Ayoo hear how Dis Book Sense, No Street hustler Sense Mr TK A talk...

now bout business man. He cyant even run wan cake shop and he talk bout businessman. Hey hey hey...

================================

The entrepreneur and Guyana’s economic development

By Tarron Khemraj On May 20, 2018 @ 2:12 am In Business Page |

Next week I am presenting a paper at the first entrepreneurship conference to be hosted by the School of Entrepreneurship and Business Innovation, University of Guyana. My task is to tease out the role, if any, the entrepreneur plays in Guyana’s economic development. This is not a straightforward assignment, so I consulted the economics literature. At minimum a definition of entrepreneurship is necessary before we can discover its role in development. In my presentation I argue that if entrepreneurship is contributing to Guyana’s development, and will continue to do so, it must have the potential to influence the very long-term trend per capita income. The cycle around the trend will be determined by short-term business sentiments and external shocks.

Economists define entrepreneur as a risk-taker, innovator and someone in control of a production technology. The person owns a business and as such is the also the manager of the business. She looks for opportunities and in doing so is allocating society’s resources, hopefully in an efficient useful manner. However, not all managers are business owners. For example, the CEO, chief executive officer, company secretary and other management of a publicly traded company may not be owners of the company. They manage the company that is owned by shareholders, but they can also innovate and they take risk, albeit with the funds of shareholders. The mismatch between management and ownership could result in information-based problems and abuse. A major issue in corporate finance is to address exactly this problem.

The same can be said about state-owned corporations like GuySuCo. The company is owned by the people of Guyana, but it is managed by professionals. An enlightened government would be able to design an incentive system to make sure the managers’ interest is aligned with the best national interest. The task of government is to minimize the kind of incentive problems that can occur. Therefore, the second point of my presentation is the University of Guyana should be thinking about management, public and private, as an equal complement to entrepreneurship. In my time as a student there, the university had a general management degree that was closely aligned to the economics programme. I cannot fathom how one can study entrepreneurship without a broad perspective in the natural and social sciences and statistics, as well as arts and literature. Jeff Bezos and others are well aware of the necessity of a broad education, thus pointing out how well liberal arts students do as entrepreneurs.

We can think of entrepreneurs as the self-employed person out of necessity. These folks could be our vendors and small shop owners. Another category would be opportunity-based entrepreneurs and yet another category would be disruptive or innovative entrepreneurs. The use of the word disruptive goes back to Schumpeter who saw Capitalism as a malleable system of creative destruction. The entrepreneur, according to Schumpeter, is the innovator churning out new technologies that destroy old ones, but overall do more good than harm. Schumpeter got the metaphor of creative destruction from the Hindu Trinity: Brahma, Vishnu and Shiva.

It is important to consider what we mean by technology. A technology is a process of production that transforms labour input, machine, land, management, etc, into useful goods and services. We have technological innovation when a new technology can produce the same output with less inputs or produce more output with same amount of inputs. A technology does not necessarily mean a gadget like the iPhone or laptop computer, although they become an important input in the management decision. A technology could be a management method that organizes businesses better for greater productivity. For example, containerized shipping, just-in-time management and 3D printing are important innovations resulting in efficiency gains. While the former two enhance efficiencies for existing businesses, 3D printing is creating small and medium-scale enterprises catering for niche and heterogeneous demands.

In addition, there are fundamental innovations that result from the basic sciences invented at universities, government research labs and private labs. There is a debate among economists, however, that the new internet-based technologies of today are not creating the kind of broad prosperity like old ones such as the light bulb, power generation, steam ships, air travel, automobiles and many others. This prompted the great Joseph Stiglitz to say that the invention of toilet was much more important than invention of Facebook.

In the Guyanese context, we can think of the entrepreneur as producing in the tradable sector, non-tradable sector and underground economy. The tradable sector is the one which is the net earner of foreign exchange. This would be your exporter of various kinds. Innovation would be necessary for export success since preferential prices are gone. The non-tradable sector would be the net user of foreign exchange, but involves important production activities where innovation can take place. This sector includes education, healthcare, legal services, telecommunication, internet providers, accounting firms, waste management, builders and contractors, barber shops and all the small mom and pop businesses. Clearly this sector presents the potential for innovation, particularly in the area of drainage of the coastal plain. The accounting or legal firm are non-tradable and likely opportunity-based.

The underground economy includes the small itinerant vendor or the big time smuggler of all things like fuel, gold and illegal substances. The curb side vendor is non-tradable and driven by necessity. He would probably prefer employment with benefits in a large corporation. It is true the gold or drugs smuggler might bring back some foreign exchange, but this cannot compensate for the destruction and corruption of legal management and police work. It also redirects human resources from the official to criminal economy. It destroys human capital more than migration. This can never be a good thing as it destroys the society’s capacity to generate new systems and innovation. Furthermore, money laundering inflates asset prices, such as homes and land, thus making life more difficult for teachers, nurses, business managers, civil servants, vendors and others. The only innovation the smuggler does is in cheating, corrupting and undermining, which can never result in broadly shared prosperity.

No doubt, entrepreneurship and management – both public and private – will be crucial if Guyana is to escape the natural resource curse. The reader can discern which sector is more likely to have contributed to Schumpeterian innovation and will continue to do so. I think tremendous possibilities exist in the non-tradable sector as well. Over the years, I have identified a few of the deep constraints inhibiting the private sector in Guyana. I provided some trend analysis in my paper and a discussion of deep structural constraints that must not be misplaced for prima facie constraints. For example, survey data from an IDB study indicated that financing is a problem. As a result, many small businesses self-finance. Self-financing, however, has been around since before and after 1838 in Guyana when Africans pooled savings for buying land. Financing is therefore a prima facie constraint, signalling a deeper constraint pertaining to the contestability of banking in Guyana. Contestability means the extent to which new banks are challenging incumbents for entry. If the banking sector is not very contestable, then it is no surprise why small enterprises have to self-finance. This is important from a policy standpoint. If we focus on the prima facie constraint, then we look towards microfinance. If we think about contestability, then we cannot take industrial policy and development banking off the radar.

My paper closes off with a mathematical model of growth scenarios, determined by innovation, under the following: (i) central government provides the public goods that complement private enterprise; (ii) central government has a predatory relationship with private sector; and (iii) central government receives oil rents and has to decide whether to be developmental or predatory. The results point to multiple equilibria that depend on the initial conditions. There are hints of hit and/or miss for Guyana for the next 50 years.

Copyright © 2017 Stabroek News. All rights reserved.

Original Post
Labba posted:

now bout business man. He cyant even run wan cake shop and he talk bout businessman. Hey hey hey...

================================

The entrepreneur and Guyana’s economic development

By Tarron Khemraj On May 20, 2018 @ 2:12 am In Business Page |

Next week I am presenting a paper at the first entrepreneurship conference to be hosted by the School of Entrepreneurship and Business Innovation, University of Guyana. My task is to tease out the role, if any, the entrepreneur plays in Guyana’s economic development. This is not a straightforward assignment, so I consulted the economics literature.

Copyright © 2017 Stabroek News. All rights reserved.

General approach -- to tease out the role --   perhaps meaning to throw out unrelated thoughts, let out a big big big burp, then smile broadly.

Demerara_Guy posted:
Labba posted:

now bout business man. He cyant even run wan cake shop and he talk bout businessman. Hey hey hey...

================================

The entrepreneur and Guyana’s economic development

By Tarron Khemraj On May 20, 2018 @ 2:12 am In Business Page |

Next week I am presenting a paper at the first entrepreneurship conference to be hosted by the School of Entrepreneurship and Business Innovation, University of Guyana. My task is to tease out the role, if any, the entrepreneur plays in Guyana’s economic development. This is not a straightforward assignment, so I consulted the economics literature.

Copyright © 2017 Stabroek News. All rights reserved.

General approach -- to tease out the role --   perhaps meaning to throw out unrelated thoughts, let out a big big big burp, then smile broadly.

How yuh comment like wan stale mildew bread fram lass week? Hey hey hey...

Labba posted:
Demerara_Guy posted:
Labba posted:

now bout business man. He cyant even run wan cake shop and he talk bout businessman. Hey hey hey...

================================

The entrepreneur and Guyana’s economic development

By Tarron Khemraj On May 20, 2018 @ 2:12 am In Business Page |

Next week I am presenting a paper at the first entrepreneurship conference to be hosted by the School of Entrepreneurship and Business Innovation, University of Guyana. My task is to tease out the role, if any, the entrepreneur plays in Guyana’s economic development. This is not a straightforward assignment, so I consulted the economics literature.

Copyright © 2017 Stabroek News. All rights reserved.

General approach -- to tease out the role --   perhaps meaning to throw out unrelated thoughts, let out a big big big burp, then smile broadly.

How yuh comment like wan stale mildew bread fram lass week? Hey hey hey...

DG still jealous of you TK

Mars posted:
Labba posted:
Demerara_Guy posted:
Labba posted:

now bout business man. He cyant even run wan cake shop and he talk bout businessman. Hey hey hey...

================================

The entrepreneur and Guyana’s economic development

By Tarron Khemraj On May 20, 2018 @ 2:12 am In Business Page |

Next week I am presenting a paper at the first entrepreneurship conference to be hosted by the School of Entrepreneurship and Business Innovation, University of Guyana. My task is to tease out the role, if any, the entrepreneur plays in Guyana’s economic development. This is not a straightforward assignment, so I consulted the economics literature.

Copyright © 2017 Stabroek News. All rights reserved.

General approach -- to tease out the role --   perhaps meaning to throw out unrelated thoughts, let out a big big big burp, then smile broadly.

How yuh comment like wan stale mildew bread fram lass week? Hey hey hey...

DG still jealous of you TK

 Me na seh dat. Me seh he comment like last week bread. Hey hey hey...

"This prompted the great Joseph Stiglitz to say that the invention of toilet was much more important than invention of Facebook."

FB, SKYPE, WHATSAPP etc saved the worldwide diaspora a fortune in long distance calls.

BTW Labba, ask your friend TK why GY is one of the most expensive destinations in the world to call.

 

Sunil posted:

"This prompted the great Joseph Stiglitz to say that the invention of toilet was much more important than invention of Facebook."

FB, SKYPE, WHATSAPP etc saved the worldwide diaspora a fortune in long distance calls.

BTW Labba, ask your friend TK why GY is one of the most expensive destinations in the world to call.

 

Dat pot solt Mr TK seh how everthing expensive in Guyana. Dem economis bais aware de ting create efficiency. But dem not employ de people like ole time. 

Labba posted:
Sunil posted:

"This prompted the great Joseph Stiglitz to say that the invention of toilet was much more important than invention of Facebook."

FB, SKYPE, WHATSAPP etc saved the worldwide diaspora a fortune in long distance calls.

BTW Labba, ask your friend TK why GY is one of the most expensive destinations in the world to call.

 

Dat pot solt Mr TK seh how everthing expensive in Guyana. Dem economis bais aware de ting create efficiency. But dem not employ de people like ole time. 

Oye bhai,what is the cause ?

Was watching a video of Sharma visiting a market on the EC,asking vendor the prices for their goods,it's unbelievable high when convert to $US.

Labba posted:
yuji22 posted:

We bai Labba returned after a lil while. I thought that them cane cutter Bhunjay de labba, I was wraang.

Mr Labba was busy cuttin he cane foh mek juice. Hey hey hey...

Like you gat wan danky kyart ah sell cane juice now? Bai, anything for an honest living heh?

Billy Ram Balgobin posted:

This guy TK has a passion for economics.  I see him as someone who will be on the political scene for a very long time. He may have erred with his choice of political parties but that did not devalue him as a technocrat who can lend his skills for a better Guyana. 

I have to admit that I agree.

Dat Bai TK made a blunder by siding with the wrong side. Look at his partner who was instrumental in the marriage of the AFC/PNC, he ran away to Germany.

Going forward, TK has a lot to offer Guyana but he needs to take a more neutral approach. A future minister of finance awaits him if he plays his cards right.

Then again, will he want to leave his cushy job and security to bust his chops for Guyana ? I think not.

skeldon_man posted:
Labba posted:
yuji22 posted:

We bai Labba returned after a lil while. I thought that them cane cutter Bhunjay de labba, I was wraang.

Mr Labba was busy cuttin he cane foh mek juice. Hey hey hey...

Like you gat wan danky kyart ah sell cane juice now? Bai, anything for an honest living heh?

Me gat wan lil push cyart. De dankey na cooperate dese days suh me have to push. Me went parika backdam and ruby backdam all day yesterday search foh lil peppah foh sell when de cane slow. Hey hey hey...

Leonora posted:

Hey, hey, hey, Labba is a comedian. If things don't work out with Politics, please consider SNL.

Me Labba not into politics. Me does ketch me patwa and hourie fish foh sell and sell juice and peppahs. Trump mek me na come Rockaway gas station by Mr Neroo area foh wuk foh US$. 

Ayoo hear how dis man a talk bout businessman and he na know foh fun cake chap. Me gat business foh sell cane juice pon me dankey cyart and me peppah dem. Me know business and me know how foh innovate. Yuh pay police brive and that is innovation. Hey hey hey...

=============

Innovation

 

Economists think of technology as knowledge of the production process of a firm or industry. As mentioned in my previous column, a machine like the computer, iPhone or drone is not the technology. Instead, these are examples of physical capital that must be distinguished from financial capital of the accountant. The knowledge or ideas of how to transform physical capital, land, workers, etc, into useful goods and services for society is the technology.

I would go as far as to make a controversial point, which is nowhere in the scholarly literature, that a Guyanese constitutional overhaul can be seen as a crucial social technology. An enlightened constitution that decrees (i) co-operation and (ii) credible electoral threats from independents can be seen as embodying a set of ideas that produce a social good: the minimization of the harmful effects of strategic pro-ethnic voting. Strategic voting means that about 85% of Guyanese vote not because they particularly love their respective political party or leader, but to keep the other side out from power because they perceive an economic security dilemma. This is the source of the prisoners’ dilemma trap I wrote about a few years ago.

Many economists might not agree with my aggregate or social technology as the concept is mainly seen as a micro or firm-level issue. I maintain that the ability to innovate on existing technologies or imitate and even invent new ones is hindered by the present macro political structures in Guyana. Therefore, why can’t we view enlightened constitutional engineering as a socio-economic technology?

Innovation, therefore, is the ability of the managers and entrepreneurs of the firm to tweak existing technologies. The entrepreneur or CEO may invest in research and development so as to come up with new ways of improving on existing production knowledge. Technology and the innovation process are really knowledge-based.

To emphasize this point further, consider two firms with the same machines. In spite of the similarity of machines, one firm has a greater productivity. This is a clear case of one firm being inefficient relative to the other. The obvious culprit here is the manager or entrepreneur of the inefficient firm lacks the knowledge of how to combine the workers and machines optimally. This scenario played out between General Motors and Toyota. GM tried emulating Toyota’s manufacturing technology, but just could not achieve the same productivity. This scenario can be extrapolated to the entire nation, and probably relevant to my parallel socio-economic technology.

When the history of GuySuCo is written it will be clear that the reason for the demise of the industry was not really the loss of preferential prices, but the depreciation of the stock of knowledge embodied in the industry’s research labs, field management and general knowledge of the factory and field processes. This stock of knowledge is vital if the industry is to innovate by transitioning to other outputs such as bulk alcohol, public drainage, molasses, ethanol and bagasse power; all while maintaining the most versatile feedstock sugarcane. No political leader in Guyana since the 1980s asked the kind of questions necessary to keep the stock of knowledge intact. The newer bright ones returning with a proper master’s get this, however.

The Global Innovation Index (GII) is published by INSEAD, a business school based in France, Abu Dhabi and Singapore. It measures innovation using input and output factors of innovation. This index recognizes that firm-level innovation is dependent on many factors at the macro level as well as the micro.

The table shows data from the 2014 report. Other reports have since emerged, but I chose 2014 because Guyana, as well as several Caribbean economies, was last included in that year. The index is made up of input and output factors of innovation. The input factors include institutions such as political, regulatory and business conditions. For example, the political dimension includes government effectiveness and safety. However, it says nothing about whether the constitution and electoral framework of the country are consistent with political stability in an ethnically bi-communal society such as Guyana.  The regulatory environment, bankruptcy laws and business environment make up other institutional factors.

Human capital and research capacity form another input pillar. This includes graduates in engineering and the sciences, spending on research and development, university ranking and others. Infrastructure forms the third input pillar. It includes the usual factors such as electricity generation, gross capital formation and others. Moreover, the index places environmental sustainability as an important aspect of infrastructure. Market sophistication is seen as essential for innovation and it is the fourth innovation input pillar. This includes credit market development, market capitalisation, investor protection, domestic market scale, tariff and trade matters, and others.

Business sophistication is the fifth input factor for innovation. It includes such conditions as the consulting collaboration between businesses and university, firms offering formal training, female employment with advanced degrees, patents, research collaboration between business and university, and other variables. Speaking about business-university collaboration, I was at the recently concluded conference held by UG’s School of Entrepreneurship and Business Innovation. One thing that was obvious to me is the econometric help the university could provide to commercial banks and organizations like IPED. Folks like my good friend Mr Sukrishnalall Pasha can easily come up with probability models for more objective risk assessment of potential borrowers.

The innovation output pillars include two broad measures: (i) knowledge and technology outputs and (ii) creative outputs. These can include variables such as high-tech exports, ICT services export, new business formation, peer-reviewed publications, patents received, growth rate of per capita GDP, high-tech manufacturers, computer software spending and others. The GII is therefore a simple average of the input and output innovation indicators.

I selected the GII score for a group of small countries. They all face the same global shocks like Guyana. In 2014, 143 countries were ranked on the various input and output factors of innovation. Switzerland was ranked highest on the index with a GII score of 64.78 out of a total of 100. The United States placed with a rank of 6 and score of 60.09.

Guyana was ranked as 80 with a score of 32.48 out of 100. The efficiency ratio, which measures the conversion of innovation inputs into outputs, was 0.74. The efficiency ratio of Guyana is surprisingly high. However, the failures associated by high-risk technology innovation is likely to be higher and therefore those countries could have a lower efficiency ratio. In other words, the spillover effect from sophisticated manufacturing and other applications are very different, thereby likely affecting the very long-term trend of the growth rate in different ways.

Singapore is ranked as 7 overall, but has a lower efficiency score of  0.61, possibly indicating the pursuit of more high value and risky technologies.  Barbados’ rank of 41 represents the highest among Caribbean economies, which as a group have lagged other regions in innovation. Resource dependent Trinidad and Tobago and Botswana both ranked below Guyana in terms of the score and efficiency ratio. According to the GII, Singapore and Israel are two of the most innovative small open economies. Israel is known for integrating its diaspora in business, financial, scientific and other matters. There might be something to learn here.

 

Copyright © 2017 Stabroek News. All rights reserved.

Leonora posted:

Our dear Labba is doing a great job promoting his alter ego TK. 

I spent all weekend in Macon and Dhanraj was there.  We were there celebrating my Harvard-bound nephew’s accomplishments.  

Him and me agree that Banna TK is a smart guy, but he gatt to start speaking to the man in the street. Dem people nah know one skont wah he sayin!

Baseman posted:
Leonora posted:

Our dear Labba is doing a great job promoting his alter ego TK. 

I spent all weekend in Macon and Dhanraj was there.  We were there celebrating my Harvard-bound nephew’s accomplishments.  

Him and me agree that Banna TK is a smart guy, but he gatt to start speaking to the man in the street. Dem people nah know one skont wah he sayin!

You mad bai. Dat man TK doan have street sense foh talk to dem peopkle pon de street. He only gat theory sense. Look how ayoo street sense ge able wan glory Exxon aile contract. Hey hey hey...

ksazma posted:
Leonora posted:

Our dear Labba is doing a great job promoting his alter ego TK. 

If it wasn't fuh Labba, we wouldn't even know TX exists. 

Hey hey hey...de man TK get kick by Granger. Jagdeo dey kick he. AFC kick he. Hey hey hey...

Labba posted:
ksazma posted:
Leonora posted:

Our dear Labba is doing a great job promoting his alter ego TK. 

If it wasn't fuh Labba, we wouldn't even know TX exists. 

Hey hey hey...de man TK get kick by Granger. Jagdeo dey kick he. AFC kick he. Hey hey hey...

Bai Labba, you know a lot about de man TK. Wanda why?

skeldon_man posted:
Labba posted:
ksazma posted:
Leonora posted:

Our dear Labba is doing a great job promoting his alter ego TK. 

If it wasn't fuh Labba, we wouldn't even know TX exists. 

Hey hey hey...de man TK get kick by Granger. Jagdeo dey kick he. AFC kick he. Hey hey hey...

Bai Labba, you know a lot about de man TK. Wanda why?

Bai me read GNI foh year. Hey hey hey...

Labba posted:
ksazma posted:
Leonora posted:

Our dear Labba is doing a great job promoting his alter ego TK. 

If it wasn't fuh Labba, we wouldn't even know TX exists. 

Hey hey hey...de man TK get kick by Granger. Jagdeo dey kick he. AFC kick he. Hey hey hey...

an' Labba gat wan lash from Accuri.

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