How about a venture capital task force, Dr Phillips?

Wednesday, September 10, 2014

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OVER the last three days, the Development Bank of Jamaica (DBJ) mounted its second annual venture capital conference at the Jamaica Conference Centre in downtown Kingston. The unassuming but effective Managing Director Milverton Reynolds and his team must be congratulated for this timely event.

Finance Minister Dr Peter Phillips has stabilised the macroeconomic fundamentals and, under duress, has implemented reforms stipulated by the International Monetary Fund (IMF). Confidence in the economy is returning, as noted by Messrs Richard Byles and Christopher Zacca. These are necessary, if insufficient, conditions for economic growth, which is the only solution to Jamaica's economic problems.

To get high rates of sustained economic growth it will be necessary to earn more foreign exchange from existing export sectors, such as tourism, and identify and establish new international competitive ways of earning foreign exchange. International competitiveness and new exports will require bright, creative, and fearless entrepreneurs, plenty of whom we are, fortunately, blessed. Most of them are young, many of them are women, but there are some veterans with proven track records as well.

Jamaica is bursting with entrepreneurial talent, which is being retarded and stifled by lack of capital. They are the key to Jamaica's economic future, but they need venture capital to make films, do animation, manage athletes, do back-office operations, edit publications by Internet, and a host of other innovative ideas that mere mortals do not think of trying.

These new foreign exchange earning possibilities are not impeded by the traditional constraints which bedevil small developing economies such as Jamaica. They are not constrained by lack of economies of scale, high energy costs, poor infrastructure, a depreciating exchange rate, location, and government bureaucracy.

These new opportunities are based on initiative, human capital, knowledge, information, and IT. The viability is not dependent on the condition of the Jamaican economy, instead they reflect trends in the global economy.

The objectives of a productive conference is not to discuss the state of the world, but to change the world. The objective of the venture capital conference is to improve the economic growth of the Jamaican economy. The immediate benefit is the sharing of knowledge by the participants, who would have found the very practical workshop by Prof Josh Lerner, professor of investment business at Harvard University, to be quite useful.

Ultimately, the conference must be followed by policy recommendations. There is such a wide array of issues and ideas to be synthesised and we suggest that Minister Phillips establishes a venture capital task force to produce a report by January next year. This report would provide a raft of policy recommendations which would accompany the Budget for the fiscal year 2015/16.

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