Most entrepreneurs are hustlers, says new report
MOST Jamaican entrepreneurs hustle without a growth strategy, showed a recent academic study.
Also, total entrepreneurial activity (TEA) in the country last year dipped by over one-third the level recorded five years earlier, when there was a recession, according to the latest Global Entrepreneurship Monitor (GEM) report.
"The results show that Jamaican entrepreneurs exhibit limited business growth aspirations," said the report. "Established business entrepreneurs expected limited job growth in the next five years in comparison to the early-stage entrepreneurs who expected to hire more employees.
"Overall, most businesses only expected to hire few employees over time.
The GEM study found that some 21 per cent of entrepreneurs surveyed in Jamaica expected to have no one employed in the business in five years, 18 per cent of the entrepreneurs believed that they would have at least two employees and 16 per cent believed that they would have five employees working in the business in five years.
It also showed that just 24.5 per cent of the population surveyed were employed by others in full-time work, with the self-employed often having creating jobs out of necessity.
Jamaica's TEA, which represents the proportion of entrepreneurs in the working-age population, stood at 13.8 per cent in 2013.
This figure remained flat year on year but dipped from the five-year high of 23 per cent in 2009.
"When the recent global recession began in 2008, the TEA rate was 15.6 per cent," said the GEM, which was released this week by local partner University of Technology (UTech). "It climbed to 23 per cent in 2009 probably due to the employment shock of the recession resulting in rising unemployment."
Some 92 per cent of businesses operated with less than five employees while 35 per cent operated as a sole trader (no employees).
Overall, the report stated that 36.5 per cent of respondents earned below the minimum wage $195,360 annually, the equivalent of zero to US$1,783.62, this also having "implications for the ability of respondents to accumulate funds for business start-up".
Necessity accounted for the main motive for involvement in entrepreneurship for early-stage entrepreneurs TEA at 45 per cent.
Planning Institute of Jamaica (PIOJ) data indicates that the total unemployed labour force increased by 34,200 (20.4 per cent) persons in July 2013 compared with the level recorded in July 2012.
"The 2013 TEA data was consistent with the 20 per cent increase in unemployment rates as the majority of early-stage entrepreneurs TEA were based on necessity (45 per cent) with 37.9 per cent being motivated solely by opportunity," the report said.
The GEM is the largest and most authoritative comparative study of entrepreneurship, serving as a database for regional and international comparative research.
UTech through its College of Business and Management will launch the report with data from over 2,000 respondents.