HAITI: TOWARD AN ENTREPRENEURIAL STATE

Entrepreneurship is critical to economic growth, innovation, and poverty reduction in emerging nations (Landes, 1998). Haiti, a small Caribbean Island, is no exception to this tendency. According to studies, entrepreneurial enterprises in Haiti have stayed relatively small within their organizational structures due to various internal and external constraints, limiting economic development. As a result, they have yet to take off (for example, strategic imports, hotels, telecommunications, and banking have been accused of impeding the country’s progress on several occasions. Presumably, the traditional function of the elite is to invest in the country to generate economic activity, riches, and employment, as well as to influence the government to enhance trade, promote productivity, assure stability, and safeguard investments. In Haiti, however, the elite does not play this role (Roc, 2008).

See also Séraphin and Butler (2013), Séraphin et al. (2014), and Gowreesunkar et al. (2015). Haitian aristocracy dominates commerce, and the lack of government and accountability has encouraged the development of parallel economies and patronage practices (Moita & Gauthier, 2010). 

This issue is also made by Gowreesunkar et al. (2015) and Page (1999), who suggest that in postcolonial destinations such as Haiti, Jamaica, the Dominican Republic, and Mauritius, significant firms, particularly those controlled by whites, continue to dominate the economy. According to a 2016 UNICEF online poll, 77% of Haitians live in poverty and have poor literacy (61% – 64% for males and 57% for females). 

As a result, many Haitians are underemployed and earning pitiful pay (Lukhoba, 2013). As a result, survival, unproductive, and harmful types of business have emerged (Séraphin, Butler, and Gowreesunkar, 2015). 

For example, 47% of the labor force is employed in private informal firms, 39% in agriculture, 7.5% in formal private enterprises, 3% in public administration, 1.4% in state-owned enterprises, and 1.2% in NGOs (Financial Times, 2015, p. 5). Working in the informal sector appears to fit the profile of most prospective entrepreneurs because it does not require formal educational credentials as required in legal industries. Currently, six sectors contribute to Haiti’s economic growth: commerce, hotels and restaurants, construction, transportation, and communication, manufacturing non-retail services, and other retail services (Financial Times, 2015: 5). Haiti’s existence is, thus, to considerable part, dependent on the success of its entrepreneurship sector, a fact reflected in Szerb’s (2016) study: a nation’s economic progress is directly tied to the performance of its entrepreneurship sector.

The Haitian civilization appears to be anchored in traditional behaviors (see Pisani, 2015; Seraphin & Butler, 2013; Seraphin et al., 2014; Gowreesunkar et al., 2015; Gauthier & Moita, 2010; Roc, 2008). The notion of learned helplessness may assist in explaining reluctance to change in nations that have suffered abusive power relationships, continuing poverty, racism, violence, and natural disaster (Seligman & Maier, 1967). 

According to the authors, continuous experiences of poverty or powerlessness produce learned helplessness, which leads to a suspension of environmental inquiry or behavior modification (Mal, Jain & Yadav, 1990; Teodorescu & Erev, 2014). 

Learned helplessness is a mental condition in which people ascribe their circumstances to uncontrolled variables, such as an intrinsic lack of ability or to global issues that will never change, leaving them powerless to change their circumstances. Looking at Haiti now, we can see that things have changed over the years. Still, they have also stayed the same, such as the country’s weak government and a lack of chances for locals (Séraphin, 2013a, 2013b).

Our study issue is thus theoretically significant since it will uncover the elements creating learned helplessness in the Haitian entrepreneurial sector. Consequently, our method’s uniqueness consists of using the Blakeley Model to identify the “blind spots” in Haiti’s entrepreneurial sector. 

Blakeley (2007) defines blind spots as “a recurrent propensity to repress, distort, discard, or fail to notice information, opinions, or ideas in a particular area that results into learn, develop, or grow in response to changes in that area” (Blakeley, 2007: 6). This philosophy guides our research questions: What are the gaps in Haitian entrepreneurship? What steps may be taken to close these gaps?? The questions appear pertinent given the continuing discussion among Haitian intellectuals and academics specializing in this destination (Gauthier & Moita, 2010; Paul et al., 2010; Roc, 2008; Lauthier, 2004).

Using the Blakeley model will assist in identifying the underlying causes (that we cannot perceive) of why entrepreneurship in Haiti has stalled. 

The research is new in two ways: first, it employs a model that has never been applied to any entrepreneurial environment; second, it concludes the entrepreneurial sector in tiny island countries. Inductive and exploratory research methods apply ideas and concepts to a small island economy. As a result, the debate is mainly based on secondary data, including available case studies of Haitian entrepreneurs. For numerous reasons, Haiti was chosen as the research location: Our paper is divided into three sections: The research context will be presented in the first section. 

Following that, we will do a literature analysis on entrepreneurship and connect the findings to the Haitian environment. Finally, the Blakeley Model (2007) and findings from adaptations of this model to the Haitian setting will be presented.

An Overview of the Entrepreneurial State Concept

Innovation-led growth has the potential to square a circle that modern capitalism faces: how to achieve continuous and sustainable economic growth based on high-value, well- paying jobs. 

This is at the heart of entrepreneurial cultures, and it is a worthy goal. The issue is figuring out how to get there. Even though many countries have established the objective, only some have attained it.

This elusiveness stems from widespread misconceptions about how innovation-led development has historically been accomplished. Because of these misconceptions, false narratives have driven policymaking, with individual entrepreneurs and businesses as key players. If this story is not challenged, it will lead to unproductive policymaking and the distribution of growth incentives that do not represent the actual distribution of risks. An entrepreneurial society requires an entrepreneurial state that can develop animal spirits in private firms through creative and intelligent public investments scattered across the innovation chain. Entrepreneurs then perceive prospects for expansion, and company investment follows.

Breakthrough technologies, such as the internet and biotech, did not arise from governments concerned with “commercialization”; instead, they evolved due to spillovers from investments focused on long-term public goals. Missions of the past, such as sending a man to the moon, translated into a slew of homework issues that required many players to collaborate in dynamic partnerships, fostering creativity. From aging to climate change, today’s social concerns may give a comparable focus and driving drive. As profit- making opportunities emerge, they can promote innovation and provide direction for new private investment and entrepreneurial activity. Mission-oriented thinking is likewise used to formulate technological roadmaps for the 17 SDGs.

Crucially, this will need public leadership, challenging the dominant mentality that confines the role of public actors to merely de-risking or supporting the true heroes, the private sector wealth creators, such as risk-taking entrepreneurs, while waiting for the market to discover answers. Today, public actors have done more than merely allow the private sector in the few nations that have achieved innovation-led innovative development, such as the United States, Israel, Denmark, and China. They have deliberately accepted risks as a first-resort investor rather than a lender of last resort. The decentralized network of clever public organizations that permitted feedback loops throughout the innovation chain was crucial in Silicon Valley. This encompasses fundamental research, applied research, and patient and strategic long-term financing for businesses. It also covers policies that affect demand for new goods and services, both directly and indirectly.

Contrary to popular belief, public organizations such as DARPA and SBIR in the United States, Yozma in Israel, and Sitra and Tekes in Finland have actively influenced and created markets. These direct investments are more effective in generating additional private investment than indirect ones, such as tax credits.

This strategy entails purposefully tilting the playing field in a specific way rather than just leveling it. That does not imply putting all your eggs in one basket but instead backing a portfolio of different technologies (motivated by challenges to tackle) that are all part of a goal (the big problem). 

The common criticism that governments cannot choose winners misses the reality that the internet, like almost all of the technology in the iPhone, was chosen through such mission-oriented investments (including GPS, Siri, and touchscreen). Public financing boosted solar, nuclear, wind, and even shale gas in the energy industry. 

Solar City, Tesla, and Space X, Elon Musk’s three enterprises, have received almost $4.9 billion in public funding. These investments sometimes succeed (Tesla) and sometimes fail (Solyndra), but any venture capitalist will tell you that this is common. The goal is to get past these false narratives and stale ideological disputes over whether the state should take a stride forward or a step back. The essential dilemma is how to apply the lessons of effective mission-oriented policy in the past to today’s social concerns, both as a foundation for resolving these critical issues and as a stimulant for and a direction for inclusive, sustainable, innovation-led growth. This entails creating conceptual frameworks, analytical tools, and organizational capacities capable of justifying, evaluating, and nurturing this approach.

In a recent essay published in the journal Industry and Innovation, I presented these problems in terms of four questions:

  • First, let us talk about routes and directions. If “letting the market decide” is a vague and unproductive answer to the difficulties we confront, how can we create democratically sustainable means to select specific objectives and establish the paths and orientations for change?
  • Then there are organizations. How can we construct learning organizations in the public sector that can embrace risk, learn from failure, discover, explore, and know when to turn off the water? This entails viewing policy as a process in which learning from failure is tolerated and encouraged. Speaking about public organizations as mission-driven rather than just facilitators for others can also aid in recruiting the brilliant individuals that visionary public organizations require.
  • The third step is evaluation. The transformational impact of purposeful, market- creating public investments must be captured by something other than static cost- benefit analysis. New dynamic assessment mechanisms are required based on a much fuller knowledge of public value production.
  • Fourth, there are dangers and benefits. The false narrative about who the risk takers are has resulted in a reward distribution that does not represent the genuine distribution of risk. If taxpayers assume the most significant risks in the early phases of innovation, they should participate in the gains. The question is how best to accomplish this. There are numerous options, including agreements on profit

reinvestment (precisely the type of deal that led to the formation of Bell Labs); price caps on publicly funded products (e.g., drugs); retaining a golden share of intellectual property rights; retaining equity or royalties when feasible; and income-contingent loans. There is no single solution, but considering diverse approaches to share the benefits of innovation better is critical to a strategy that aims for intellectual and inclusive growth.

It is a well-known fact that the winners write history books. The victors of Silicon Valley, venture capitalists, and entrepreneurs created narratives that justified the benefits they received. Their stories, however, could be a better guide for policymaking elsewhere. That requires a look beneath, at the shoulders, they were standing on, and the development of symbiotic ecosystems between public and private actors that acknowledge wealth generation as a collaborative undertaking because an entrepreneurial society needs an entrepreneurial state first.

The Potential Benefits Of An Entrepreneurial State For Haiti 

According to Schumpeter (1934), entrepreneurship, and hence entrepreneurs, play a significant role in a country’s economic growth, whether it is industrialized or developing (Robson & Bennett, 2000). 

According to Schumpeter’s thesis, businesses must be creative by introducing new items or a new quality of a thing, introducing new methods of production, opening new markets, developing new sources of supply or raw materials, or manufacturing half-finished goods. Cantillon had a far more simplified understanding of the entrepreneur, considering anybody who acquired a thing at a special price, utilized that good to build a product, and then sold the product at a specific price to be an entrepreneur. Cantillon (1758) did, however, include the concepts of risk and market adaptability in his definition. 

In his definition of entrepreneurship, Knight emphasizes risk and uncertainty. Still, he also adds that being an entrepreneur implies being able to act in the face of unknown future occurrences (Knight, 1921). According to Drucker (1985), “risk” exists only for “entrepreneurs” who do not know what they are doing. In this vein, it is necessary to understand how entrepreneurs are socially rooted within the environment in which they operate (Granovetter, 1985). They behave by local values and available resources (Dodd & Anderson, 2007).

As a result, to comprehend entrepreneurial behavior, we must evaluate the significance of the local social context, as entrepreneurship is a socially rooted phenomenon. Thus, many elements have been discovered to provide a favorable environment for entrepreneurship at the macro-level, such as a liberal market structure and dynamics (Van Stel, Storey, & Thurik, 2007), easy access to financing (Welsh, Memili, Kaciak, Sadoon, 2014); a favorable government policy in terms of taxation, funding programs, and a reduction in bureaucratic procedures related to starting a business (Ahmad & Xavier, 2011); and political (Movahedi & Yaghoubi-Farani, 2012). Finally, internal conditions regarding experience, personal attributes, and ambitions round out elements that may or may not assist entrepreneurship (Krueger, 2007), with access to formal education and training being a critical component (Dabic et al., 2012).

Emerging-Market Entrepreneurship

Emerging markets are low-income but fast-growing countries that use economic liberalization as their principal development engine (Hoskinsson, Eden, Lau & Wright, 2000). These nations’ poor socioeconomic growth was frequently caused by political instability, a high number of conflicts in a short period, a lack of national identity among the population, economic crises, natural catastrophes, and disease outbreaks (Gould, 2011; Ritchie, Dorrell, Miller & Miller, 2004). Rising countries are mostly postcolonial, post-conflict, or post-disaster destinations (Bayeh, 2015; Séraphin, 2014; Gould, 2011). 

They are also divided into two groups: China, the former Soviet Union, developing Asia, Latin America, Africa, and the Middle East are all countries in transition economies (Hoskinsson, Eden, Lau & Wright, 2000). Regarding entrepreneurship, the fundamental concern for developing nations is their survival strategy (Mshenga & Owuor, 2010). According to Bessant and Tidd (2011), they (small and medium-sized firms) are inward-focused, too busy fighting fires and dealing with today’s issues to be concerned about looming storm clouds. The popularity of street food and street food sellers in countries such as Africa, Asia, and Latin America (Kowalczyk, 2014), which are also rising destinations (Hoskinson et al, 2000), the aforementioned contextual framework is entirely valid.

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