best best social outcomes.

1.10 A country’s enterprise performance depends on a multitude of underlying factors.This framework brings these factors together and groups them within five separate, but

closely inter-related themes or ‘enablers’; Culture, Knowledge and Skills, Access to

Finance, Business Innovation and Regulatory Framework. It draws on many importantcontributions to academic literature on entrepreneurship, and the experience of many

other countries both regionally and internationally. Links between the enablers of

enterprise and the drivers of productivity are shown in Figure 1.1.

Figure 1.1



stakeholders that a simple more coherent strategic framework is required – one that is

meaningful to businesses and also to the relevant agencies responsible to delivering

enterprise policy objectives.

1.12 The enablers and enterprise are driven by market demand. Market research,

information, access, promotions, opportunities and skills are critical to the SMEdevelopment cycle.

1.13 The enablers will provide a new focus for how we think about the development of enterprise policies as well as informing our priorities in the same way that the five drivers

of productivity will continue to inform our broader productivity policies. We believe thefollowing enablers are key to delivering our enterprise vision.



2. A

CULTURE OF ENTERPRISE

Vision“A lot of our people are akama [embarrassed] or they think that they can’t go into

business even though they may have talent or good ideas. They think people will aviri

[mock] them and that’s just the way we are…. We have to change the way we think and

get rid of the akama and the aviri.” (46 year old female, Rarotonga)

The Government’s vision is for many more people in the Cook Islands to have the

opportunity, aspiration and motivation to use their talent and initiative to be

enterprising and have an increased proportion of people starting business.

The Government will work to develop an environment in the Cook Islands where

attitudes to and aspirations about enterprise, are based on accurate information and

relevant role models and not on myths that lead to misplaced risk aversion.

Progress to Date

There has been very little work done in the Cook Islands on targeting ‘a culture of

enterprise’.

Very little formal data is collected and analysed on entrepreneurship and aspirations

to entrepreneurship.

Likewise very little formal data is available on aspiration for business growth.

Next Challenges Very recent surveys indicate that while many people aspire to start business few of

them feel confident enough to turn these aspirations into reality.

The concept of ‘a culture of enterprise’ is a new one for the Cook Islands.



THE GOVERNMENT’S VISION

2.1 The gGovernment’s vision is for many more people in the Cook Islands to havethe aspiration, opportunity and motivation to use their its talent and initiative to be

enterprisingentrepreneurial, whether expressed through starting or growing a business.

2.2 Our young people are our future and Government efforts to put in place activities

around enterprise aspiration and motivation to encourage many more young people to

start business is needed.

2.3 The Cook Islands must have a great environment in which to start and grow a

business. Currently, as of 25 November 2008, there have been 72 new businesses

registered for value added tax (VAT). This has declined over the past three years, whenin 2005, total new business registrations for VAT were 123.

2.4 The GovernmenGovernmentt will work to develop an environment in the Cook Islands where attitudes and aspirations around enterprise are based on accurate

information and relevant role models and not on myths that lead to misplaced risk aversion. Success will be measured through a greater proportion of people with theambition to start and grow a business. This is measured through early stage enterprise

activity (the number of businesses less than three and half years old is a good proxy for

wider enterprise culture) and aspirations captured by new business surveys.

2.5 Other chapters will set the importance of equipping individuals with the capability

and skills and other resources to undertake enterprising activities. They will explain the

policy stance that Government wishes to undertake to encourage a supportiveenvironment for enterprise, to promote innovation as a core enabler of enterprise, to

enhance access to finance for entrepreneurs and to develop a supportive regulatory and

legal framework.



businesses and encouraging the flow of new ideas, innovation and competitive challenge.

Building positive aspirations for enterprise remains a challenge.

2.9 There are two aspects to this:

• individuals in the Cook Islands do not appreciate the returns or opportunities from

enterprise and overstate the likelihood and consequences of failure; and

• Society does not fully value entrepreneurial success and tends to over stigmatise

failure.

The fear of failure

2.10 Fear of failure is clearly linked to the extent to which people are risk adverse. Insurveys and consultations conducted many believe that a new business should not be

created if there is a risk that it might fail.

2.11 There is clear evidence that risk aversion is based on misconceptions about the

risk inherent in starting a business. Surveys conducted suggest there is a perception thatthe majority of businesses fail in the first year.

2.12 Role models can shape what people understand in terms of the opportunities andrisks in enterprise. They are key in influencing whether someone capable of starting an

enterprise actually does. This is especially so for young people and those in communities

where enterprise is not the norm. Research elsewhere has demonstrated that young people with parents involved in running a business are twice as likely as the average for

young people to start a business. Personally knowing an entrepreneur increases the

likelihood of having a suitable role model.

2.13 The literature on fear of failure or risk aversion often relates to starting a business

but the challenge is much wider than this. It impacts on the growth performance of

businesses.



• Inspiring young people

• Reaching those with low aspirations and unlocking their talent

• Addressing the environment that shapes fear of failure

Inspiring young people

2.16 The Government’s objective is to develop an environment where our people can

better understand the risks and rewards of enterprise based on accurate information and

not on unfounded myths. This can be pursued in many ways, but key to the Cook Islandssuccess is to develop a broader outlook and more positive aspirations at an early age.

2.17 The reality for the future generation of entrepreneurs is that in a global economyopportunities are increasingly less constrained by country national boundariesborders.

Government therefore will explore and promote the avenues by which young people can

connect with activities around the world to encourage them to see enterprise opportunitiesat an early stage in their lives.

2.18 Building on the success of Careers Week that has been run annually, where

students are exposed to various career choices, the gGovernment proposesEntrepreneurship Week in which it is hoped that young peoples’ entrepreneurial talent

and ideas will be celebrated.

2.19 Government will also support the establishment of a pilot programme to offer mentoring and work placements in SMEs. This is being developed in direct response to

suggestions from the community that it would benefit entrepreneurs who are targeting

new markets for business.



aspirations have become entrenched. Promotion of assistance available will be a priority

for Government.

Addressing the environment that shapes fear of failure

2.23 The institutional framework of government may seem a world away fromenterprise aspirations, but people pick up signals from its operation that shape their

perceptions around risk and failure. It is within government’s control to influence this.

2.24 It is generally accepted that the environment for business development must be a

‘level playing field’. The concept of ‘level playing field’ is about fairness, not that each player has an equal chance to succeed, but that they play by the same set of rules. In the

Cook Islands, we have unique characteristics that challenge the concept of ‘level playingfield’ and require that government interference is required to bring about fairness. This is

particularly true in the case of outer islands. Government will consider ways that will

encourage the development of enterprise in the outer islands, whether this is by means of reviewing Government employment policies and taxation policy to create a more

conducive environment for enterprise.

FUTURE ISSUES

2.25 In the longer term, the Governmengovernmentt will make sure that progress we

make with young people, especially girls and women feeds through to other sections of society, particularly those in the Oouter Iisland s and girls and women. So that people

have an understanding of the different approaches to business. This will ensure that they

seize opportunities, commercialise bring ideas and innovation to fruition, and build productive business relationships. The gGovernment will work with a range of partners

to foster an enterprising spirit in everyone.



Culture: Key initiatives proposed

The initiatives proposed to tackle the remaining challenges and embed culture more

widely are:

Explore and promote avenues for young people to connect with enterprise activities

around the world.

Establish an Entrepreneurship Week.

Establish pilot mentoring and work placement in SME programmes.

Work with other key stakeholders to build on enterprise promotion.

Develop strategies for encouraging participation in enterprise.

Consider ways to create a more conducive environment for enterprise with

particular attention to the outer islands.

Strengthen the capacity of BTIB to facilitate, coordinate and support the SME

development.



3. K NOWLEDGE AND SKILLS

3. K NOWLEDGE AND SKILLSVision

• The gGovernment’s vision is for many more people in the Cook Islands to have

the enterprise skills to successfully start and grow a business and for businesses

to be able to access the skilled workforce they require to grow.

•

Success will be understood through surveys conducted by BTIB of peoplebelieving that they have the skills to start a business and the delivery of

training programs.

Progress to date

• Over the past few years, the Ministry of Education, has implemented programmes

focused on enterprise education namely, the Life-skills projects in the Outer Islands,

Transition Programme in Rarotonga and Community Education in the Northern Cook

Islands.

• Department of National Human Resource Development is implementing NCEA

accredited programmes targeting the improvement of skills and training in hospitality

and trades.

• Business Trade and Investment Board have over the past years conducted a number of

training programs targeting business development and management.

Next Challenges

•

Providing adequate business support• Providing enterprise education for young people

Strategy



Access to support that is relevant and appropriate to the needs of business must also be

provided. Government will gauge success across a range of programmes through a broad

range of measures that monitor performance.

PROGRESS SO FAR AND FURTHER CHALLENGES

3.3 Government recognises the importance of enterprise knowledge and skills. It has

in place programs in a number of key areas:

• Enterprise education in schools and colleges;

• Business support, advice and mentoring;

• Improving education and skills in the workforce.

However, it is acknowledged that more action is required in these areas.

Enterprise education in schools and colleges

3.4 The earlier that children are introduced to enterprise, even in the most general

sense, the more receptive they are. Government is committed to improving the level of enterprise education, particularly at secondary level and will develop the EnterpriseEducation Framework and create robust programs that will teach our children

entrepreneurial skills.

Business support advice and mentoring

3.5 Whilst there is business advice and skills training available, the provision of these

services has been rather sporadic due to both human and financial capacity issues. BTIB

is the gGovernment’s primary access channel for business support. Yet due to capacityconstraints it has not maximized its performance in the delivery of business support

advice and mentoring services. It has been difficult for businesses to assess the benefits

of well-tailored advice and support This has implications on the business or



GOING FORWARD: PROMOTING ENTERPRISE SKILLS AND KNOWLEDGE

3.8 Government’s challenge over the next ten years is to build on investment that has

begun and further foster and support the development of enterprise skills and knowledgein the wider education system. Alongside thisIn addition, the gGovernment is committed

to strengthening the ability of businesses to access the support and skills development

they needrequired. Mentoring will play an enhanced role.

Enterprise education in schools and colleges3.9 Building a successful enterprise economy starts with children in schoolsthe youth.

Government will be working towards making young people more aware of theopportunities that exist and more motivated to engage in enterprise.

3.10 The gGovernment is committed on the development of programs that will embedenterprise education into the mainstream by:

• Extending enterprise education across the whole school system and embedding it in thecurriculum;

• Promoting self-employment as a career option.

Business support, advice and mentoring

3.11 Improving enterprise education in our schools and the entire education system

will provide the platform for the future success of our businesses. But Nevertheless, thisneeds to be complemented with measures targeted at businesses, a focus on mentoring

and access to wider business support.



Improving education and skills in the workforce

3.15 The Cook Islands currently lacks a systematic approach to the human resources

development. Government will be actively working towards a systematic approach toidentifying employment and skills needs and the qualifications required to meet these

needs. A key element in accomplishing this will be to embed enterprise in the National

Human Resource Development Strategy and provide skills and training programmes thatmeet the needs of enterprise.

LOOKING AHEAD: THE CHANGING LANDSCAPE OF BUSINESS SUPPORT

3.16 Improving enterprise knowledge and skills development provision will ensure thatkey building blocks of a successful economy are put in place and the measures outlined

in this chapter will contribute to the delivery of this. However, there remains challenges.Going forward we will need to respond to changing needs, engagement and learning

preferences of our business community. Government will also embrace new media and

technologies to better address the needs of businesses.

Knowledge and skills: Key strategies

• Extending enterprise education across the whole school system and embedding it

into the curriculum.

• Promoting self-employment as a career option.

• Develop a robust mentoring program.

• Offer accredited skills and training programmes that meet the needs of enterprise.

P i h d l f i kill d k l d f l i h





Islands, barriers to accessing finance persist. Over the past years, Government has taken

steps to help businesses get better access to finance through a range of services such as

financing advice, preparation of business plans, etc and so forth. Government realizesthat it in addition to providing these services, businesses must also make themselves more

‘investment ready’ for potential investors.

PROGRESS MADE SO FAR

4.2 Whilst local banks have generally been supportive of business there remain

barriers for some small viable businesses that require finance to start and grow. The fact

that some businesses do not obtain finance is not in itself an indication of failures in thefinancial markets but rather banks acting rationally in not providing finance to some

business proposals. This means that some good business proposals find it difficult toaccess finance because of bank’s use of collateral, financial track record and cost of due

diligence to access risk for small businesses.

4.3 In the case of the outer islands, there is a general reluctance to support business

start-up. The OIDGF provides an avenue for business to start up in the Oouter Iislands.

BRIDGING THE FINANCE GAP

4.4 Consultations with the public have indicated that targeted interventions should not

be limited to the Oouter Iislands only, but also include Rarotonga. Research has shownthat publicly backed equity funds have become an extremely important source of capital

for SMEs. These funds provide a complimentary role to the private sector in the

provision of equity finance.

4.5 Examples from abroad also show that the gGovernment can also use the tax

system to provide an additional incentive for investment in early stage and growth of



4.8 Some smaller businesses do not know how to turn their business proposals into

attractive investment opportunities. Furthermore, there is also a reluctance of ceding

ownership to second parties.

4.9 The Government wants to ensure that all businesses understand the full range of

ways in which finance and investment can be sought and raised. It also wants businessesto be better able to engage a range of finance providers to successfully fund their business

development; in other words to be ‘investment ready’.

Ensuring business support is tailored to the needs of business

4.10 Future government interventions need to respond to the need of businesses. Akey challenge for the gGovernment is to respond to the different requirements of:

• Businesses that are high growth

• Businesses that more modest in their growth ambitions

• Business in the outer islands, which require a different set of supporting

measures.

4.11 This requires a holistic view of how various publicly funded measures can interactwith private sector provision across the supply of finance, advice and other resources for

business.

GOING FORWARD

4.12 Over the next ten years, the gGovernment will focus on ensuring thatentrepreneurs and businesses continue to have access to the finance and investment they

need and have the necessary skills and confidence to make their businesses investment

ready



Access to Finance: Key initiatives

• Strengthen and tailor OIDGF to better meet the needs of entrepreneurs in the outer islands.

• Explore the development of other funding mechanisms for entrepreneurs that

experience difficulties in accessing finances for business start-up.

• In collaboration with banks, provide free, confidential and independent advice to small

business with cash flow or debt problems.

• Develop a strong framework for delivering finance and investment readiness advice and

support.



5. R EGULATORY FRAMEWORK

“…Private Sector development is the responsibility for all of Government…

entrepreneurship comes with the right environment….” (Steve Anderson, President, Cook

Islands Chamber of Commerce)

Vision

The gGovernment’s vision is for the Cook Islands regulatory environment to encourage

and enable enterprise activity, whether expressed thorough encouraging start-up or

growth, whilst continuing to protect consumers, employees’ rightss and the environment.

Progress to date

The Cook Islands enjoys the reputation of having an unrestrictive regulatory

environment.

Next Challenges

Recent developments in the Cook Islands have highlighted the need the need to put into

place a more robust regulatory framework that not only encourages enterprise, but alsoprotects consumers and employees.

Strategy

Government will identify, simplify or abolish unnecessary regulation.

Businesses will be able to place greater reliance on official guidance, particularly

around employment regulations.

Businesses will have much clearer information so that the anticipated benefits of

regulation are realized more effectively. Government agencies will constantly and moreeffectively examine whether small businesses can be exempted from new regulatory

requirements or be subject to a simplification of enforcement.



5.3 As societies develop and become wealthier, the public tolerance of risk tends to

fall. Rising expectations of standards of goods and service means there is a growing

demand for regulation. Sometimes those calling for more regulation overlook the potentially negative effects on the economy, especially in terms of cumulative cost.

5.4 Alongside the benefits it brings, regulation imposes costs, particularly on business. These costs can be irritants for managers, owners and employees because of

the process required by regulation. In addition to the straightforward financial cost of

compliance can impact negatively on business, especially small businesses.

5.5 In addition to promoting market efficiency, and putting in place necessary protections for consumers and employees there are other circumstances where it is right

for Government to regulate – for example, to protect the environment. The challenge for Government is to strike the right balance. To help assess the advantages and

disadvantages of acting and to improve the quality of regulation, there is a need for a

robust impact assessment system. Impact Assessments will enable Government to ensuredecision making to be informed by an assessment of costs and benefits of acting.

PROGRESS TO DATE

5.6 The Cook Islands acknowledges the importance of the regulatory framework in

enabling enterprise, particularly in relation to the protection of the consumer andemployees.

5.7 The Development Investment Act 1995-96 promotes investment in the Cook Islands and regulates the direction and scope of foreign investment.

5.8 It is hoped that the Consumer Guarantee Bill and Fair Bill will be passed by



also focus on make certain that any new regulation shall not add unreasonable burden to

business.

5.12 Businesses often find the details of regulation complex and difficult to

understand. Good guidance that leads to understanding and compliance to regulation is a

must. Surveys indicate that provision of guidance, setting out in clear and simplelanguage what their business has to do to comply with a given regulation is very

important.

GOING FORWARD

5.13 Tackling outdated, redundant regulation is an important part of building anenabling regulatory framework. Businesses should see the real change in how regulation

applies to them.

5.14 Government has already begun steps to putting into place a more robust

legislative and regulatory framework. It is anticipated that by the end of 2009, the

Consumer Guarantee Act; Fair Trading Act, Employment Relations Act will be passed byParliament.

5.15 Government is also examining how best to approach the issues of encouraging

competition and minimizing monopolistic situations, bankruptcy and, price control.and so forth.

5.16 Most regulation is designed to change behaviour and can only be successful if those affected understand what is required, and whywhat of them is required. If business

is not given clear guidance, then compliance is likely to be low. Government will

improve guidance and also channels of guidance more consistent and streamlined, and



5.19 The gGovernment will need to continuously monitor not only the regulatory

compliance but also the impact on businesses in light of changing global economic

environment.

Regulatory Framework: Key proposals

• The Government will ensure that the Cook Islands business regulatory framework

promotes competition, innovation, investment; and protects consumers and

employees; through the passing of appropriate legislations and regulations.

• Before passing legislations and regulations relating to enterprise, the gGovernment

will conduct and impact assessment of the cost and benefits of action. Government

will put into place a robust impact assessment system.

• Outdated and redundant legislation and regulations will be reviewed such as thePrice Control Act.

• Together with the Law Commission Government will examine issues of monopoly,

mergers, bankruptcy with the view of putting in place mechanisms that bestaddresses these situations.

• Improve guidance and awareness requirements and effects of compliance tolegislation and regulation.



6. BUSINESS INNOVATION

Vision

• The gGovernment’s vision is to create an environment in the Cook Islands in which

innovation can flourish and where businesses identify and capture the benefits of their

innovation.

Progress to date

• Government policies have focused enough on innovation as a key enabler of enterprise.

To promote innovation vigorously is a new dimension in the gGovernment’s approach tobusiness development.

• Businesses that survive in the Cook Islands do so because they are innovative in the way

that they operate and the products they offer.

Next Challenges

• The focus on innovation as an enabler of enterprise has not been fully harnessed in the

Cook Islands. Yet it is key to diversifying the economy and for business survival in such

a small economy. The challenge is how to embed innovation into our business culture.

StrategyThe gGovernment’s approach for business innovation will target:

• An increase in the proportion of SME turnover due to new or significantly improved

products.

• Businesses increasingly looking externally to find ideas at each stage of development.

• Innovative firms – and increasingly service-based businesses – playing a greater role in

international markets.



KEY CHALLENGES AND OPPORTUNITIES

6.4 The tourism sector remains at the heart of our economy. A thriving tourismsector is essential for employment and for the economy. But as with other sectors,

tourism operators need to improve their competitiveness in order to succeed in the

tourism marketplace. Success depends not on only cutting costs, but on continuallycreating goods and services that people want to buy, using innovation, investment and

good business practice.

6.5 We have entered a period of fundamental change in our economic environment –

the impact of global issues has facilitated the need to be more innovative. For the Cook Islands, climate change and the need to ensure sustainable development have also

become significant drivers of business innovation.

6.6 Innovation is becoming an increasingly global process. The Cook Islands must

start taking innovation seriously if it is to survive in the global market place.Undoubtedly, our size, isolation, small population presents us with seemingly

insurmountable challenges particularly when taking into account the challenges of global

competition.

6.7 However, if the gGovernment can ensure macroeconomic stability; an open and

competitive market; invest in people and knowledge; ensure that the infrastructure to

support development; we have the potential to unlock our people’s talents and beinnovative.

6.8 New technologies are providing huge opportunities to support innovation. Thegrowth of broadband and the convergence of communication technologies and new

information technologies are transforming the way products and services are developed

and marketed all over the world. They are also enabling the development of completely



6.12 Government will put together a cCommittee that will have a key role in

supporting innovation in the Cook Islands. This committee will bring together key

players and partners ( public and privateGovernment and Business) to look at major societal challenges and market opportunities with a view of increasing business

investment and innovation.

6.13 Business needs innovative people with skills and entrepreneurial drive. The

gGovernment has a unique and essential role in supporting business innovation by

ensuring that there will be a stock of science, technology, engineering and mathematicsgraduates and a flexible labour market for them to enter.

6.14 It is vital that our communications infrastructure meets not only today’s demands,

but also provides the platform for creativity and innovation to support our futureeconomic growth. Government will explore the best way forward in ensuring that our

communications infrastructure matches our aspirations in business innovation.

Business innovation: key initiatives

• Government will work towards better understanding barriers to innovation and

how innovation can be stimulated and supported.

• Foster connections between research, product design and service.

• Establish a committee on innovation Innovation Committee.

• Ensure science, technology, engineering, mathematics tertiary education

scholarships are offered to our young people



7. THE WIDER BENEFITS OF ENTERPRISE

Vision

The Government’s aim is through enterprise (measured by self-employment rate), to

bring significant social and economic benefits to Cook Islands, and in particular to the

Outer Islands.

Progress

In 2003, there was a total of 134 new business registered for VAT; in 2008 (as of

November 25th), there are 72 new business registrations. This demonstrates a decline in

businesses registered for VAT.

Next Challenges

To increase businesses registered for VAT.Communities in the outer islands have most to gain from the wider benefits of

enterprise, yet they are most lacking in skills, culture and the resources needed to enable

enterprise.

A key challenge for many is accessing finance to support enterprise activity.

A further challenge is embedding social enterprise as an accepted form of enterprise.

Strategy

Government is wants to re-focus its role in delivering economic development, includingsupport for enterprise. In the coming years, Government’s strategy is for:

More businesses and individuals in communities that are underserved by traditional

finance sources can access the finance they need.



2008 is up to November 25, 2008). This indicates that Government must work hard to

foster and support business development.

Chart 7.1

New business registered for VAT

0

20

40

60

80

100

120

140

160

2000 2001 2002 2003 2004 2005 2006 2007 200

Years

N o

o f b u s i n e s s

LOOKING AHEAD

7.3 Most of the reasons for lack of enterprise in any community are common acrossthe whole country. However, local differences in economic historic, geography,

demographic mix, give rise to a variety of issues and therefore call for an appropriatevariety of policy responses. In the coming years, the gGovernment will pursue a range of policies aimed at empowering local communities to boost economic development in their

areas and tailored measures to improve access to finance for those who find it difficult to



Wider Benefits of enterprise: Key considerations

Government to put into place funding mechanisms for those who cannot secure

funding through commercial banks for business start-up and expansion.

Government will operate and manage a separate funding mechanism targeting the

outer islands.

The gGovernment through BTIB will target and provide more intensive supportto those currently under-represented in enterprise.

Government will develop mechanisms to help young people realize their talentsand potential through raising awareness of enterprise and the role it can play in

their lives and in building communities.



DELIVERING THE STRATEGY

A CULTURE OF ENTERPRISEOUR GOALS OUR STRATEGIES OUR TARGETS OUR DRIVERS

To inspire our young people to be

entrepreneurial• Enterprise education in our schools

• Increase enterprise programmes in

our schools

• Improve pass rate in enterprise

programmes in our schools

• Ministry of Education

•Establish a pilot programme to offer

mentoring and work placement in

SMEs.

•Increase participation in pilot

programme

•Business Trade and Investment

Board

• Explore and promote avenues for

young people to connect withenterprise activities around the

world

•Increase number of young people

connected with enterprise activitiesaround the world


Board•Ministry of Internal Affairs (Youth

Division)

•Establish a Entrepreneurship Week • Number of young people

participating in Entrepreneurship

Week


Board

•Ministry of Education

•Ministry of Internal Affairs (Youth

Division)

To reach those with low aspirations • Develop strategies to encourage

outer islands participation in

enterprise

•Increase number of enterprise in the

outer islands


Board

•Ministry of Marine Resources

•Ministry of Agriculture

•Cook Islands Tourism

•Department of National Human

Resource Development

To promote enterprise amongst

women• Develop enterprise assistance

targeting women

•Increase number of women in

business

•Ministry of Internal Affairs


Board

30



To address the environment that

shapes fear of failure•Review policies to create a more

conducive environment for

enterprise (regulatory, infrastructure,

finance, marketing)

• To develop systems to disseminateinformation effectively and

efficiently

•Policies for conducive environment

in place and increase in enterprise


Board

•Ministry of Finance and Economic

Management

•Ministry of Internal Affairs•Office of the Prime Minister

•Ministry of Infrastructure and

Planning

•Ministry of Marine Resources

•Ministry of Agriculture

•Cook Islands Tourism Authority

To strengthen capacity to support

SME•Strengthen Business Trade and

Investment Board capacity to

facilitate, coordinate and support

SME development

•

To develop tools and systems toinform customers

•A fully capacitated Business Trade

and Investment Board


Board

To build effective partnerships to

promote SME support•Work in partnership with Private

Sector, NGOs and the community to

promote enterprise

•To establish a mentoring and

empowering programme with

partners to promote and support

enterprise.

•Effective partnerships to promote • Business Trade and Investment

Board

•Private Sector

• NGOs

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KNOWLEDGE AND SKILLS

OUR GOALS OUR STRATEGIES OUR TARGETS OUR DRIVERS

To ensure that many more people in

the Cook Islands have the enterprise

skills to start and grow business and

for businesses to have access to a

skilled workforce

• Develop the Enterprise Education

Framework

•Extend enterprise education across

the whole school system

• Quality enterprise education

programmes in our education

curriculum


•Promote self-employment as a

career option

•Increase number of self-employed

people


Board


• Department of National Human


To have a high level of skills and

training in the workforce•Embed enterprise in the National

Resources Development Strategy

•Embed enterprise in National

Resources Development Strategy



• Business Trade and Investment

Board

•Offer accredited skills and training

programmes that meet the needs of

enterprise

•Increase number of people

undertaking and successfully

completing skills and training

programmes


Resources Development


Board

To provide in an effective and

efficient manner business support,

advice and mentoring

• Build the capacity of BTIB to be

able to effectively and efficiently

provide business support and advice

• To provide business support on line

•Increase number of people utilizing

the services provided by BTIB

• Increase number of people utilizing

BTIB business support on line


Board

•Office of the Prime Minister (ICT

Division)

•Develop a robust mentoring

programme in partnership with

private sector and NGOs

• Number of people taking part in

mentoring programme


Board

•Private Sector

• NGOs

•Embrace new media and • Increase media and technological • Business and Trade and Investment

32



technologies to better address the

needs of business

avenues to assist and support

business

• Increase number of people utilizing

media and technological avenues to

address business needs

Board

To drive the development of

enterprise skills and knowledge of

people in the outer islands

• Promote the development of

enterprise skills and knowledge of

people in the Oouter Iislands

• Increase number of people from the

outer islands undertaking and

successfully completing skills and

training programmes

•Increase number of enterprise in the

Oouter Iislands


Board

•Department of National Human


ACCESS TO FINANCE


To ensure that there are alternative

financing mechanisms to supportthose who cannot access finance from

regular financing sources

• Provide alternative financing

mechanisms to support enterprise

•Increase number of people in

enterprise utilizing alternativefinancing mechanisms


Board• Ministry of Finance and Economic

Management

• Bank of the Cook Islands

•Provide access to finance for outer

islands entrepreneurs through

financing mechanisms targeting

outer islands

• Work with NZAID to strengthen

and tailor Outer Islands

Development Grant Fund to better

meet the need of enterprise in theouter islands such

•Increase number of enterprise in

outer islands


Board

• Ministry of Finance and Economic

Management

• NZAID

To ensure that all businesses and

entrepreneurs are more ‘investment

ready’ and are better able to secure

appropriate sources of investment and

finance

• In collaboration with banks, provide

free, confidential and independent

advice to small businesses

• Develop a strong framework for

delivering finance and investment

•Increase in enterprise activities • Business Trade and Investment

Board

• Banks

33



readiness advice and support

REGULATORY FRAMEWORK


To ensure that our regulatory

environment encourages and enablesenterprise activity

• Promote competition, innovation,

investment; and protect consumersand employees thorough the passing

of appropriate legislations and

regulations

• Review and outdated and redundant

legislation and regulations related to

enterprise activity

•Increase enterprise activity •Business Trade and Investment

Board• Ministry of Finance and Economic

Management


•Crown Law Office

•Consider the costs and benefits of

passing legislation and regulation

relating to enterprise

•Increase enterprise activity •Business Trade and Investment

Board

• Ministry of Finance and Economic

Management


• Crown Law

• Private Sector

•Examine the issues of monopoly,

mergers, bankruptcy with the view

of implementing mechanisms that

best address these situations

•Increase competition

• Decrease in business bankruptcy


Board

• Cook Islands Law Commission

• Ministry of Internal Affairs

• Ministry of Justice

• Crown Law Office

• Ministry of Finance and EconomicManagement

• Provide information and guidance

effectively and efficiently to

businesses on compliance with

legislation and regulation

• Strengthen monitoring and

compliance systems

• Increase utilization of official

channels for information and

guidance on compliance with

legislation and regulation regarding

business activities

• Decrease in non-compliance


Board

• Cook Islands Law Commission

• Ministry of Internal Affairs

• Ministry of Justice

• Crown Law Office

34



incidences • Ministry of Finance and Economic

Management

BUSINESS INNOVATION


To better understand how innovationcan be stimulated and supported to

drive our enterprise activity

•Foster connections betweenresearch, product design, marketing

and service

•Increase enterprise turn over duenew or improved products

•Business Trade and InvestmentBoard

•Establish Innovation Committee •Increase enterprise turn over due

new or improved products


Board

• Ensure that science, technology,

engineering, mathematics tertiary

education scholarships are offered to

our young people

•Increase in number of scholarships

in these areas and success of those

undertaking scholarships


Resources Development


To improve our infrastructure to

support enterprise innovation and

development

• Explore the best means of

improving infrastructure –

communications, transportation,

public utilities, ports, etc to support

enterprise

• Have in place the necessary

infrastructure to support enterprise

innovation and development


Board

•Ministry of Infrastructure

•Ministry of Transport

•Island Administrations

•Minister of Telecommunications

This Strategy will only succeed through the collaborative efforts of many government agencies and the different sectors of thecommunity.

Government agencies identified are expected to mainstream the strategies contained in this ‘10 year Strategy for SME Development’

into their various strategic and annual business plans. The overall agency responsible for ensuring the delivery of the strategy will bethe Business Trade and Investment Board. The targets identified will be monitored by the various agencies and will be evaluated by

the Central Policy and Planning Office of the Office of the Prime Minister.

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Documents

Enabling Entreprise