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Transcript of Enabling Entreprise
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ENABLING
ENTERPRISE
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1. INTRODUCTION
The vision for Enterprise
1.1 The ‘Te Kaveinga Nui’ (the long-term visionary framework of the Cook Islands)
foresees that by the year 2020, the Cook Islands will have achieved (Strategic Outcome
3), “Sustainable economic growth in harmony with our social values, culture and
environment”. Furthermore, the Cook Islands National Sustainable Development Plan2007-2010 (Strategic Goal 3) aims for an “Innovative and well-managed private sector
led economy”. The challenge for the Cook Islands is therefore to mobilize resourcestowards the achievement of the above goal and outcome.
1.2 In today’s modern global economy, the Cook Islands are disadvantaged becauseof its their size, fragile environments and distance from markets. However, if we are to
survive in the modern global economy, we must change our mindset and view our
disadvantages as factors that challenge us to be much more innovative in everything thatwe do.
1.3 Since the Economic Reform Program of 1996, our economy has become one that
is private sector-ledhas become more and more pivate sector-led. Small and MediumEnterprises (SMEs) account for much of the enterprises activitye in the Cook Islands, and
they have formed the base for our private sector-led economy by creating incomes,
employment and growth.
1.4 The Cook Islands have enjoyed solid rates of growth during the period 2000 –
2007 driven primarily by tourism. However, it is inevitable that the current globali i ill h i ifi i li i i i d d
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Enterprise enablers
Culture: Develop a culture where talent can be unlocked and flourish, reducing the
fear of failure that prevents start-ups and giving Cook Islanders the opportunity to beentrepreneurial.
Knowledge and Skills: Ensure that individuals and business have access to and are able to develop the best possible knowledge and skills to support their business.
Access to Finance: Enable new and growing businesses and those people seeking toexploit their ideas have access to appropriate levels of finance and advice.
Regulatory Framework : Renew our focus to ensure that the regulatory environment
does not stifle or disadvantage small and medium business.
Business Innovation: Reinforce innovation’s role as a driver of enterprise itself
and at the root of all entrepreneurial activity, to complement the National Economic Development Strategy.
Ambition of the SME Strategy
1.7 This sStrategy document presents important policy priorities relating to these
inter-related enterprise enablers, which will have a materially positive impact on business
in the Cook Islands. The enablers will shape the future priorities of the Business Tradeand Investment Board (BTIB) and other Government agencies that foster economic
development. In future years, the successful delivery of this strategy will see:
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• The need for equity finance
• A small and fragmented market
The Business Trade and Investment Board (BTIB) (a merger between the Development
Investment Board and Small Business Enterprise Centre) was established to provide
support to address these constraints. The BTIB is mandated to promote, encourage andsupport Cook Islanders in trade, investment and business. An Outer Island Development
Grant Fund (OIDGF) co-funded by the Government and NZAID is one of the SME tools
being used to assist Outer Islands enterprise development.
Promoting enterprise - a framework for Government
1.9 Government recognises that economic growth is created generated by the actions
of businesses. While it is not the role of government to duplicate or substitute for private
sector activity, there is an important role for targeted interventions to overcome marketimperfections to ensure that the market can deliver the best best social outcomes.
1.10 A country’s enterprise performance depends on a multitude of underlying factors.This framework brings these factors together and groups them within five separate, but
closely inter-related themes or ‘enablers’; Culture, Knowledge and Skills, Access to
Finance, Business Innovation and Regulatory Framework. It draws on many importantcontributions to academic literature on entrepreneurship, and the experience of many
other countries both regionally and internationally. Links between the enablers of
enterprise and the drivers of productivity are shown in Figure 1.1.
Figure 1.1
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stakeholders that a simple more coherent strategic framework is required – one that is
meaningful to businesses and also to the relevant agencies responsible to delivering
enterprise policy objectives.
1.12 The enablers and enterprise are driven by market demand. Market research,
information, access, promotions, opportunities and skills are critical to the SMEdevelopment cycle.
1.13 The enablers will provide a new focus for how we think about the development of enterprise policies as well as informing our priorities in the same way that the five drivers
of productivity will continue to inform our broader productivity policies. We believe thefollowing enablers are key to delivering our enterprise vision.
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2. A
CULTURE OF ENTERPRISE
Vision“A lot of our people are akama [embarrassed] or they think that they can’t go into
business even though they may have talent or good ideas. They think people will aviri
[mock] them and that’s just the way we are…. We have to change the way we think and
get rid of the akama and the aviri.” (46 year old female, Rarotonga)
The Government’s vision is for many more people in the Cook Islands to have the
opportunity, aspiration and motivation to use their talent and initiative to be
enterprising and have an increased proportion of people starting business.
The Government will work to develop an environment in the Cook Islands where
attitudes to and aspirations about enterprise, are based on accurate information and
relevant role models and not on myths that lead to misplaced risk aversion.
Progress to Date
There has been very little work done in the Cook Islands on targeting ‘a culture of
enterprise’.
Very little formal data is collected and analysed on entrepreneurship and aspirations
to entrepreneurship.
Likewise very little formal data is available on aspiration for business growth.
Next Challenges Very recent surveys indicate that while many people aspire to start business few of
them feel confident enough to turn these aspirations into reality.
The concept of ‘a culture of enterprise’ is a new one for the Cook Islands.
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THE GOVERNMENT’S VISION
2.1 The gGovernment’s vision is for many more people in the Cook Islands to havethe aspiration, opportunity and motivation to use their its talent and initiative to be
enterprisingentrepreneurial, whether expressed through starting or growing a business.
2.2 Our young people are our future and Government efforts to put in place activities
around enterprise aspiration and motivation to encourage many more young people to
start business is needed.
2.3 The Cook Islands must have a great environment in which to start and grow a
business. Currently, as of 25 November 2008, there have been 72 new businesses
registered for value added tax (VAT). This has declined over the past three years, whenin 2005, total new business registrations for VAT were 123.
2.4 The GovernmenGovernmentt will work to develop an environment in the Cook Islands where attitudes and aspirations around enterprise are based on accurate
information and relevant role models and not on myths that lead to misplaced risk aversion. Success will be measured through a greater proportion of people with theambition to start and grow a business. This is measured through early stage enterprise
activity (the number of businesses less than three and half years old is a good proxy for
wider enterprise culture) and aspirations captured by new business surveys.
2.5 Other chapters will set the importance of equipping individuals with the capability
and skills and other resources to undertake enterprising activities. They will explain the
policy stance that Government wishes to undertake to encourage a supportiveenvironment for enterprise, to promote innovation as a core enabler of enterprise, to
enhance access to finance for entrepreneurs and to develop a supportive regulatory and
legal framework.
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businesses and encouraging the flow of new ideas, innovation and competitive challenge.
Building positive aspirations for enterprise remains a challenge.
2.9 There are two aspects to this:
• individuals in the Cook Islands do not appreciate the returns or opportunities from
enterprise and overstate the likelihood and consequences of failure; and
• Society does not fully value entrepreneurial success and tends to over stigmatise
failure.
The fear of failure
2.10 Fear of failure is clearly linked to the extent to which people are risk adverse. Insurveys and consultations conducted many believe that a new business should not be
created if there is a risk that it might fail.
2.11 There is clear evidence that risk aversion is based on misconceptions about the
risk inherent in starting a business. Surveys conducted suggest there is a perception thatthe majority of businesses fail in the first year.
2.12 Role models can shape what people understand in terms of the opportunities andrisks in enterprise. They are key in influencing whether someone capable of starting an
enterprise actually does. This is especially so for young people and those in communities
where enterprise is not the norm. Research elsewhere has demonstrated that young people with parents involved in running a business are twice as likely as the average for
young people to start a business. Personally knowing an entrepreneur increases the
likelihood of having a suitable role model.
2.13 The literature on fear of failure or risk aversion often relates to starting a business
but the challenge is much wider than this. It impacts on the growth performance of
businesses.
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• Inspiring young people
• Reaching those with low aspirations and unlocking their talent
• Addressing the environment that shapes fear of failure
Inspiring young people
2.16 The Government’s objective is to develop an environment where our people can
better understand the risks and rewards of enterprise based on accurate information and
not on unfounded myths. This can be pursued in many ways, but key to the Cook Islandssuccess is to develop a broader outlook and more positive aspirations at an early age.
2.17 The reality for the future generation of entrepreneurs is that in a global economyopportunities are increasingly less constrained by country national boundariesborders.
Government therefore will explore and promote the avenues by which young people can
connect with activities around the world to encourage them to see enterprise opportunitiesat an early stage in their lives.
2.18 Building on the success of Careers Week that has been run annually, where
students are exposed to various career choices, the gGovernment proposesEntrepreneurship Week in which it is hoped that young peoples’ entrepreneurial talent
and ideas will be celebrated.
2.19 Government will also support the establishment of a pilot programme to offer mentoring and work placements in SMEs. This is being developed in direct response to
suggestions from the community that it would benefit entrepreneurs who are targeting
new markets for business.
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aspirations have become entrenched. Promotion of assistance available will be a priority
for Government.
Addressing the environment that shapes fear of failure
2.23 The institutional framework of government may seem a world away fromenterprise aspirations, but people pick up signals from its operation that shape their
perceptions around risk and failure. It is within government’s control to influence this.
2.24 It is generally accepted that the environment for business development must be a
‘level playing field’. The concept of ‘level playing field’ is about fairness, not that each player has an equal chance to succeed, but that they play by the same set of rules. In the
Cook Islands, we have unique characteristics that challenge the concept of ‘level playingfield’ and require that government interference is required to bring about fairness. This is
particularly true in the case of outer islands. Government will consider ways that will
encourage the development of enterprise in the outer islands, whether this is by means of reviewing Government employment policies and taxation policy to create a more
conducive environment for enterprise.
FUTURE ISSUES
2.25 In the longer term, the Governmengovernmentt will make sure that progress we
make with young people, especially girls and women feeds through to other sections of society, particularly those in the Oouter Iisland s and girls and women. So that people
have an understanding of the different approaches to business. This will ensure that they
seize opportunities, commercialise bring ideas and innovation to fruition, and build productive business relationships. The gGovernment will work with a range of partners
to foster an enterprising spirit in everyone.
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Culture: Key initiatives proposed
The initiatives proposed to tackle the remaining challenges and embed culture more
widely are:
Explore and promote avenues for young people to connect with enterprise activities
around the world.
Establish an Entrepreneurship Week.
Establish pilot mentoring and work placement in SME programmes.
Work with other key stakeholders to build on enterprise promotion.
Develop strategies for encouraging participation in enterprise.
Consider ways to create a more conducive environment for enterprise with
particular attention to the outer islands.
Strengthen the capacity of BTIB to facilitate, coordinate and support the SME
development.
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3. K NOWLEDGE AND SKILLS
3. K NOWLEDGE AND SKILLSVision
• The gGovernment’s vision is for many more people in the Cook Islands to have
the enterprise skills to successfully start and grow a business and for businesses
to be able to access the skilled workforce they require to grow.
•
Success will be understood through surveys conducted by BTIB of peoplebelieving that they have the skills to start a business and the delivery of
training programs.
Progress to date
• Over the past few years, the Ministry of Education, has implemented programmes
focused on enterprise education namely, the Life-skills projects in the Outer Islands,
Transition Programme in Rarotonga and Community Education in the Northern Cook
Islands.
• Department of National Human Resource Development is implementing NCEA
accredited programmes targeting the improvement of skills and training in hospitality
and trades.
• Business Trade and Investment Board have over the past years conducted a number of
training programs targeting business development and management.
Next Challenges
•
Providing adequate business support• Providing enterprise education for young people
Strategy
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Access to support that is relevant and appropriate to the needs of business must also be
provided. Government will gauge success across a range of programmes through a broad
range of measures that monitor performance.
PROGRESS SO FAR AND FURTHER CHALLENGES
3.3 Government recognises the importance of enterprise knowledge and skills. It has
in place programs in a number of key areas:
• Enterprise education in schools and colleges;
• Business support, advice and mentoring;
• Improving education and skills in the workforce.
However, it is acknowledged that more action is required in these areas.
Enterprise education in schools and colleges
3.4 The earlier that children are introduced to enterprise, even in the most general
sense, the more receptive they are. Government is committed to improving the level of enterprise education, particularly at secondary level and will develop the EnterpriseEducation Framework and create robust programs that will teach our children
entrepreneurial skills.
Business support advice and mentoring
3.5 Whilst there is business advice and skills training available, the provision of these
services has been rather sporadic due to both human and financial capacity issues. BTIB
is the gGovernment’s primary access channel for business support. Yet due to capacityconstraints it has not maximized its performance in the delivery of business support
advice and mentoring services. It has been difficult for businesses to assess the benefits
of well-tailored advice and support This has implications on the business or
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GOING FORWARD: PROMOTING ENTERPRISE SKILLS AND KNOWLEDGE
3.8 Government’s challenge over the next ten years is to build on investment that has
begun and further foster and support the development of enterprise skills and knowledgein the wider education system. Alongside thisIn addition, the gGovernment is committed
to strengthening the ability of businesses to access the support and skills development
they needrequired. Mentoring will play an enhanced role.
Enterprise education in schools and colleges3.9 Building a successful enterprise economy starts with children in schoolsthe youth.
Government will be working towards making young people more aware of theopportunities that exist and more motivated to engage in enterprise.
3.10 The gGovernment is committed on the development of programs that will embedenterprise education into the mainstream by:
• Extending enterprise education across the whole school system and embedding it in thecurriculum;
• Promoting self-employment as a career option.
Business support, advice and mentoring
3.11 Improving enterprise education in our schools and the entire education system
will provide the platform for the future success of our businesses. But Nevertheless, thisneeds to be complemented with measures targeted at businesses, a focus on mentoring
and access to wider business support.
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Improving education and skills in the workforce
3.15 The Cook Islands currently lacks a systematic approach to the human resources
development. Government will be actively working towards a systematic approach toidentifying employment and skills needs and the qualifications required to meet these
needs. A key element in accomplishing this will be to embed enterprise in the National
Human Resource Development Strategy and provide skills and training programmes thatmeet the needs of enterprise.
LOOKING AHEAD: THE CHANGING LANDSCAPE OF BUSINESS SUPPORT
3.16 Improving enterprise knowledge and skills development provision will ensure thatkey building blocks of a successful economy are put in place and the measures outlined
in this chapter will contribute to the delivery of this. However, there remains challenges.Going forward we will need to respond to changing needs, engagement and learning
preferences of our business community. Government will also embrace new media and
technologies to better address the needs of businesses.
Knowledge and skills: Key strategies
• Extending enterprise education across the whole school system and embedding it
into the curriculum.
• Promoting self-employment as a career option.
• Develop a robust mentoring program.
• Offer accredited skills and training programmes that meet the needs of enterprise.
P i h d l f i kill d k l d f l i h
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Islands, barriers to accessing finance persist. Over the past years, Government has taken
steps to help businesses get better access to finance through a range of services such as
financing advice, preparation of business plans, etc and so forth. Government realizesthat it in addition to providing these services, businesses must also make themselves more
‘investment ready’ for potential investors.
PROGRESS MADE SO FAR
4.2 Whilst local banks have generally been supportive of business there remain
barriers for some small viable businesses that require finance to start and grow. The fact
that some businesses do not obtain finance is not in itself an indication of failures in thefinancial markets but rather banks acting rationally in not providing finance to some
business proposals. This means that some good business proposals find it difficult toaccess finance because of bank’s use of collateral, financial track record and cost of due
diligence to access risk for small businesses.
4.3 In the case of the outer islands, there is a general reluctance to support business
start-up. The OIDGF provides an avenue for business to start up in the Oouter Iislands.
BRIDGING THE FINANCE GAP
4.4 Consultations with the public have indicated that targeted interventions should not
be limited to the Oouter Iislands only, but also include Rarotonga. Research has shownthat publicly backed equity funds have become an extremely important source of capital
for SMEs. These funds provide a complimentary role to the private sector in the
provision of equity finance.
4.5 Examples from abroad also show that the gGovernment can also use the tax
system to provide an additional incentive for investment in early stage and growth of
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4.8 Some smaller businesses do not know how to turn their business proposals into
attractive investment opportunities. Furthermore, there is also a reluctance of ceding
ownership to second parties.
4.9 The Government wants to ensure that all businesses understand the full range of
ways in which finance and investment can be sought and raised. It also wants businessesto be better able to engage a range of finance providers to successfully fund their business
development; in other words to be ‘investment ready’.
Ensuring business support is tailored to the needs of business
4.10 Future government interventions need to respond to the need of businesses. Akey challenge for the gGovernment is to respond to the different requirements of:
• Businesses that are high growth
• Businesses that more modest in their growth ambitions
• Business in the outer islands, which require a different set of supporting
measures.
4.11 This requires a holistic view of how various publicly funded measures can interactwith private sector provision across the supply of finance, advice and other resources for
business.
GOING FORWARD
4.12 Over the next ten years, the gGovernment will focus on ensuring thatentrepreneurs and businesses continue to have access to the finance and investment they
need and have the necessary skills and confidence to make their businesses investment
ready
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Access to Finance: Key initiatives
• Strengthen and tailor OIDGF to better meet the needs of entrepreneurs in the outer islands.
• Explore the development of other funding mechanisms for entrepreneurs that
experience difficulties in accessing finances for business start-up.
• In collaboration with banks, provide free, confidential and independent advice to small
business with cash flow or debt problems.
• Develop a strong framework for delivering finance and investment readiness advice and
support.
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5. R EGULATORY FRAMEWORK
“…Private Sector development is the responsibility for all of Government…
entrepreneurship comes with the right environment….” (Steve Anderson, President, Cook
Islands Chamber of Commerce)
Vision
The gGovernment’s vision is for the Cook Islands regulatory environment to encourage
and enable enterprise activity, whether expressed thorough encouraging start-up or
growth, whilst continuing to protect consumers, employees’ rightss and the environment.
Progress to date
The Cook Islands enjoys the reputation of having an unrestrictive regulatory
environment.
Next Challenges
Recent developments in the Cook Islands have highlighted the need the need to put into
place a more robust regulatory framework that not only encourages enterprise, but alsoprotects consumers and employees.
Strategy
Government will identify, simplify or abolish unnecessary regulation.
Businesses will be able to place greater reliance on official guidance, particularly
around employment regulations.
Businesses will have much clearer information so that the anticipated benefits of
regulation are realized more effectively. Government agencies will constantly and moreeffectively examine whether small businesses can be exempted from new regulatory
requirements or be subject to a simplification of enforcement.
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5.3 As societies develop and become wealthier, the public tolerance of risk tends to
fall. Rising expectations of standards of goods and service means there is a growing
demand for regulation. Sometimes those calling for more regulation overlook the potentially negative effects on the economy, especially in terms of cumulative cost.
5.4 Alongside the benefits it brings, regulation imposes costs, particularly on business. These costs can be irritants for managers, owners and employees because of
the process required by regulation. In addition to the straightforward financial cost of
compliance can impact negatively on business, especially small businesses.
5.5 In addition to promoting market efficiency, and putting in place necessary protections for consumers and employees there are other circumstances where it is right
for Government to regulate – for example, to protect the environment. The challenge for Government is to strike the right balance. To help assess the advantages and
disadvantages of acting and to improve the quality of regulation, there is a need for a
robust impact assessment system. Impact Assessments will enable Government to ensuredecision making to be informed by an assessment of costs and benefits of acting.
PROGRESS TO DATE
5.6 The Cook Islands acknowledges the importance of the regulatory framework in
enabling enterprise, particularly in relation to the protection of the consumer andemployees.
5.7 The Development Investment Act 1995-96 promotes investment in the Cook Islands and regulates the direction and scope of foreign investment.
5.8 It is hoped that the Consumer Guarantee Bill and Fair Bill will be passed by
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also focus on make certain that any new regulation shall not add unreasonable burden to
business.
5.12 Businesses often find the details of regulation complex and difficult to
understand. Good guidance that leads to understanding and compliance to regulation is a
must. Surveys indicate that provision of guidance, setting out in clear and simplelanguage what their business has to do to comply with a given regulation is very
important.
GOING FORWARD
5.13 Tackling outdated, redundant regulation is an important part of building anenabling regulatory framework. Businesses should see the real change in how regulation
applies to them.
5.14 Government has already begun steps to putting into place a more robust
legislative and regulatory framework. It is anticipated that by the end of 2009, the
Consumer Guarantee Act; Fair Trading Act, Employment Relations Act will be passed byParliament.
5.15 Government is also examining how best to approach the issues of encouraging
competition and minimizing monopolistic situations, bankruptcy and, price control.and so forth.
5.16 Most regulation is designed to change behaviour and can only be successful if those affected understand what is required, and whywhat of them is required. If business
is not given clear guidance, then compliance is likely to be low. Government will
improve guidance and also channels of guidance more consistent and streamlined, and
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5.19 The gGovernment will need to continuously monitor not only the regulatory
compliance but also the impact on businesses in light of changing global economic
environment.
Regulatory Framework: Key proposals
• The Government will ensure that the Cook Islands business regulatory framework
promotes competition, innovation, investment; and protects consumers and
employees; through the passing of appropriate legislations and regulations.
• Before passing legislations and regulations relating to enterprise, the gGovernment
will conduct and impact assessment of the cost and benefits of action. Government
will put into place a robust impact assessment system.
• Outdated and redundant legislation and regulations will be reviewed such as thePrice Control Act.
• Together with the Law Commission Government will examine issues of monopoly,
mergers, bankruptcy with the view of putting in place mechanisms that bestaddresses these situations.
• Improve guidance and awareness requirements and effects of compliance tolegislation and regulation.
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6. BUSINESS INNOVATION
Vision
• The gGovernment’s vision is to create an environment in the Cook Islands in which
innovation can flourish and where businesses identify and capture the benefits of their
innovation.
Progress to date
• Government policies have focused enough on innovation as a key enabler of enterprise.
To promote innovation vigorously is a new dimension in the gGovernment’s approach tobusiness development.
• Businesses that survive in the Cook Islands do so because they are innovative in the way
that they operate and the products they offer.
Next Challenges
• The focus on innovation as an enabler of enterprise has not been fully harnessed in the
Cook Islands. Yet it is key to diversifying the economy and for business survival in such
a small economy. The challenge is how to embed innovation into our business culture.
StrategyThe gGovernment’s approach for business innovation will target:
• An increase in the proportion of SME turnover due to new or significantly improved
products.
• Businesses increasingly looking externally to find ideas at each stage of development.
• Innovative firms – and increasingly service-based businesses – playing a greater role in
international markets.
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KEY CHALLENGES AND OPPORTUNITIES
6.4 The tourism sector remains at the heart of our economy. A thriving tourismsector is essential for employment and for the economy. But as with other sectors,
tourism operators need to improve their competitiveness in order to succeed in the
tourism marketplace. Success depends not on only cutting costs, but on continuallycreating goods and services that people want to buy, using innovation, investment and
good business practice.
6.5 We have entered a period of fundamental change in our economic environment –
the impact of global issues has facilitated the need to be more innovative. For the Cook Islands, climate change and the need to ensure sustainable development have also
become significant drivers of business innovation.
6.6 Innovation is becoming an increasingly global process. The Cook Islands must
start taking innovation seriously if it is to survive in the global market place.Undoubtedly, our size, isolation, small population presents us with seemingly
insurmountable challenges particularly when taking into account the challenges of global
competition.
6.7 However, if the gGovernment can ensure macroeconomic stability; an open and
competitive market; invest in people and knowledge; ensure that the infrastructure to
support development; we have the potential to unlock our people’s talents and beinnovative.
6.8 New technologies are providing huge opportunities to support innovation. Thegrowth of broadband and the convergence of communication technologies and new
information technologies are transforming the way products and services are developed
and marketed all over the world. They are also enabling the development of completely
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6.12 Government will put together a cCommittee that will have a key role in
supporting innovation in the Cook Islands. This committee will bring together key
players and partners ( public and privateGovernment and Business) to look at major societal challenges and market opportunities with a view of increasing business
investment and innovation.
6.13 Business needs innovative people with skills and entrepreneurial drive. The
gGovernment has a unique and essential role in supporting business innovation by
ensuring that there will be a stock of science, technology, engineering and mathematicsgraduates and a flexible labour market for them to enter.
6.14 It is vital that our communications infrastructure meets not only today’s demands,
but also provides the platform for creativity and innovation to support our futureeconomic growth. Government will explore the best way forward in ensuring that our
communications infrastructure matches our aspirations in business innovation.
Business innovation: key initiatives
• Government will work towards better understanding barriers to innovation and
how innovation can be stimulated and supported.
• Foster connections between research, product design and service.
• Establish a committee on innovation Innovation Committee.
• Ensure science, technology, engineering, mathematics tertiary education
scholarships are offered to our young people
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7. THE WIDER BENEFITS OF ENTERPRISE
Vision
The Government’s aim is through enterprise (measured by self-employment rate), to
bring significant social and economic benefits to Cook Islands, and in particular to the
Outer Islands.
Progress
In 2003, there was a total of 134 new business registered for VAT; in 2008 (as of
November 25th), there are 72 new business registrations. This demonstrates a decline in
businesses registered for VAT.
Next Challenges
To increase businesses registered for VAT.Communities in the outer islands have most to gain from the wider benefits of
enterprise, yet they are most lacking in skills, culture and the resources needed to enable
enterprise.
A key challenge for many is accessing finance to support enterprise activity.
A further challenge is embedding social enterprise as an accepted form of enterprise.
Strategy
Government is wants to re-focus its role in delivering economic development, includingsupport for enterprise. In the coming years, Government’s strategy is for:
More businesses and individuals in communities that are underserved by traditional
finance sources can access the finance they need.
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2008 is up to November 25, 2008). This indicates that Government must work hard to
foster and support business development.
Chart 7.1
New business registered for VAT
0
20
40
60
80
100
120
140
160
2000 2001 2002 2003 2004 2005 2006 2007 200
Years
N o
o f b u s i n e s s
LOOKING AHEAD
7.3 Most of the reasons for lack of enterprise in any community are common acrossthe whole country. However, local differences in economic historic, geography,
demographic mix, give rise to a variety of issues and therefore call for an appropriatevariety of policy responses. In the coming years, the gGovernment will pursue a range of policies aimed at empowering local communities to boost economic development in their
areas and tailored measures to improve access to finance for those who find it difficult to
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Wider Benefits of enterprise: Key considerations
Government to put into place funding mechanisms for those who cannot secure
funding through commercial banks for business start-up and expansion.
Government will operate and manage a separate funding mechanism targeting the
outer islands.
The gGovernment through BTIB will target and provide more intensive supportto those currently under-represented in enterprise.
Government will develop mechanisms to help young people realize their talentsand potential through raising awareness of enterprise and the role it can play in
their lives and in building communities.
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DELIVERING THE STRATEGY
A CULTURE OF ENTERPRISEOUR GOALS OUR STRATEGIES OUR TARGETS OUR DRIVERS
To inspire our young people to be
entrepreneurial• Enterprise education in our schools
• Increase enterprise programmes in
our schools
• Improve pass rate in enterprise
programmes in our schools
• Ministry of Education
•Establish a pilot programme to offer
mentoring and work placement in
SMEs.
•Increase participation in pilot
programme
•Business Trade and Investment
Board
• Explore and promote avenues for
young people to connect withenterprise activities around the
world
•Increase number of young people
connected with enterprise activitiesaround the world
•Business Trade and Investment
Board•Ministry of Internal Affairs (Youth
Division)
•Establish a Entrepreneurship Week • Number of young people
participating in Entrepreneurship
Week
•Business Trade and Investment
Board
•Ministry of Education
•Ministry of Internal Affairs (Youth
Division)
To reach those with low aspirations • Develop strategies to encourage
outer islands participation in
enterprise
•Increase number of enterprise in the
outer islands
•Business Trade and Investment
Board
•Ministry of Marine Resources
•Ministry of Agriculture
•Cook Islands Tourism
•Department of National Human
Resource Development
To promote enterprise amongst
women• Develop enterprise assistance
targeting women
•Increase number of women in
business
•Ministry of Internal Affairs
•Business Trade and Investment
Board
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To address the environment that
shapes fear of failure•Review policies to create a more
conducive environment for
enterprise (regulatory, infrastructure,
finance, marketing)
• To develop systems to disseminateinformation effectively and
efficiently
•Policies for conducive environment
in place and increase in enterprise
•Business Trade and Investment
Board
•Ministry of Finance and Economic
Management
•Ministry of Internal Affairs•Office of the Prime Minister
•Ministry of Infrastructure and
Planning
•Ministry of Marine Resources
•Ministry of Agriculture
•Cook Islands Tourism Authority
To strengthen capacity to support
SME•Strengthen Business Trade and
Investment Board capacity to
facilitate, coordinate and support
SME development
•
To develop tools and systems toinform customers
•A fully capacitated Business Trade
and Investment Board
•Business Trade and Investment
Board
To build effective partnerships to
promote SME support•Work in partnership with Private
Sector, NGOs and the community to
promote enterprise
•To establish a mentoring and
empowering programme with
partners to promote and support
enterprise.
•Effective partnerships to promote • Business Trade and Investment
Board
•Private Sector
• NGOs
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KNOWLEDGE AND SKILLS
OUR GOALS OUR STRATEGIES OUR TARGETS OUR DRIVERS
To ensure that many more people in
the Cook Islands have the enterprise
skills to start and grow business and
for businesses to have access to a
skilled workforce
• Develop the Enterprise Education
Framework
•Extend enterprise education across
the whole school system
• Quality enterprise education
programmes in our education
curriculum
• Ministry of Education
•Promote self-employment as a
career option
•Increase number of self-employed
people
•Business Trade and Investment
Board
• Ministry of Education
• Department of National Human
Resource Development
To have a high level of skills and
training in the workforce•Embed enterprise in the National
Resources Development Strategy
•Embed enterprise in National
Resources Development Strategy
• Department of National Human
Resource Development
• Business Trade and Investment
Board
•Offer accredited skills and training
programmes that meet the needs of
enterprise
•Increase number of people
undertaking and successfully
completing skills and training
programmes
• Department of National Human
Resources Development
• Business Trade and Investment
Board
To provide in an effective and
efficient manner business support,
advice and mentoring
• Build the capacity of BTIB to be
able to effectively and efficiently
provide business support and advice
• To provide business support on line
•Increase number of people utilizing
the services provided by BTIB
• Increase number of people utilizing
BTIB business support on line
•Business Trade and Investment
Board
•Office of the Prime Minister (ICT
Division)
•Develop a robust mentoring
programme in partnership with
private sector and NGOs
• Number of people taking part in
mentoring programme
•Business Trade and Investment
Board
•Private Sector
• NGOs
•Embrace new media and • Increase media and technological • Business and Trade and Investment
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technologies to better address the
needs of business
avenues to assist and support
business
• Increase number of people utilizing
media and technological avenues to
address business needs
Board
To drive the development of
enterprise skills and knowledge of
people in the outer islands
• Promote the development of
enterprise skills and knowledge of
people in the Oouter Iislands
• Increase number of people from the
outer islands undertaking and
successfully completing skills and
training programmes
•Increase number of enterprise in the
Oouter Iislands
•Business Trade and Investment
Board
•Department of National Human
Resource Development
ACCESS TO FINANCE
OUR GOALS OUR STRATEGIES OUR TARGETS OUR DRIVERS
To ensure that there are alternative
financing mechanisms to supportthose who cannot access finance from
regular financing sources
• Provide alternative financing
mechanisms to support enterprise
•Increase number of people in
enterprise utilizing alternativefinancing mechanisms
•Business Trade and Investment
Board• Ministry of Finance and Economic
Management
• Bank of the Cook Islands
•Provide access to finance for outer
islands entrepreneurs through
financing mechanisms targeting
outer islands
• Work with NZAID to strengthen
and tailor Outer Islands
Development Grant Fund to better
meet the need of enterprise in theouter islands such
•Increase number of enterprise in
outer islands
•Business Trade and Investment
Board
• Ministry of Finance and Economic
Management
• NZAID
To ensure that all businesses and
entrepreneurs are more ‘investment
ready’ and are better able to secure
appropriate sources of investment and
finance
• In collaboration with banks, provide
free, confidential and independent
advice to small businesses
• Develop a strong framework for
delivering finance and investment
•Increase in enterprise activities • Business Trade and Investment
Board
• Banks
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readiness advice and support
REGULATORY FRAMEWORK
OUR GOALS OUR STRATEGIES OUR TARGETS OUR DRIVERS
To ensure that our regulatory
environment encourages and enablesenterprise activity
• Promote competition, innovation,
investment; and protect consumersand employees thorough the passing
of appropriate legislations and
regulations
• Review and outdated and redundant
legislation and regulations related to
enterprise activity
•Increase enterprise activity •Business Trade and Investment
Board• Ministry of Finance and Economic
Management
•Ministry of Internal Affairs
•Crown Law Office
•Consider the costs and benefits of
passing legislation and regulation
relating to enterprise
•Increase enterprise activity •Business Trade and Investment
Board
• Ministry of Finance and Economic
Management
•Ministry of Internal Affairs
• Crown Law
• Private Sector
•Examine the issues of monopoly,
mergers, bankruptcy with the view
of implementing mechanisms that
best address these situations
•Increase competition
• Decrease in business bankruptcy
• Business Trade and Investment
Board
• Cook Islands Law Commission
• Ministry of Internal Affairs
• Ministry of Justice
• Crown Law Office
• Ministry of Finance and EconomicManagement
• Provide information and guidance
effectively and efficiently to
businesses on compliance with
legislation and regulation
• Strengthen monitoring and
compliance systems
• Increase utilization of official
channels for information and
guidance on compliance with
legislation and regulation regarding
business activities
• Decrease in non-compliance
•Business Trade and Investment
Board
• Cook Islands Law Commission
• Ministry of Internal Affairs
• Ministry of Justice
• Crown Law Office
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incidences • Ministry of Finance and Economic
Management
BUSINESS INNOVATION
OUR GOALS OUR STRATEGIES OUR TARGETS OUR DRIVERS
To better understand how innovationcan be stimulated and supported to
drive our enterprise activity
•Foster connections betweenresearch, product design, marketing
and service
•Increase enterprise turn over duenew or improved products
•Business Trade and InvestmentBoard
•Establish Innovation Committee •Increase enterprise turn over due
new or improved products
•Business Trade and Investment
Board
• Ensure that science, technology,
engineering, mathematics tertiary
education scholarships are offered to
our young people
•Increase in number of scholarships
in these areas and success of those
undertaking scholarships
• Department of National Human
Resources Development
• Ministry of Education
To improve our infrastructure to
support enterprise innovation and
development
• Explore the best means of
improving infrastructure –
communications, transportation,
public utilities, ports, etc to support
enterprise
• Have in place the necessary
infrastructure to support enterprise
innovation and development
•Business Trade and Investment
Board
•Ministry of Infrastructure
•Ministry of Transport
•Island Administrations
•Minister of Telecommunications
This Strategy will only succeed through the collaborative efforts of many government agencies and the different sectors of thecommunity.
Government agencies identified are expected to mainstream the strategies contained in this ‘10 year Strategy for SME Development’
into their various strategic and annual business plans. The overall agency responsible for ensuring the delivery of the strategy will bethe Business Trade and Investment Board. The targets identified will be monitored by the various agencies and will be evaluated by
the Central Policy and Planning Office of the Office of the Prime Minister.
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