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Revival Of The Entrepreneurial Spirit And The Redefinition Of The Capital Markets

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NCB Capital Markets is proud to be associated with the JSE’s annual conference for a 7th consecutive year as the lead regional sponsor. This year’s theme the “Capital Markets Redefined Achieving the Impossible” is very relevant given the global events over the past 3 years and the trends we are seeing globally, locally and I dare say regionally.

Tonight I had planned to speak on the Revival of the Entrepreneurial Spirit and the Redefinition of the capital markets…and I still will. Entrepreneurship is the engine of any economy and the capital market plays an important role in fueling that engine. I will explore the Jamaican experience and identify the lessons, which are applicable not just for Jamaica, but to the wider region as well.

However, it would be remiss of me, bordering on irresponsible, not to use this platform, as President of the Jamaica Dealers Securities Dealers Association (JSDA), to speak on the topic that is now dominating the local press. I was expecting 2023 to be a year of reprieve for the industry, having weathered the COVID-19 pandemic and the inflation crisis over the last three years. But, here we are with our own local situation, one that is threatening the reputation of our securities industry and public confidence in the financial system. As such, I will also address this in my presentation.

In the midst of this ordeal, I chose to keep my speech focused on the revival of the entrepreneurial spirit because while we as a nation solidify the transparency and security of our financial markets to rebuild confidence, the need for stronger economic growth, enhanced competitiveness, and greater job creation still exists.

A strong financial system is a key enabler of a thriving economy, which creates a high standard of living and quality of life for citizens. With that still being a goal, we must then ensure that financial markets can continue to play its role of providing resources for the innovative and productive ideas that will fuel development.

ENTREPRENEURSHIP

To start our conversation let’s look at the benefit of entrepreneurship to the economy; and I am going to focus on 3 benefits:

Firstly, entrepreneurship improves productivity as it injects the economy with a fresh batch of higher productivity firms. As such, it increases competition among existing businesses, and pushes out less-productive ones.

Secondly, entrepreneurship spurs innovation as new firms are disproportionately responsible for commercializing new innovations, particularly radical innovations that spawn entirely new markets or substantially disrupt existing markets.

Lastly, Entrepreneurship creates jobs as new and young businesses are the engine of net job creation in the economy.

LOCAL FINANCIAL CRISIS

In looking at the culture of entrepreneurship in Jamaica and how it has evolved, I am going to take us back three decades to a dark period in our economic history, that is, the financial sector crisis of the 90s. I believe it important that we understand the impact it has had on the psyche of our citizens, and what it did to the local entrepreneurial mindset.

In the early 1990s, in response to rapid depreciation in the local currency and spiraling inflation that had risen to as high as 80%, the government and the central bank sought to stabilize the economy and the exchange rate by pursuing a high- interest rate policy.

This high-interest rate policy played a meaningful role in the financial crisis of the 1990s and in subduing the entrepreneurial spirit because the interest rates at which banks lent to borrowers rose to prohibitively high levels. As the government raised interest rates to reduce liquidity in the economy, commercial banks quickly raised the rates at which they lent money to businesses.

According to BOJ data, the average lending rate for commercial banks rose from 34.5% in 1990 to 62.3% in 1994. As a matter of fact, in early 1994, a survey conducted by the Financial Gleaner revealed that banks such as Century National Bank, Jamaica Citizens Bank and Worker’s Bank were lending at rates that were as high as 65%-69% per annum.

The fallout from the financial crisis truly stifled entrepreneurship for two generations. Many businesses failed, with some entrepreneurs owing money to this day. The non-performing loans in the sector at the time accounted for 24.9% of GDP compared to the average of 1.2% over the last 5 years.

Allow me to paint a picture for you, an illustration… imagine an entrepreneur with a 15-year commercial (or residential) mortgage with a debt servicing ratio of 1.25 times, implying he has a 25% cash flow buffer to support loan payments. Let’s say that facility has a loan to value of 80%. A 20 percentage points interest rate rise, similar to what would happened in the 90s, would result in a cost of debt increase of approximately 70%…decimating his cash flows. He would likely be forever debt riddled because the recoverable value of the underlying collateral would likely be below the loan amount because of likely systemic fallout in the system.

The environment effectively killed the entrepreneurial spirit, as additionally, those that were fortunate to have liquidity opted for the easy route of placing money on fixed income securities earning high/double digit interest rates. In retrospect, one cannot blame them. Why take on the hassle and risks of running a business when your alternative is earning north of 30% per annum in relatively low risk fixed income investments?

That experience did not just kill a generation of entrepreneurs, it created a mindset of conservatism for years to come. The subsequent generation – my generation – which was either in the secondary or tertiary education system at the time, developed a conservative mindset.

The modus operandi of that generation was to do well in school so that you could land a job with a blue-chip company; preferably a firm that had international backing. Working for a small company was undesirable, becoming an entrepreneur was a no no. Entrepreneurship was a bad word and viewed as being for those that couldn’t get the desirable jobs at the time. In aggregate, I would argue, the outcomes of that period have stifled the economy for approximately two and half decades.

CURRENT ENVIRONMENT

With average GDP growth of 1.4% since Independence 60 years ago, our economy has endured some challenging times. It is these times and a spirit of flexibility/adaptability that makes us the resilient country that we are. The much needed macro-economic stability driven by reforms coming out of the more than a decade-old IMF agreement, coupled with financial sector innovation, is once again spurring entrepreneurship.

So we are we seeing today:

– many of the bright creative minds leaving the education system having the pursuit of entrepreneurship on their career roadmap. This is also reflected in the listing of a number of junior market companies controlled by individuals in their sub 40s.

– the emergence of a private equity culture, which has been enabled by the successes of our junior market and other financial innovation.

– the stock market, especially the junior market, being an avenue for entrepreneurs to raise funding to scale their operations.

– with lower interest rates and improved macroeconomic fundamentals, a lot of the so called “old money” are looking at private equity opportunities, in support of entrepreneurism, to diversify and create wealth.

The trend we are seeing currently, shouldn’t be taken lightly and must be nurtured for us to truly experience the transformation that we need as a country and deserve as a people. Jerry Moran, an American lawyer and politician, notes that “Innovation and entrepreneurship are the opportunity and best opportunity we have to grow the economy.”

RECOMMENDATIONS

With an ever changing global landscape and the accelerated pace of globalization, developing countries are at risk of seeing an increase in income inequality given changes in trade, technology and employment patterns. The last three years have seen an acceleration of these changes.

What is clear in my mind is that countries like ours must either adapt or face the consequence of being left behind. Doing nothing is not an option. With our resilience, improving macro-economic fundamentals and a renewed entrepreneurial drive, supported by an innovative financial sector, there is an opportunity to transform our economy and be on a path of a much higher rate of economic growth.

I want to share with you three themes that will be important to our success as a nation. They are:

– Identifying and leveraging competitive advantages;

– Seeking scale;

– Creating and retaining talent.

Identifying and leveraging competitive advantages

The manufacturing of goods and provision of services are becoming increasingly competitive, driven largely by technological change and scale. We have seen it play in front of our eyes: industries that were growing at phenomenal rates a few decades ago are now dead, or at best, are on life support. Travel agencies and anything print- from photos to newspapers and magazines are all becoming obsolete and are just a few examples of the disruption that is ongoing. Even our own financial services industry is being disrupted by technology, with the advances in mobile, internet and ABMs, heavily staffed banking and customer-facing financial services operations are becoming a thing of the past.

Therefore, to remain relevant, as a country we need to take some tough decisions and determine where our competitive advantages lie and what we need to focus on to transform our economy and the lives of our citizenry. Countries like Singapore, Panama and China have taken bold steps, focused on their competitive advantages and have been reaping the benefits.

At home, I often ask myself the question, why is it that the two industries that Jamaica is most known for, are among the most underinvested industries in Jamaica. Globally, Jamaica is known for track and field. Where that sport is concerned, we are to the world what Brazil is to football. Why then is Sports not a major contributor to GDP? Why are the major track and field events held in Europe and not in Jamaica?

Likewise, Jamaica is world renowned for reggae music. So why is it that so many reggae festivals are held in Europe and elsewhere but not in Jamaica? Kingston, Jamaica should be to Reggae, what Nashville Tennessee is to country music.

These are both industries that have the potential to dramatically impact the citizenry at the grass root. With focus and investment, they can ultimately help to create opportunities for economic growth, employment, and aid in addressing income inequality and by extension, some of the social ills of this country.

I actually had a dream about this. I dreamt that Jamaica in 2045 was the leading destination for global athletes, entertainers and those in the creatives, to hone their craft, live and vacation. In my dream, Jamaica’s international financial center initiative had allowed us to become the leading wealth management hub for world’s most famous athletes, irrespective of sport, and all the world’s largest wealth management firms were domiciled here.

Finding those niches and committing to them can result in transformation at scale, which takes me to the next theme, which is seeking Scale.

Scale

Jamaica has a population of 3 million people. The world population is just under 8 billion people. With globalization, enabled by technology, there is unprecedented access to a market that is almost three thousand times that of our own.

However, to be a meaningful global player, it is always better to do it as a collective. The population of the English Caribbean is twice the size of Jamaica at 6 million people. If you consider the entire Caribbean, we are speaking of a population of 44 million, which is a decent size. Collectively that is larger than the Canadian population, almost as large as Spain’s and two thirds the size of the United Kingdom.

As a collective, we have enough similarities and differences to make us a potent force on a global level. I am encouraged by the work being done by the Caribbean Private Sector Organization (CPSO), whose Agenda is that of supporting the full implementation of the CARICOM Single Market and Economy (CSME) and advancing Private Sector priorities in the Caribbean Community.

One of the recent initiatives of the CPSO is to bring together the regional capital markets. A topic that is back on the front burner, and I note Dr. Street-Forrest’s remarks earlier and that discussions also took place at the Trinidad & Tobago Stock Exchange’s conference in October last year. A notion of a regional exchange and/or market have been on the table for years; however, the relevance of such a construct couldn’t be more timely.

Talent

And finally, on the matter of the theme of talent – one of the biggest challenges post-pandemic is the global labor shortage and the prevalence of remote work. There are two aspects of this conversation. There is ensuring that we have the right competencies to take our economy to the next level; then there is the retention of same because being able to retain talent is just as important to our success as creating it.

The global shortage of labour in critical job functions poses a significant threat to countries like Jamaica that is large and sophisticated enough to be a hunting ground for talent. Historically, talent has migrated to other countries for more attractive compensation. With the increasing prevalence of remote work, we are now seeing international firms offering local talent attractive job opportunities, with them not having to migrate. The next effect of this is greater talent scarcity and upward pressure on wages, which can be problematic for businesses that can’t scale. This is a real threat that is not going away. As such, we not only just need to be aware of it, we need to convert it into an opportunity.

To benefit from the developments in the global economy and truly transform our economy, it is clear that Jamaica, and I dare say the region, cannot maintain the current status quo. In Jamaica, after taking a hit during the financial crisis of the 1990s, we are now seeing the revival of the entrepreneurial spirit aided by relatively low interest rates and financial innovation that has both reduced the cost of capital and increased the types of capital that is available.

However, given the trends that we are seeing in the international marketplace, to take advantage of this revival and the innovation that we are seeing in the financial services industry, we need to focus on these three themes – identifying and leveraging our competitive advantages, seeking scale and creating and retaining talent. I believe, ladies and gentlemen, that these three themes are the keys to the economic transformation we seek.

MULTI-BILLION DOLLAR FRAUD

Now shifting gears, to what has been making the daily headlines recently – the alleged multibillion occupational fraud that occurred at a securities firm in Jamaica. The incident is of grave concern to us as an industry. It is painful and heartbreaking, and unfortunately, it has set us back as a financial sector.

This incident, which is threatening confidence in the financial sector, does not reflect the state nor conduct of the securities industry as a whole. While fraud will never disappear, fraud of the magnitude that has been alleged, would not happen at a firm with a strong, well-functioning governance framework. In this instance, based on what is in the media, there appears to have been a significant break down in controls and governance.

The industry, as we know it today, has been around for almost three decades having withstood:

– The 2008 global financial crisis;

– The 2010 and 2013 local debt exchanges; and

– The fallout associated with the global pandemic, and more recently, the inflation crisis.

In all instances, during that period, the sector remained resilient, supported by ample capital and liquidity, with no systemic or entity failures. We are the same industry that has been noted for innovation and that has put Jamaica on the global map.

Our industry is plugged into the international markets, having adopted best practices in terms of processes, controls and governance. We are talking about world class settlement and custody platforms, and frameworks, driven by the use of best in class technology. All these technologies reduce the need for human intervention and as such reduces fraud. As such, it is not a surprise that historically, fraud in the sector is minimal.

The alleged incident is unfortunate; however, I cannot overemphasize that as individual firms and as a collective, we take fraud seriously and are against any activity that undermines the credibility of and confidence in the sector.

The Minister of Finance, the Dr. the Hon Nigel Clarke, at his press conference held yesterday, outlined sweeping changes to come, which includes the creation of a single regulator for prudential supervision; a role which is to be ultimately assumed by the central bank.

The JSDA supports actions geared towards restoring confidence in the securities market, as this is needed for us to the continue the contributions that the industry has been making over the past decade plus in building wealth for Jamaicans and providing capital to support the growth of businesses, the transformation of industries and the expansion of the Jamaican economy.

As an industry, our focus will now be on helping to restore public confidence and active engagement of the authorities during the consultation process over the next several months, as they seek to craft the new regulatory framework. This consultation process is critical as we seek to ensure that the outcome results in a healthy balance between prudential monitoring and that of continued market development and deepening.

There is a global market view that bank regulators are typically overly conservative, which is not necessarily supportive of the entrepreneurial underpinnings of the securities market which thrives on innovation, necessarily set within the context of prudent risk management. This is unlike a securities regulator that tends to facilitates market deepening and innovation, within the same context. Our fears, exist in this regard.

However, I can say the fear now is less than say a decade ago, as we are seeing a central bank that is much more market friendly. As such, I am cautiously optimistic that once we get pass the teething pains, we will establish a framework that consists of a robust regulatory oversight, that restores confidence in the sector, but also one that facilitates us achieving our aspiration of being the global niche player in financial services that we have the potential to become.

NCB CAPITAL MARKETS INITIATIVES

Prior to closing, as is customary, I will share a bit about what we have been doing at NCB.

i) GoIPO bond portal
In 2019, NCB Capital Markets pioneered the region’s first paperless end- to-end automated IPO solution called GoIPO. This platform allows investors to participate in equities public offerings and open accounts from the comfort of their homes or mobile devices.

In the coming weeks, we will be launching our GoIPO bond portal. This innovation will allow investors, not just our clients, a digital-first investment experience when investing in local Bond Offers, both public and private.

Available on the GoIPO platform, investors can view all transaction documents for a bond or note offer, digitally. They can complete their bond applications online and submit their accredited investor declarations. Clients will be able to add joint holders and submit their principal, coupon payments, and refund mandate, as well as choose how they would like to fund the transaction. Clients’ JCSD account information will be validated for accuracy to prevent the submission of incorrect data. The entire application process can be completed in less than ten (10) minutes.

Once investors submit their applications they will receive an order confirmation email, with the details of their order, and a follow-up email will be delivered indicating whether their application has been successful.

For all applications that are approved, GoIPO will generate a PDF version of the executed Bond/Note Purchase agreement that will be digitally stamped with the Tax Authority of Jamaica seal. All generated agreements will be attached to the approval email that clients will receive once the offer closes and allocations are complete.

With this innovation, investors can now have the same seamless investment experience when participating in bond offers, that they have come to know and expect for equity transactions.

ii) Continue our initiative with no fees for Junior Market IPOs

As a leading market maker and originator of transactions that span the entire spectrum of the capital structure in Jamaica and the wider Caribbean, we continue to improve and expand how we operate in the equity markets. We also continue to redouble our efforts in engaging our community of companies with private equity investments. Let’s elaborate on those two points, starting with the Junior market.

This year, NCB Capital Markets will resume waiving its arranger fees for companies that have engaged us to list on the JSE junior market. We see this strategy as key for unlocking economic growth by giving companies easier access to the capital markets.

As for private equity, NCB Capital Markets as well as our off-balance sheet platform, Stratus, is committed to supporting promising private companies that might not yet be ready to go public, by making equity investments.

We also provide coaching and strategic advice so that these companies are in a better position to go public in the future. Not being ready for listing does not mean that a company should not be able to access equity capital, and we are prepared to work with companies that are early in their life cycle, but that require equity today.

iii) Guyana entry

Late last year, we opened the doors of NCB Capital Markets (Guyana) Inc. as an advisory firm and now await our securities licence, which will allow us to arrange and deal in securities locally.

The pace, steepness and exponential nature of what is taking place in Guyana is a tremendous opportunity for Guyanese. To benefit, the Guyanese have to access the right scale and type of financing that can navigate fast-paced, commodity-based environment.

The Guyanese will need access to financing at each layer of the capital structure and in scales that single institutions may be prohibited by regulation from taking on their own.

NCB Capital Markets has been working in Guyana since 2014. In recent times we have executed structured finance-type transactions that set the stage for further development of Guyana’s domestic capital markets by enabling external flows of capital into Guyana.

With this, investors both inside and outside Guyana, can gain access to attractive investment opportunities and Guyanese businesses can gain access to a range of financing solutions, including private and public debt; senior, unsecured and mezzanine type syndicated debt; quasi debt and quasi equity; alternative asset type class financing; factoring private credit, etc.

Additionally, the people of Guyana can now gain access to investments created by the capital markets within best practices corporate governance and risk management frameworks and a regulated environment. This has the potential to redefine investment options and access for the people of Guyana and provide investment opportunities to investors across the region.

CLOSING

In closing, the linkage between entrepreneurship and the capital markets is evident. While we work to restore confidence, strengthen prudential regulations and continue to support the development of the capital markets, it is equally important that we are conscious of the global trends and our competitive advantages in creating policies and business strategies. Let’s protect the entrepreneurial spirit. The impact of huge negative shocks can have long, lasting effects that can take generations to undo.

Ladies and gentlemen, thank you for your continued interest in the JSE conference and by extension the development of the regional capital markets. I wish for you an informative and productive next 2 days.

Thank you.

Mr. Steven Gooden, CEO, NCB Capital Markets Ltd. addressed the opening night of the JSE Conference on the topic: “Revival of the Entrepreneurial Spirit and the Redefinition of the Capital Markets”.

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The Digital Business Roadmap for Jamaican MSMEs: A Critical Path to Digital Transformation

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Micro, Small, and Medium Enterprises (MSMEs) play a crucial role in the economic landscape of many countries, including Jamaica. As the global economy continues to evolve, driven by rapid technological advancements, it is important for MSMEs to embrace digital transformation to remain competitive and sustainable. This blog explores the concept of digital business, the importance of digital transformation for MSMEs in Jamaica, and provides a roadmap for achieving this critical transition.

Defining MSMEs in the Jamaican Context
In Jamaica, MSMEs are defined based on their number of employees, annual turnover, and total assets. According to the Ministry of Industry, Investment and Commerce (MIIC), micro enterprises have fewer than 5 employees and an annual turnover or total assets not exceeding JMD 10 million. Small enterprises employ between 5 and 20 people with an annual turnover or total assets between JMD 10 million and JMD 50 million. Medium enterprises employ between 21 and 50 people and have an annual turnover or total assets between JMD 50 million and JMD 150 million.

Understanding Digital Business
Digital business involves leveraging digital technologies to create new value in business models, customer experiences, and the internal capabilities that support core operations. The theoretical framework behind digital business is rooted in the integration of digital technologies such as the Internet of Things (IoT), artificial intelligence (AI), big data analytics, and cloud computing to enhance business processes, improve efficiency, and drive innovation.

Digitization, Digitalization, and Digital Transformation
To understand the journey towards a digital business, it is important to distinguish between digitization, digitalization, and digital transformation:

Digitization
This is the process of converting analog information into digital formats. Digitization in many ways is the first phase of any effort to digitally transform your business. However, it comes with its own set of challenges, especially for MSMEs in emerging markets like Jamaica. The two primary costs MSMEs will have to account for are technology investment and user training. The cost of acquiring the necessary technology (e.g., scanners, computers, and software) to digitize records can be difficult for small businesses, who mostly operate on tight budgets and may find it challenging to allocate funds for such investments. User training often involves upskilling the employees of the to use new digital tools and processes effectively. This training requires both time and money, which can strain the resources of small businesses. These challenges can hinder progress and make the initial steps towards digital transformation more complex and resource-intensive.

Digitalization
If you are able to successfully digitize your business, this increases the likelihood of the next phase of this journey, digitalization. This refers to the use of digital technologies to change a business model and provide new revenue and value-producing opportunities. This involves using digital technologies to change business models and create new value-adding opportunities.

One of the primary challenges with digitalization lies in integration complexities. Many small businesses operate with legacy systems that are not easily compatible with modern digital tools and platforms. Integrating these new digital systems with existing ones can be technically complex and expensive, often requiring specialized IT expertise. Additionally, data stored in different formats or locations can create silos, which make it difficult to establish a unified and streamlined digital workflow. Addressing these silos often necessitates substantial restructuring of existing processes, adding further complexity to the digitalization journey.

Another significant challenge is change management. Employees and management might resist new digital processes, particularly if they are comfortable with the traditional ways of doing things. This resistance can slow down the adoption of digital tools and diminish the effectiveness of digitalization efforts. Moreover, moving from analog to digital processes often requires a cultural shift within the organization. Encouraging a digital-first mindset among employees can be difficult, especially in organizations where traditional methods are deeply ingrained.

The skills gap also poses a considerable challenge during digitalization. This activity typically demands a higher level of technical expertise than digitization. Employees may need to acquire new skills to effectively use digital tools, analyze data, and manage digital workflows. However, finding or developing these specialized skills can be a significant hurdle for many MSMEs, particularly in regions where access to advanced training and education is limited.

Digital Transformation
This is a comprehensive, strategic approach that leverages digital technologies to fundamentally change how an organization operates and delivers value to its customers. Achieving digital transformation in a business requires a holistic approach that involves integrating technology, people, processes, and culture. To successfully achieve digital transformation, a business must start by developing a clear vision and strategy. This involves defining what digital transformation means for the organization and setting measurable goals that align with overall business objectives, such as improving customer experience, boosting operational efficiency, or expanding into new markets. Creating a detailed roadmap with specific timelines, milestones, and resources is essential for guiding the transformation process.

Fostering a digital-first culture is equally important. Leadership must drive the initiative, committing to the transformation and promoting a digital mindset across the organization. Engaging employees early in the process through training and development opportunities is crucial to help them adapt to new tools and encourage a culture of continuous learning and innovation.

Investing in the right technology is another critical step. Businesses should choose scalable solutions, such as cloud-based platforms, data analytics tools, and automation technologies that can grow with the company and streamline operations. It’s essential to select technologies that integrate well with existing systems to ensure a smooth transition. Optimizing processes is also key to successful digital transformation. Before implementing new technologies, businesses should assess their current processes to identify inefficiencies and areas for improvement. Automating repetitive tasks can save time, reduce errors, and allow employees to focus on more strategic activities.

Collaboration is vital in this journey. Digital transformation often requires cross-departmental collaboration to identify challenges and develop solutions. Encouraging teams to work together ensures that digital initiatives are aligned with business needs. Additionally, forming external partnerships with technology providers, consultants, and other businesses can accelerate the transformation process by providing access to new technologies and expertise.

Ensuring data security and compliance is critical as the business becomes more digital. Investing in robust cybersecurity measures protects data and systems from threats, while compliance with relevant regulations, such as data protection and privacy standards, is necessary, especially when handling sensitive customer information. Monitoring and adapting the transformation process is essential for success. Businesses should continuously track their progress using data and analytics to measure performance against goals. Being flexible and ready to adjust strategies based on feedback, new developments, and changing market conditions is vital for ongoing improvement.

Leveraging government and private sector support can also provide significant advantages. Many governments offer grants, tax incentives, or other support for businesses undergoing digital transformation. Collaborating with industry associations and private sector partners can offer valuable resources, training, and networking opportunities, helping businesses stay informed about the latest trends and best practices. Engaging customers in the transformation process is another important step. As new digital tools are implemented, businesses must ensure that customers understand how to use them by providing clear instructions, tutorials, and support. Regularly collecting customer feedback allows businesses to continuously improve their digital services, ensuring they meet customer needs.

Finally, planning for continuous improvement is crucial. Digital transformation is not a one-time project but an ongoing process. Regularly reviewing and adjusting the digital strategy helps businesses stay competitive and responsive to changes in the market. Staying informed about the latest trends in technology and digital business enables companies to anticipate changes and opportunities, ensuring they remain agile and innovative in a rapidly evolving digital landscape.

The Need for Digital Transformation in Jamaica
Jamaica’s Vision 2030 aims to make the country the place of choice to live, work, raise families, and do business. Achieving this vision requires a robust digital economy where MSMEs can thrive. Digital transformation is essential for MSMEs to improve efficiency, expand market reach, and enhance customer experiences. According to the Global Competitiveness Report 2019 by the World Economic Forum, Jamaica ranks 80th out of 141 countries in ICT adoption, highlighting the need for significant improvements in digital infrastructure and capabilities.

The Way Forward for MSMEs
Crafting a digital business roadmap requires careful planning and a thoughtful approach to several key factors. First, it’s essential to understand and address the evolving needs and preferences of customers in the digital age. Ensuring that digital initiatives can scale as the business grows is also critical, allowing for adaptability and responsiveness to market demands. Sustainability should be a central focus, with continuous updates and optimization of digital technologies to support long-term success. Collaboration is another crucial element, as leveraging partnerships and alliances can significantly enhance digital capabilities.

In conclusion, the digital business roadmap for MSMEs represents a vital strategy for achieving sustainable growth and competitiveness in today’s economy. By embracing digital transformation, MSMEs in Jamaica can unlock new opportunities, improve efficiency, and deliver enhanced customer experiences, ultimately contributing to the broader goals of Vision 2030.
© Germaine A. Bryan, 2024

Germaine Bryan is a business developer and startup coach supporting startups and MSMEs. Germaine is a skilled tactician in strategic business planning and has helped hundreds of entrepreneurs build their capacity to operate at scale. Germaine is the Managing Principal of Gerbry Business Ltd. For enquires. please email: germaine@gerbry.business

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Should Jamaica Abandon Its 2030 Vision?

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As a Jamaican employed in an organisation, you are worried about the future of our nation. It appears as if our country is stumbling along, barely keeping its head above water. At the same time, you are aware of the power of a corporate vision.
Why hasn’t someone done the same for our 2.8 million people on the island, and the other 2+ million in the Diaspora?

The good news is that something is already in place in the form of Vision 2030. But why isn’t it changing your everyday experience?

The truth is that we need help. The two main things Jamaicans care most about – economy and crime – seem not to have progressed for decades. Instead, we want the hyper-growth of Trinidad-2004 and Guyana-2023. Or maybe even the steady high performance of the Bahamas.

Or perhaps more importantly, we envy the low crime rates of Barbados or Cayman (formerly a Jamaican protectorate.) At some point, we led all these countries in these areas.

Today, we are working hard not to slip into the same zone as Haiti.

If our leading companies can accomplish so much long-term success, why can’t our country, we wonder? While a direct comparison is unfair, maybe there are a few things we can learn from best practices accepted in your organisation.

A Joined Up, Far-Away Future

A “joined-up” future is one that lots of stakeholders contribute to creating. In a company, it means engaging the board, executives, staff, customers, suppliers, regulators, local communities and more.

Shouldn’t our country do the same?

Based on my experience and queries of colleagues outside government…we don’t know that we already have a joined-up faraway future…at least on paper. In fact, the process used to create Vision 2030 Jamaica from 2003-9 is a world-class model. As such, I have shared it at in-person and online strategy conferences as a case study.

Perhaps you recognise the summary statement: “the place of choice to live, work, raise families and do business.” In times gone, it was the tagline of speeches given by the Governor General, Prime Minister, Leader of the Opposition and many others.

But I looked over the recent Budget Debate notes. I struggled to find much of a mention. A Google search didn’t help. Here are a few ways business people at all levels could intervene now to prevent what former leaders of our country seem to be telling us…this is too important to allow it to be eaten up in regular chakka-chakka.

Why the urgency?

With six or so years remaining until we cross the finish line in 2030, we can’t afford to waste a single moment in mid-race. Remember when Miller-Uibo glanced up at the screen and lost her lead in the 400m final of the 2017 World Championships? We are likely to stumble into defeat also as a nation, unless we pay attention to the following.

A Divisive Election – You and I watch the bitter combat underway in the USA. It appears that cooperation towards common goals is impossible. Within a year, our political parties will try to win the next election by emphasising their differences. This is natural. But it’s the opposite of the intent of Vision 2030 Jamaica. Just imagine if the board of your company were divided into opposing camps. Let’s intervene so that their attention remains on what is most important.

Continuous Inspiration – Your ability to recite our National Pledge and Anthem were picked up as a child. We could elevate Vision 2030 Jamaica to that level of importance, starting with the Forward by Dr. Wesley Hughes, which states in part:

“Today, our children, from the tiny boy in Aboukir, St. Ann, to the teenage girl in Cave, Westmoreland, have access to technologies that were once considered science fiction. They seek opportunities to realise their full potential. This Plan (vision) is to ensure that, as a society, we do not fail them. “

Updated Business-like Measures – How can we know the progress we have made from 2009-2023? Are the measurable results listed in the document beyond reach? Do we deserve an A-? or a D+?

How about fresh, intuitive measures of success which tell us whether or not Jamaica is becoming “the place of choice”? Let’s measure the length of lines outside the US and Canadian Embassies for those seeking permanent residency and how they are growing or shrinking.

Wheeling and Coming Again – Companies have no problem resetting fresh objectives when the old ones no longer do the job. In business, a strategy that is not working is replaced as soon as it’s found to be lacking.

We can do the same for Vision 2030 Jamaica to keep it relevant. This is the beauty of long-term strategic planning.

An honest read of the original document reveals that certain assumptions about the government’s capacity to lead the effort were unquestioned. Today, after over a decade of effort, we have learned much. For example, it’s hard to argue that the planning done in 2009 was enough.

While we once led the world in long-term national planning, we aren’t doing the same in the more difficult world of national strategizing and execution. But there’s time.

As the clock ticks down to 2030, things are likely to become more awkward for all of us. As you may imagine,. the human tendency is to avoid the issue entirely, hoping it goes away.

That may yet happen. But if we don’t confront the gaps in our initial attempt to create a joined-up, faraway vision, we’ll block our citizens from ever believing in a national vision again.

In fact, it would be better if it were declared null and void, than ignored. At least that would have some integrity and enable us to move on to a better national vision, lessons earned.

Better National Strategic Planning

And that is perhaps the biggest lesson for all concerned. We Jamaicans say that we are great starters, but poor finishers. In other words, we know how to kick things off. But when the going gets tough, we aren’t strong at bringing them to fruition.

Said differently, we don’t know how to keep promises just because we made them.

The point here is that Vision 2030, with some five to six years remaining, puts us in an awkward spot. But that’s a lie. We have put ourselves in an awkward spot.

At some point we were strong in envisioning great things. Like a company who creates BHAGs, our executive team gave its sacred honor to accomplish a great thing, like the framers of the Declaration of Independence.

However, we haven’t put in place mechanisms sufficient to rescue our current situation. At the current rate, we won’t be closer to being a “place of choice” than we were in 2009.

In a company it’s easier to find individuals or a team of leaders who may hold themselves accountable for a game-changing result. Often, the metrics are clear.

Unfortunately, no such clarity exists around Vision 2030. And given our impending election fever, it may not come from politicians. Instead, it’s time for business to step up and bring sound strategic planning to the accomplishment of the most important outcomes of our national lifetimes.

Let’s inspire each other to intervene so we can have what we already
know we want. It won’t happen any other way.

Francis Wade is the founder of the Jump Leap Long-Term Strategy newsletter and podcast, and operates a management consulting firm.

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Jamaica Is Pursuing The Strategy Of Mix Development Modalities

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“Tourism is a wealth creation and economic enrichment activity driven by the consumption and production patterns of people!”

“The strategy for destination exploitation of tourism is a composite of many modalities including business models and investment opportunities and not to be viewed through a myopic lenses.

Small highly service dependent economies such as ours must rely heavily on consumption to sustain economic growth, and expansion and Tourism has become the most effective way of achieving this as the propensity to CONSUME of the Tourist is 3-5 times that of the local! It means therefore that the expansion of the local market by increasing tourist arrivals creating a ‘critical mass’ is essential.

The proliferation of boutique hotels is not the answer when physical resources are limited. The strategy of Mix development modalities as Jamaica is pursuing, with mega hotels, boutique and sharing accommodation i.e. Airbnb etc is the most effective way forward.

The essential element of the strategy though is the production/Supply side of the wealth development equation! Jamaica’s focus must be on providing the goods and services that the Tourists demand to satisfy their consumption patterns! THATS WHERE THE REAL WEALTH OF TOURISM RESIDES! Agriculture, manufacturing, Creative Industries, Energy, Construction etc Then SERVICES; medical, financial, legal, entertainment, Restaurants, Shopping, transportation etc.

Please team let’s take a deeper dive in the confluence of economic moving parts that constitutes Tourism and recognize its elongated and expensive value chain so we can truly embrace the wealth it brings!”

Edmund Bartlett – Minister of Tourism Jamaica

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A Legacy of Leadership: Dr. Marlene Street Forrest and the Future of the Jamaica Stock Exchange

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“As the JSE looks to the future, it will be crucial to find a leader who can match, if not exceed, Dr. Street Forrest’s impressive legacy.”

Introduction
Dr. Marlene Street Forrest, who has led the Jamaica Stock Exchange (JSE) for nearly two decades, is set to retire, leaving behind a legacy of innovation and resilience. Her tenure has been marked by significant achievements and overcoming challenges in a male-dominated field, setting a high bar for her successor.

Accomplishments and Achievements
Dr. Street Forrest’s tenure at the JSE has been transformative. Under her leadership, the JSE has seen a notable increase in market activity, listings, and the introduction of new financial instruments.

She spearheaded the launch of corporate secretarial services to assist smaller companies in maintaining compliance and accurate reporting, which is crucial for their growth and sustainability​​.

In recognition of her outstanding leadership, Dr. Street Forrest received several prestigious awards, including the Order of Distinction in the Rank of Commander (CD) in 2016 and the Afroglobal Excellence Award for Global Impact from Canada the same year​.

Her efforts have not only enhanced the visibility and credibility of the JSE but have also contributed significantly to Jamaica’s economic resilience and development.

Overcoming Challenges
Leading the JSE in a male-dominated industry came with its challenges. Dr. Street Forrest often had to navigate skepticism and bias, proving her competence through relentless hard work and strategic vision.

The global financial crisis and the COVID-19 pandemic posed additional challenges, yet she successfully steered the JSE through these turbulent times by promoting market stability and investor confidence​.

Her focus on digital transformation and enhancing regulatory compliance helped the JSE remain a pivotal player in Jamaica’s economic strategy. She emphasized the importance of high-quality, timely financial information and investor education, which are critical for maintaining market integrity and attracting capital​​.

The Road Ahead: What Her Successor Needs
As the search for Dr. Street Forrest’s successor begins, the JSE requires a leader who can build on her legacy of innovation and resilience. Key characteristics for the next managing director include:

Visionary Leadership: The ability to foresee and adapt to market trends and technological advancements.
Strong Regulatory Knowledge: Ensuring compliance and fostering investor trust through transparent practices.
Commitment to Digital Transformation: Embracing new technologies to enhance market operations and accessibility.
Economic Insight: Understanding market dynamics and economic policies to drive growth and stability.
Collaboration Skills: Building strong relationships with stakeholders, including regulators, investors, and listed companies.

Benchmarking against global stock exchange leaders, the new head of the JSE should embody a blend of strategic foresight, regulatory acumen, and innovative thinking. Leaders like Adena Friedman of Nasdaq and David Schwimmer of the London Stock Exchange exemplify these traits, balancing market growth with robust governance.

Conclusion
Dr. Marlene Street Forrest’s leadership at the JSE has set a high standard, marked by significant achievements and resilience in the face of challenges. Her successor will need to bring a mix of visionary leadership, regulatory knowledge, and a commitment to digital transformation to continue driving the JSE’s growth and success. As the JSE looks to the future, it will be crucial to find a leader who can match, if not exceed, Dr. Street Forrest’s impressive legacy.

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Who is Leesa Kow? Managing Director, JN Bank and Chairman of the Caribbean Association of Banks (CAB)

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Leesa Kow is a distinguished leader in the financial sector, serving as the Managing Director of JN Bank and the Chairman of the Caribbean Association of Banks (CAB). Her career is marked by strategic vision and a commitment to digital transformation and financial inclusion.

Early Career and Professional Background
Leesa Kow joined JN Bank in 2003 as Senior Manager for Remittances. Her leadership capabilities quickly propelled her through various senior roles, including Executive of Marketing, Sales, and Promotion in 2006, and General Manager of JN Money Services Limited (JNMS) in 2008. At JNMS, Kow oversaw significant expansion, growing the company’s reach from 200 branches and agents to over 8,000 across three continents within three years, cementing JN Money as the largest remittance brand from the Caribbean​​.

Leadership at JN Bank
Kow’s ascent to the role of Managing Director in July 2022 followed her tenure as Deputy Managing Director from November 2017. As Deputy Managing Director, she was instrumental in implementing JN Bank’s digitalisation initiatives, enhancing operational efficiency and customer service. Her strategic focus on technology and innovation has been pivotal in transforming JN Bank into a more agile and customer-centric institution​​.

Contributions to the Financial Industry
Beyond her work at JN Bank, Kow has significantly impacted the broader financial services sector. Her tenure as president of the Jamaica Money Remitters Association from 2012 to 2017 showcased her leadership in advocating for the remittance industry. In October 2022, she was elected Chair of the Caribbean Association of Banks (CAB), where she continues to influence regional banking policies and practices​.

Educational Background
Leesa Kow’s academic credentials are impressive, holding a Bachelor of Science degree in Management Studies and Accounting (First Class Honours) and a Master of Science degree in International Business (Distinction) from The University of the West Indies. These qualifications underscore her strong foundation in business leadership and strategic management​​.

Impact and Vision
Under Kow’s leadership, JN Bank has made significant strides in digital transformation, positioning itself as a forward-thinking financial institution. Her vision for the future includes continued emphasis on innovation, customer service excellence, and financial inclusion. Kow’s influence extends across the Caribbean, as she leverages her roles to advocate for advancements in the banking sector and to support regional economic development.

Leesa Kow’s journey from senior manager to managing director of JN Bank exemplifies her dedication, strategic foresight, and impactful leadership. Her contributions to the financial sector and her role in shaping regional banking policies make her a notable figure in Caribbean banking, inspiring the next generation of female leaders in finance.

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