Preliminary research from the Mona School of Business and Management indicates that some key sectors which drive export and economic growth have declined in Jamaica.
The assertion was made by Dr. William Lawrence, Director of Professional Services Unit at the Mona School of Business and Management and Lead Researcher for the study of Jamaica’s performance in the Global Competitiveness Survey at a public forum hosted by the School on Wednesday November 7, 2018.
During the forum, which was held under the theme Transforming Jamaica’s Economic Competiveness, Dr. Lawrence noted that the Global Competitiveness Report 2018 published by the World Economic Forum (WEF) recommended that Jamaica substantially boost its exports in order to achieve meaningful growth of Gross Domestic Product (GDP). .
He said an analysis which was conducted by a team at MSBM, using the Planning Institute of Jamaica’s GDP growth data, mapped three export-producing sectors, namely manufacturing, mining and agriculture over the past 35 years. The findings showed that the GDP growth in mining and manufacturing together accounted for 63% of the total GDP variability.
“From 1982 to 2017, mining as a percent of GDP has fallen from 6% to 2%...manufacturing as a percent of GDP in terms of contribution has fallen from 16% to 8.6%. We are seeing that the sectors that influence growth, to the extent of 63%, are on the decline and if these sectors are declining, we have some decisions to make,” Dr. Lawrence said
He emphasised that Jamaica needed to translate business dynamics into meaningful innovation which, in a country like Jamaica, must implement digital technologies to drive the export agenda to boost market size and generate GDP growth.
“When you read the report, you will see that for Jamaica, market size in terms of market reach is a perpetual problem, which is arguably a result of the lack of export activity. Trinidad, for example, has a larger market size, because of their higher levels of export activity,” he noted.
Kamau Chionesu, Co researcher and Lecturer of Economis and Business Research at the MSBM, noted that there were major changes in the methodology of the index for the WEF 2018 Report and this was a reflection of the reduction in subjective opinions.
In explaining Jamaica’s current position, he said the new index was very different from the previous versions of the Global Competitiveness report and, as such, the data reported prior to 2018 was not comparable.
‘The current index represents a structural break with the past in the way it has been conducted, so we may see where Jamaica has fallen behind even though we have improved in many areas,” he said
The researchers concluded that the private and public sectors need to increase their R&D budgets to embrace digital-led innovation and export growth. They also urged more companies to obtain equity capital by listing shares on the Jamaica Stock Exchange.
Following the research presentation was a high profile panel discussion on how to improve Jamaica’s competiveness in the global space, featuring Howard Mitchell, President of the Private Sector Organisation of Jamaica, Brian Wynter, Governor of The Bank of Jamaica, Mrs. Marlene Street Forrest, Managing Director, Jamaica Stock Exchange, Mr Hugh Johnson of the Small Business Association. and Dr, David McBean, Executive Director, MSBM.
The panellists concluded that targeted human capital development is needed to boost the MSME sector and others with an emphasis on building broad-based digital competences in Jamaica. They agreed that the Act now tabled with the Government to modernize the Bank of Jamaica will promote price stability and financial system sustainability. The panellists, however, warned that R&D expenditures should not merely create inventions but must truly innovate by taking new products to export markets.
The public forum was hosted by Mona School of Business and Management, in partnership with the Bank of Jamaica (BOJ), the Private Sector Organization of Jamaica (PSOJ) and Jamaica Stock Exchange as part of MSBM’s continuing role to advance scholarship by connecting academia and industry to create research-based solutions.