Entrepreneurial Activity in Trinidad & Tobago

Acknowledgements On behalf of The Arthur Lok Jack Graduate School of Business the authors would like to express gratitude to the GEM Coordination Team - Mr. Chris Aylett (Project Administrator); Ms. Yana Litovsky (Data Manager) and Ms. Alicia Coduras (NES Co-ordinator) for their assistance in training and quality management throughout the 2011 GEM cycle. Special mention must also be made of Dr. Rodrigo Varela and his team at Universidad ICESI whose guidance was invaluable to the completion of this research project. Finally, we would like to thank Carolina Robino and the International Development Research Centre (IDRC) for seeing the critical importance of entrepreneurship research to the region and so generously extending their financial support in order to make it possible. The authors also acknowledge Mary King and Associates Ltd which collected the data for this report. i Contents Acknowledgements ........................................................................................................................................ i Introduction .................................................................................................................................................. 1 The Phases and Profile of Entrepreneurship ................................................................................................ 3 Phases ....................................................................................................................................................... 3 Profile ........................................................................................................................................................ 4 Entrepreneurial Activity in Trinidad & Tobago ............................................................................................. 6 Total Early-Stage Entrepreneurial Activity (TEA) ...................................................................................... 9 Necessity versus Opportunity Entrepreneurship .................................................................................... 12 Total Early-Stage Entrepreneurial Activity by Industry Sector................................................................ 14 Entrepreneurship by Gender and Age (TEA) ........................................................................................... 15 Fear of Failure ......................................................................................................................................... 16 Entrepreneurship and Age ...................................................................................................................... 17 Innovation ................................................................................................................................................... 18 Business Discontinuation ............................................................................................................................ 21 Entrepreneurial Aspiration ......................................................................................................................... 23 Entrepreneurial Networks .......................................................................................................................... 25 National Expert Survey (NES) Results ......................................................................................................... 29 Entrepreneurial Opportunities in the Economy ..................................................................................... 30 Entrepreneurial Abilities and Knowledge to Facilitate New Venture Start-ups ..................................... 31 Cultural and Social Norms to Facilitate an Entrepreneurial Orientation ................................................ 33 Motivation and Entrepreneurship as a Career Choice............................................................................ 35 Women Entrepreneurship and Support ................................................................................................. 36 High Growth Enterprises and Support for Such Enterprises................................................................... 38 Education and Training ........................................................................................................................... 39 Entrepreneurial Employee Activity ............................................................................................................. 42 Conclusion and Recommendations ............................................................................................................ 46 References .................................................................................................................................................. 48 ii List of GEM National Teams ........................................................................................................................ 51 List of Figures Figure 1: The Institutional Context and Its Relationship to Entrepreneurship ................................ 2 Figure 2: The Entrepreneurship Process and GEM Operational Definitions ................................... 3 Figure 3: Economic Groups ............................................................................................................. 5 Figure 4: The Percentage of Respondents Answering ‘Yes’ to the question “Would fear of failure prevent you from starting a new business?” .................................................................................. 8 Figure 5: The percentage of Respondents who respond “Yes” when asked if they were capable of starting and operating a new business. .......................................................................................... 8 Figure 6: Trends relating to attitudes and perceptions towards entrepreneurship for Trinidad and Tobago over the period 2010-2011. ........................................................................................ 9 Figure 7: Total Early –Stage Entrepreneurial Activity (TEA) in 54 Economies, by Phase of Economic Development, 2011....................................................................................................... 10 Figure 8: Nascent, New Business and TEA data for the Efficiency Driven Economies in Table 1. 12 Figure 9: Motive for Total Early-Stage Entrepreneurship Activity in T&T (% of TEA) ................... 13 Figure 10: Sector Distribution of Total Early-Stage Entrepreneurship Activity in T&T (% of TEA) 14 Figure 11: Percentage of Entrepreneurial Activity between males and females .......................... 15 Figure 12: The percentage of Respondents who perceive an opportunity and respond ‘Yes’ when asked whether Fear of Failure would prevent them from starting a new business to pursue that opportunity. .................................................................................................................................. 16 Figure 13: Readiness to start a business (% of Adult Population) ................................................ 17 Figure 14: Percentage of those involved in Entrepreneurial Activity in the different age groups 18 Figure 15: Innovation for Early-Stage Entrepreneurial Activity 2009 – 2011 (% of TEA) .............. 19 Figure 16: Innovation in Total Early-Stage Entrepreneurship Trinidad and Tobago 2011 (%) ..... 20 Figure 17: Innovation for Established Businesses Trinidad and Tobago 2011 (%) ....................... 21 Figure 18: Business Discontinuation rate in Latin America and the USA (%). .............................. 22 Figure 19: Reason for Exit (% Respondents who Discontinued Businesses) ................................. 23 Figure 20: Job Growth Expectation for Early-Stage Entrepreneurial Activity 2009 – 2011 (% of TEA) ............................................................................................................................................... 24 Figure 21: Percentage of Early – Stage Entrepreneurs with International Orientation ............... 25 Figure 22: Sources of Advice for Potential Entrepreneurs (%) ...................................................... 26 Figure 23: Sources of Advice for Nascent Entrepreneurs (%) ........................................................ 27 Figure 24: Sources of Advice for Owner Managers (%)................................................................ 28 Figure 25: Perceptions of NES Respondents Concerning Opportunities. ...................................... 31 Figure 26: NES Respondents’ Perceptions Regarding Entrepreneurial Ability .............................. 32 Figure 27: NES Respondents’ Perceptions Concerning National Culture ...................................... 34 iii Figure 28: NES Respondents’ Perceptions Regarding Entrepreneurship as a Career Choice........ 35 Figure 29: NES Respondents’ Perceptions Concerning Gender ..................................................... 37 Figure 30: NES Respondents’ Perceptions Regarding Support for Entrepreneurs ........................ 39 Figure 31: NES Respondents’ Perceptions Regarding Tertiary and Vocational Education ........... 40 Figure 32: NES Perceptions Regarding Primary and Secondary Education .................................. 41 Figure 33: Entrepreneurship Process and GEM Operational Definitions, including Entrepreneurial Employee Activity. ......................................................................................................................... 43 Figure 34: Prevalence Rates of Employee Entrepreneurial Activity (EEA) in the 18-64 Population 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