[Business Communication]

Transcript [Business Communication]

Enhancing Business Competitiveness

Business and Banking Conference

Hilton Trinidad Hotel and Conference Centre June 22, 2011

Minister of Planning, Economic and Social Restructuring and Gender Affairs

Senator the Honourable Dr. Bhoendradatt Tewarie

COMPETITIVENESS IS AN IMPERATIVE

• To improve the quality of life and the standard of living of our citizens, we have to become an active player in the (non-energy) global economy • Global thinking must be the basis on which we act locally • Countries worldwide and particularly regions within the large countries (Shanghai, Bangalore) are rapidly expanding their capabilities place to engage in value added activities and compete in the global market • Competitive businesses are those which are able to sustain high levels of productivity which has positive consequences for economic and social prosperity

OW IS THE

ORLD

HANGING

• The Global Economy is being transformed by a new wave of globalisation and technological change - improvements in communications, advances in IT,

declining transport costs, accelerated technical and scientific progress, greater economic integration

• The convergence of these factors has put growing pressure on countries to restructure their economic base and rethink and refocus human capital development • The Global Economy is now being driven by ideas which are the primary catalyst for economic growth • In this environment, the key to prosperity is increasing productivity and the basis for increasing productivity is innovation • The assumption is that efficiency, effectiveness and responsiveness are the minimum standards required

OW MUST OUR STRATEGY CHANGE

Drivers of Economic Prosperity

OLD NEW

Natural Resources Raw Manpower Population Growth Industrialisation Geography Climate Military Power

Ideas Creativity/Talent Entrepreneurs Innovation Productivity Education and Training Strong Institutions New Technologies All Interconnected New Basis for Global Competitiveness

OW MUST OUR STRATEGY CHANGE

• The emphasis now must be on nurturing the talent and creativity of citizens and providing the conditions conducive to innovation and entrepreneurial growth • The education and training system must be re-oriented to provide the knowledge and skills set required by the new economy • Routine work and mass production must give way to creative work and mass customisation • Firms must be a source of ideas that drive innovation in the global market place • We must also look at the potential for creating an innovation region with our Caribbean neighbours for the purpose of mutual gain

HE NEW ECONOMY

Industrial Economy Ideas Economy RAW MATERIALS

Natural Resources Labour Capital Mass Production Ideas

CUSTOMER FOCUS ORGANISATION

Large Corporations Economies of Scale Mass Customisation based on IT and Product Design Entrepreneurs, Networks, Small Scale

SUCCESS FACTORS

Labour, Quality Low Cost, Stability, Control Talent, Speed, Innovation, Flexibility, Customisation Source: Collaborative Economics, Joint Venture: Silicon Valley’s 2006 Index of Silicon Valley

LOBAL COMPETITIVENESS INDEX

Year

2010-2011 2009-2010 2008-2009 Trinidad and Tobago

RANK

84 TH 86 92 th nd of 139 countries of 133 countries of 134 countries 2010-2011

COUNTRY

Chile Barbados Costa Rica Uruguay Jamaica

RANK

30 43 56 64 95 Source: World Economic Forum: Global Competitiveness Reports

OW DO WE ENHANCE

OMPETITIVENESS

• • • • To begin with, the issues of competitiveness, diversification, productivity , innovation, entrepreneurship and wealth creation go hand in hand As such, policy shifts have to be implemented in several areas and there must be complementarity. From the perspective of the Government, the strategic approaches must be integrated. This also applies to private sector We have little choice … the Trinidad and Tobago engine cannot run solely on oil and gas for much longer. Our survival depends on the shifts we engineer now, not just in terms of the sectors we focus on but also in terms of our development strategy There is a role for Government as there is for the private sector and indeed all individual business enterprises

The Government has a responsibility to improve the business environment, build a quality education and training system and implement a coherent economic strategy We must create a strong links between education curriculum, throughput of graduates, diversification and the absorptive capacity of the economy and labour market Private enterprises must invest more, be less risk averse, upgrade their processes, build human capital and move towards closer international engagement

HAT THEN SHOULD BE THE FOCUS OF OUR COMPETITIVENESS AGENDA

• • • • • • • Human Capital Development Building a National Innovation Framework Raising Productivity Levels Support for Entrepreneurs and Building the Capacity of MSMEs Continued Prudent Macroeconomic Management and Implementation of a viable Diversification Strategy Strengthening the Institutional and Regulatory Environment Continued Mainstreaming of Gender

RIORITY

: H

UMAN

APITAL

EVELOPMENT

• • • • • • At the core of the agenda is the issue of human capital and the link between research, human imagination, creativity, and product and service creation Education and Training are critical for building a capacity to innovate and compete in global markets. The skills and competencies of the workforce is a major factor in productivity and in diversification. The workforce must have continuous access to new knowledge and be trained and retrained in new processes and the use of new technologies However, innovation is not solely dependent on formal training and knowledge. Tacit knowledge is as valuable as theoretical knowledge. Curricula reform is a priority. Porter places emphasis on high education standards as well as the need for education and training with a strong practical orientation The through puts of the tertiary and vocational sectors must be closely aligned with the requirements of industry. This can be achieved through closer collaboration between educational institutions and employers The intellectual capital pool of any country is a competitive asset and can attract diversified investment

RIORITY

: H

UMAN

APITAL

EVELOPMENT

Years

School-Going Age Population to School Attending Population by Age: 2000

429387 Total 290500 20 - 24 14531 98798 Less than 15% 15 - 19 10 - 14 5 - 9 0 122851 75141 Total School-Going Age Population Attending (Full & part-Time) 114915 110640 92823 90188 50000 100000 150000 200000 250000 300000 350000 400000 450000 500000 Source: CSO

RIORITY

: H

UMAN

APITAL DEVELOPMENT

Enrollment and Estimated Progression along the various levels of the Education System 1988-2009

Pre-School Enrollment 1988-1990 (as a % of the Pre-School Going Age Population in 1988-1990) 50 Primary School Enrollment Grade 1 @ 1990-1991 Pupils finishing Grade 7 @ 1996-1997 (In relation to the number of students enrolled in Primary School in 1988/1990) Secondary School Enrollment @ 1997-1998 (In comparison to the No. of students finishing Primary School in 1996/1997) Pupils who finish Secondary School 2004-2005 (In relation to the number of students enrolled in Secondary School in 1997-1998) UWI Enrollment 2005-2006 (In relation to No. of persons finishing Secondary School in 2004/2005) -15,6 -8 10,8 75 69,4 92 100 UWI Graduates 2008-2009 completing a 3-year degree -8,23 2,57 -40 -20 0 20 UWI Enrollment Rate - approximately 11%.

Less than 3% Graduate 40 Source: Ministry of Education, MSTTE and CSO 60 80 100 120 Gap Proportion of Students

RIORITY

: H

UMAN

APITAL

EVELOPMENT

Enrollment in Institutions at Secondary and Tertiary Levels 2008/2009- 2009/2010

120000 100000 80000 60000 40000 20000 0 Enrollment in institutions Secondary schools Enrollment in institutions Tertiary Level Enrollment Source: MSTTE and Ministry of Education 2008/2009 100374 55635 2009/2010 97996 52088

• • • • • • • •

RIORITY

: H

UMAN

APITAL

EVELOPMENT

Key Initiatives: Upgrade and expansion of Early Childhood Care and Education Revision of the curricula at the Early Childhood Care, Primary and Secondary Education levels. The secondary school curricula will be revised in order to incorporate intellectual development, creativity and the development of critical thinking skills Expansion of the range of technical vocational offerings in order to increase options and choice Promotion of a system of entrepreneurship and apprenticeship. All major industrial firms will be encouraged to operate apprenticeship programmes for youth so inclined and to engage interns from the educational system.

Review of the curriculum for all certification programmes for teachers Inclusion of technical/vocational areas under GATE Development of an Integrated Learning Campus in Tobago Expansion of tertiary education to achieve a 60% participation rate by 2015

RIORITY

: B

UILDING A NATIONAL INNOVATION FRAMEWORK

• • • The Framework must create an integrated knowledge infrastructure which provides for active collaboration among the key actors – the education and research institutes, private business, entrepreneurs and the regulatory and financing institutions and leveraging R&D for commercial purposes It must engender a culture of critical thinking and creativity within schools and business enterprises as well as the wider national community. Business enterprises must place emphasis on developing their capacity to adopt and use new technologies to enhance productivity There must be support mechanisms for encouraging investment in R&D, new industries, new business systems and clusters, improved products, processes and methods and new business creation

RIORITY

: I

NVESTMENT IN

R&D Expenditure on Research and Development, 2006 - 2009

Government Expenditure (TT$M)* GDP (TT$M) % of GDP Year 2006 2007 2008 2009 *Revised Source: NIHERST Survey of Science and Technology Indicators Survey 64.082105

62.853658

53.844165

65.813633

115951.2

132280.8

163324.9

133533.6

0.06

0.05

0.03

0.05

Central Bank of Trinidad and Tobago Below the threshold of 1% of GDP that UNESCO considered as a minimum 3 decades ago 90 % of R&D investments in developed counties come from the private sector, in LAC, this figure is only 10%

RIORITY

: B

UILDING A NATIONAL INNOVATION FRAMEWORK

• • Key Initiatives: A first round of six public consultations was conducted on the proposed elements of a National Innovation Framework A foresighting exercise is to commence shortly involving industry experts, members of the national community and the Diaspora which will identify sectors/areas to be targeted as part of a national innovation and diversification strategy

RIORITY

: R

AISING PRODUCTIVITY

EVELS

• Low productivity levels has been identified as the main reason most countries in Latin America and the Caribbean have lagged behind other countries in terms of growth rates OVERALL GCI INDEX 2010-2011 Labour Market Efficiency Country /Economy Rank (139 countries) Score Rank (139 countries) Score Singapore Sweden Malaysia Trinidad and Tobago Jamaica Barbados Costa Rica 3 2 26 84 95 43 56 5.5

5.6

4.9

3.97

3.9

4.5

4.3

Source: World Economic Forum: Global Competitiveness Report 1 18 35 82 83 49 45 5.9

4.9

4.7

4.3

4.2

4.6

RIORITY

: R

AISING PRODUCTIVITY

EVELS

• Key Initiative: The National Productivity Council is to be reconstituted shortly.

The Council has a mandate to promote and develop greater productivity and quality awareness in Trinidad and Tobago The NPC will advise Government on the formulation of policies and strategies on all aspects of productivity, quality and competitiveness; and identify constraints to improvements in productivity, quality and competitiveness and propose corrective action

RIORITY

: S

UPPORT FOR AND

UILDING THE

C E

NTREPRENEURS APACITY OF

MSME

S

• Innovation and entrepreneurship are now considered the new engines of job creation, productivity, competitiveness and economic and social prosperity In the Western Hemisphere, there are an estimated 200 million business units , 120 million of which are micro, small and medium enterprises (MSMEs).

Of these MSMEs, which generate between 50 and 70 percent of jobs in the region , more than a third are headed by women, while about 25 percent are created by entrepreneurs under 35 years of age. With an average life of only 14 months , most of them operate in the informal sector. In LAC, they generate less than 5 percent of exports of goods and services and only one third have the capacity to engage in international trade of goods and services.

Source: OAS

RIORITY

: S

UPPORT FOR AND

UILDING THE

C E

NTREPRENEURS APACITY OF

MSME

S

• • Key Initiatives: Formulation of the Business Incubation Policy for Enterprise Development to accelerate the development of new micro and small entrepreneurial and innovative businesses, and improve their viability and competitiveness. The Policy will be implemented through a Business Incubation Programme Revision of the MSE Policy for Trinidad and Tobago and the accompanying legislation. The Policy is expected to be completed and commence implementation in 2011/12

P RIORITY : P RUDENT E CONOMIC M ANAGEMENT AND IMPLEMENTATION OF A VIABLE DIVERSIFICATION STRATEGY

• • • Prudent macroeconomic management that ensures inflation and exchange rate stability and the maintenance of sound public finances contribute to stable domestic conditions which raises investor confidence and enhances the prospects for increased investment, both domestic and foreign Economic policy must also promote greater integration in the global economy. A more global orientation will expand opportunities for more FDI (in terms of both capital and expertise), new exports and for the absorption of foreign technological advances Beyond the issue of making existing industries, systems and clusters competitive, we must find new sources of growth and new ways of generating wealth. A viable diversification strategy must target new investments in industries higher up the knowledge and technology value chain and high export diversification, in particular

P RIORITY : P RUDENT E CONOMIC M ANAGEMENT AND IMPLEMENTATION OF A VIABLE DIVERSIFICATION STRATEGY

Key Initiatives: Establishment of: The Ministerial Council for Economic Development, chaired by the Prime Minister which will oversee the economic development process The Economic Development Board which has an advisory and implementation role in the strategic management of the economy. The core mandate of the EDB is to develop and implement a holistic and competitive innovation policy that will advance diversification efforts The Council for Innovation and Competitiveness which has a mandate to improve Trinidad and Tobago’s competitiveness by identifying ways in which our global image as captured by global indices can be improved The International Business Centre which is a key part of the strategy for building a competitive business environment. The IBC will work with Eteck and TDC

RIORITY

: S

TRENGTHENING THE INSTITUTIONAL AND

EGULATORY ENVIRONMENT

• • Countries with an efficient regulatory framework tend to attract more businesses The regulatory framework must contribute to investor confidence and the enabling environment for expanding entrepreneurial capacity, investment in new business and the conduct of business operations

RIORITY

: R

EGULATORY

NVIRONMENT

Country Ease of Doing Business Rank 2011 (out of 183 countries) Singapore Antigua and Barbuda Jamaica St. Kitts and Nevis Dominica Grenada Trinidad and Tobago

1 64 81 87 88 92 97 Source: IFC Doing Business Report 2011

RIORITY

: R

EGULATORY

NVIRONMENT

Indicator Rank (out of 183 countries) Ease of Doing Business

Starting a Business Dealing with Construction Registering Property Getting Credit Protecting Investors Paying Taxes Trading Across Borders Enforcing Contracts Closing a Business

74 85 171 32 20 91 51 169 183 Source: IFC Doing Business Report 2011

MPROVING THE

USINESS

NVIRONMENT

• • • • Key initiatives: Launch of the Single Electronic Window (SEW) branded as TTBizLink to assist in reducing the number of the length of time to secure approvals from Government Agencies Establishment of the International Business Centre (IBC) that will form part of the institutional structure designed to create a new thrust in investment promotion Development and implementation of the Investment Policy 2011 2015. The Policy will be finalised before the end of 2011 Development and implementation of the National Export Strategy . The draft Strategy will be developed by June 2012

MPROVING THE

USINESS

NVIRONMENT

Key initiatives: • • Increase in the Wear and Tear Allowance for the Manufacturing Sector from 10% to 25% Expansion of the Research and Development Facility at the Business Development Company. Grants to single projects have increased from $100,000 to $500,000 and for business alliances of two or more companies from $200,000 to $1 million • Creation of an Innovation Financing Facility with an initial capital of $10 million

RIORITY

: C

ONTINUED

AINSTREAMING OF

ENDER

• Studies have shown a close connection between economic performance and the degree to which women are integrated in the productive activities and the decision making processes of their societies • The integration of women allows for greater efficiency in the allocation of resources and an expansion of the pool of talents and skills available

RIORITY

: C

ONTINUED

AINSTREAMING OF

ENDER

• • • • Key Initiatives: Elimination of all forms of discrimination against women through Legislative and Policy Review and Amendment Strengthening of the social service delivery sector and other relevant sectors to enhance men and women’s welfare Promotion of public awareness on gender issues through education campaigns Review of the curriculum to provide education, awareness, support and guidance to young persons, particularly girls, on reproductive health and life decisions.

P RIORITIES OF THE ECONOMIC AND M INISTRY OF S OCIAL R P LANNING , ESTRUCTURING AND GENDER AFFAIRS

1. Covert Manifesto into a National Plan in two phases: • • 2011 - 2014 2014 - 2017 2. Identify a national agenda of priorities and facilitate linkages with local government priorities and community initiatives for the 2011-2012 FY 2. Align Ministerial Agendas for high impact with the framework of a sustainable development strategy 2. Strengthen the national data base and information management system to support evidence-based policy making and decision support

P RIORITIES OF THE ECONOMIC AND M INISTRY OF S OCIAL R P LANNING , ESTRUCTURING AND GENDER AFFAIRS

5. Develop a national land use policy to support a sustainable development agenda 6. Facilitate and fuel an innovation-driven economy by specific initiatives and collaborative action with the private sector 7. Strengthen project management capability to ensure efficiency, effectiveness and high performance in the execution of the PSIP 8. Reform Town and Country Planning