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 to engage in value
added activities and compete in the global market
place
• Competitive businesses are those which are able to
sustain high levels of productivity which has positive
consequences for economic and social prosperity
HOW
•
IS THE
WORLD CHANGING?
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
HOW
MUST OUR STRATEGY CHANGE?
Drivers of Economic Prosperity
OLD
NEW
Natural Resources
Ideas
Raw Manpower
Creativity/Talent
Population Growth
Entrepreneurs
Industrialisation
Innovation
Geography
Productivity
Climate
Education and Training
Military Power
Strong Institutions
New Technologies
All
Interconnected
New Basis for
Global
Competitiveness
HOW
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
THE
NEW ECONOMY
Industrial Economy
Ideas Economy
RAW MATERIALS
Natural Resources
Labour
Capital
Ideas
CUSTOMER FOCUS
Mass Production
Mass Customisation
based on IT and
Product Design
ORGANISATION
Large Corporations
Economies of Scale
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
GLOBAL
COMPETITIVENESS INDEX
Trinidad and Tobago
Year
RANK
2010-2011
84TH of 139 countries
2009-2010
86th of 133 countries
2008-2009
92nd of 134 countries
2010-2011
COUNTRY
RANK
Chile
30
Barbados
43
Costa Rica
56
Uruguay
64
Jamaica
95
Source: World Economic Forum: Global Competitiveness Reports
HOW
DO WE ENHANCE
COMPETITIVENESS?
•
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
WHAT
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
PRIORITY: HUMAN CAPITAL DEVELOPMENT
•
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
PRIORITY: HUMAN CAPITAL DEVELOPMENT
School-Going Age Population to School Attending Population by
Age: 2000
429387
Total
290500
Years
98798
20 - 24
Less than 15%
14531
122851
75141
15 - 19
Total School-Going Age Population
Attending (Full & part-Time)
114915
10 - 14
110640
92823
5-9
90188
0
50000
Source: CSO
100000
150000
200000
250000
300000
350000
400000
450000
500000
PRIORITY: HUMAN CAPITAL 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
100
Pupils finishing Grade 7 @ 1996-1997 (In relation to the
number of students enrolled in Primary School in 1988/1990)
-8
92
Secondary School Enrollment @ 1997-1998 (In comparison to
the No. of students finishing Primary School in 1996/1997)
Gap
75
Proportion of Students
Pupils who finish Secondary School 2004-2005 (In relation to
the number of students enrolled in Secondary School in
1997-1998)
-15.6
69.4
UWI Enrollment 2005-2006 (In relation to No. of persons
finishing Secondary School in 2004/2005)
10.8
UWI Graduates 2008-2009 completing a 3-year degree
-8.23
-40
-20
2.57
0
20
40
UWI Enrollment Rate - approximately 11%.
Less than 3% Graduate
Source: Ministry of Education, MSTTE and CSO
60
80
100
120
PRIORITY: HUMAN CAPITAL DEVELOPMENT
Enrollment in Institutions at Secondary and Tertiary Levels
2008/2009- 2009/2010
120000
100000
80000
60000
40000
20000
0
2008/2009
2009/2010
Enrollment in institutions Secondary schools
100374
97996
Enrollment in institutions Tertiary Level
Enrollment
55635
52088
Source: MSTTE and Ministry of Education
PRIORITY: HUMAN CAPITAL DEVELOPMENT
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
PRIORITY: BUILDING 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
PRIORITY: INVESTMENT IN R&D
Expenditure on Research and Development, 2006 - 2009
Year
Government
Expenditure
(TT$M)*
GDP (TT$M)
% of GDP
2006
64.082105
115951.2
0.06
2007
62.853658
132280.8
0.05
2008
53.844165
163324.9
0.03
2009
65.813633
133533.6
0.05
*Revised
Source: NIHERST Survey of Science and Technology Indicators Survey
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%
PRIORITY: BUILDING 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
PRIORITY: RAISING PRODUCTIVITY LEVELS
• 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
Country
/Economy
Rank (139
countries)
Labour Market Efficiency
Score
Rank (139
countries)
Score
Singapore
3
5.5
1
5.9
Sweden
2
5.6
18
4.9
Malaysia
26
4.9
35
4.7
Trinidad and
Tobago
84
3.97
82
4.3
Jamaica
95
3.9
83
4.2
Barbados
43
4.5
49
4.6
Costa Rica
56
4.3
45
4.6
Source: World Economic Forum: Global Competitiveness Report
PRIORITY: RAISING PRODUCTIVITY LEVELS
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
PRIORITY: SUPPORT FOR ENTREPRENEURS
AND BUILDING THE CAPACITY OF MSMES
• 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
PRIORITY: SUPPORT FOR ENTREPRENEURS
AND BUILDING THE CAPACITY OF MSMES
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
PRIORITY: PRUDENT ECONOMIC MANAGEMENT
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
PRIORITY: PRUDENT ECONOMIC MANAGEMENT
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
PRIORITY: STRENGTHENING THE INSTITUTIONAL
AND REGULATORY 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
PRIORITY: REGULATORY ENVIRONMENT
Country
Ease of Doing Business Rank
2011 (out of 183 countries)
Singapore
1
Antigua and Barbuda
64
Jamaica
81
St. Kitts and Nevis
87
Dominica
88
Grenada
92
Trinidad and Tobago
97
Source: IFC Doing Business Report 2011
PRIORITY: REGULATORY ENVIRONMENT
Indicator
Rank (out of 183 countries)
Ease of Doing Business
97
Starting a Business
74
Dealing with Construction
85
Registering Property
171
Getting Credit
32
Protecting Investors
20
Paying Taxes
91
Trading Across Borders
51
Enforcing Contracts
169
Closing a Business
183
Source: IFC Doing Business Report 2011
IMPROVING THE BUSINESS ENVIRONMENT
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 20112015. 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
IMPROVING THE BUSINESS ENVIRONMENT
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
PRIORITY: CONTINUED MAINSTREAMING OF
GENDER
•
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
PRIORITY: CONTINUED MAINSTREAMING OF
GENDER
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.
PRIORITIES
OF THE MINISTRY OF PLANNING,
ECONOMIC AND SOCIAL RESTRUCTURING 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
PRIORITIES
OF THE MINISTRY OF PLANNING,
ECONOMIC AND SOCIAL RESTRUCTURING 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
Thank You