2021 Framework Conditions Review

GEM’s Jamaica Team participated in just the NES survey in 2021. However, valuable insights into its state of entrepreneurship can still be gleaned from these results. Like many lower-income economies there is an identified need for more available financing, less burdensome regulation and better infrastructure (commercial and physical). However, experts also identified a couple of key strengths of Jamaica, in the areas of education and cultural values, which can boost entrepreneurial activity in future.

On the conditions related to finance, experts scored Jamaica a 3.6 on both Entrepreneurial Finance and Ease of Access to Entrepreneurial Finance. Both were about average scores for GEM Level C economies. Like many of its peer GEM economies, Jamaica will need to improve its available financing to help entrepreneurs pursue new opportunities and to have money for hiring. Jamaica’s informal economy is estimated to be quite large, which contributes to a deleterious cycle. Financial institutions will not lend to informal new businesses, which keeps these new businesses from growing, which limits the number of businesses available for financing. The state may need to create more financing programs directly targeted at entrepreneurs to incentivize financial institutions to join in the market.

Surprisingly, experts gave a 4.5 score on the condition Government Policy: Taxes and Bureaucracy, third highest among GEM Level C economies. In past World Bank Doing Business reports, Jamaica had scored quite low on ease of paying taxes. However, this has been an area targeted by recent government policy. If taxes can be made easier for new firms, entrepreneurs will have better opportunities to expand under this more predictable and simple tax regime. Jamaica’s educational related conditions were also scored quite high, with 3.6 for Entrepreneurial Education at School, second among GEM Level C economies, and 4.6 for Entrepreneurial Education Post-School, fourth among GEM Level C economies. It will take some time for these students to advance into entrepreneurship, but it bodes well for future development. 

Jamaica’s scores on market entry conditions were contradictory. On Ease of Entry: Market Dynamics, a score of 4.1 placed it 10th among GEM Level C economies, while Ease of Entry: Burdens and Regulation was ranked third with a score of 4.2. This suggests that there are regulatory burdens that may prevent entrepreneurs from offering their goods and services to the domestic market, but that there appears to be a strong market to welcome these new products if entrepreneurs had better access. Reducing regulation on market entry will therefore be an easy means for Jamaican entrepreneurs to boost growth and opportunities, creating paths for specialization in response to market demands as well.

Much like the strong entrepreneurial educational performance by Jamaica noted above, a score of 5.8 on Social and Cultural Norms also demonstrates a strong future for entrepreneurship. The strong entrepreneurial culture means that future generations will see it as a viable and respectable option to pursue. It also means that Jamaicans will be more receptive to entrepreneurial ventures. Therefore, if conditions related to financing and regulation can improve, Jamaica should have an improving entrepreneurial future.