In many countries Agriculture, which was once a major contributor to Gross Domestic Product (GDP), is now decreasing in significance while the Services Sector is increasing. For example, according to World Bank figures, in 2019, 1.135 per cent of UK’s employment was in agriculture. In another report published by H. PLECHER in January 2020, it says in 2018 agriculture contributed 0.63 per cent to UK’s GDP, manufacturing industry 17.51 per cent and the services sector 71.04 per cent.
In 2019 agriculture’s share of St. Lucia’s GDP was 2.9 per cent while tourism’s share was 65 per cent (source: World Atlas- July 2019). According to the International Labour Organisation’s report of May 2018, the share of Antigua’s GDP accounted for by the following sectors were: Agriculture 2per cent, Industry 19 per cent, and services 79 per cent.
Main economic sectors (as a percentage of GDP) selected countries.
| Country | Services | Industry | Agriculture | Date | Source |
|---|---|---|---|---|---|
| Antigua | 79% | 19% | 2% | 2018 | ILO |
| Barbados | 88.7% | 9.8% | 1.5% | 2017 | CIA World Fact Book |
| UK | 71.04% | 17.51% | 0.63% | 2018 | Published by H.Plecher |
| St. Lucia | 75.18% | 9.97% | 2.01% | 2019 | Statista.com |
| France | 70.2% | 17.1% | 1.5% | 2019 | Import-Export Society |
| St. Vincent & Grenadines | 62.6% | 14.27& | 7.15% | 2019 | Statista.com |
| South Africa | 61.2% | 26% | 1.88% | 2020 | Statista.com |
| Ghana | 44.14% | 31.09% | 17.31% | 2020 | Statista.com |
GDP Growth (selected countries) 2019, Source: World Bank
| Country | Growth Rate |
|---|---|
| Antigua | 4.7% |
| Barbados | -0.1% |
| UK | 1.5% |
| France | 1.5% |
| St. Lucia | 1.7% |
| St. Vincent | 0.5% |
| Ghana | 6.5% |
| South Africa | 0.2% |
The narrative is clear (although for some countries more marked than others) that the Services Sector is now the foremost economic sector probably in all economies. Particularly in view of the likely longevity of the coronavirus health problem, including the possible rise of variants or other similar health crisis (some experts believe we are entering the era of the pandemic), whatever the significance of different economic sectors, when production/trade/commerce take place, new technology and associated skills are vitally important. It has been said that some foreign firms seeking to invest in the Caribbean in activities where new technologies are required often have to rely on importing such skills from overseas.
Improving Employment Rates
In seeking to improve the employment rate, including that of young people and raise productivity rates, new technology must play an important part. The deliberate and active involvement of young people in Tourism, FinTech, Business-to-Business (B2B) activities etc. is very important. By making good use of technology when operating in these sectors/industries, benefits may be maximised (in terms of skills development, investment, employment and business/economic competitiveness) even where there are substantial differences in the nature of the economies (of developed and developing economies). However, there needs to be systems which facilitate this development process. These systems include support mechanisms for enterprises and entrepreneurs.
It may be desirable that mechanisms are developed/sponsored by a combination of public sector(central/local governments), private sector and further/higher education institutions. Although not exclusively, it is suggested that important support activities/systems may be:
- Business Advice Programmes
- Apprenticeship Programmes
- Incubator Programmes.
BUSINESS ADVICE PROGRAMMES
Particularly in times of national/global economic/business crises when increasing the rates of business start-up, survival, efficiency, productivity, profitability and resilience are important and through which employment and economic growth may be secured, business success cannot be left to chance. Businesses require sound advice/guidance on: product, finance, operation and management, markets and marketing/market strategy, budgeting etc.
In work published by the What Works Centre for Local Economic Growth, funded by the UK Economic and Social Research Council, the Department for Business Innovation and Skills and the Department of Communities and Local Government entitled” Toolkit Business Advice – Tailored Support —–found among other things:
Study 29 (SMS3)—–That tailored support increases two year survival rates by 7.6%, on top of 8% increases arising from general subsidised consultancy services. They also found a 50% increase in the number of employees and a positive effect on sales.
Study 132 (SMS3) examined the impact of a Personal Business Advisor on firm productivity. The role of the personal business advisor is to provide SMEs with holistic advice on business problems and signpost the support services available to solve them. Using firm level data for the years 1994-2000, they found that assistance in 1996 had a positive and statistically significant effect on productivity growth over the subsequent four-year period.
Study 238 (SMS3) evaluated the effects of intensive and non-intensive assistance provided by Business Links, a UK business one-stop-shop support initiative on sales growth and employee growth using data at the firm level for the years 2003-2005, the study found no significant effect of either intensive or non-intensive assistance on sales but a positive effect of intensive assistance on employment growth.
APPRENTICESHIP PROGRAMMES
These provide opportunities for apprentices to learn/be trained at work in line /accordance with recognised standards. This can also provide opportunities for firms to undertake a form of self-audit to examine their strength and weaknesses and determine the best opportunities for the potential/prospective apprentice.
Today much emphasis is placed on further/higher academic study and obtaining a degree at the expense of vocational education. However, increasingly, even if one has a degree it can be very difficult to get a job. Degree apprentice programmes are becoming in increasing demand because sometimes apprentice degree holders getting a job.
In a Study by: Helmut Schmidt University, Hamburg, Germany, Published July 16, 2018 – Contact: Vera Jahn, which examined the impact of owner-managed small and medium-sized enterprises had on the firms’ apprenticeship activity:
The study says, as in many countries, owner-managed small and medium-sized enterprises (SMEs) are seen as a superior form of organising business and says, in Germany this view is referred to as MITTELSTAND. Some politicians are said to argue that “the German Mittel stand is Germany’s economic engine of the German economy and the Mittelstand is the German economic backbone. It is argued that Mittel stand firms essentially contribute to the resilience of the German economy in economic crisis. The German Mittel stand is also said account for a large share of total economic output and employment. Mittelstand firms are said to a major contribution to the German apprenticeship system and that apprenticeship training might contribute to minimize youth unemployment. Many countries are said to be interested in and aim at emulating the German Mittelstand model.
BUSINESS INCUBATOR PROGRAMMES
Incubator programmes are able to present good opportunities for sharing a range of services and facilities which are very valuable during the fledgeling stage of an enterprise. These services may include: business space, advice, administrative infrastructure, contacts in terms of funding, technology etc.
In a Study published in February 2022 involving three universities in Spain (viz. Rey Juan Carlos University, Madrid; ESIC University, Madrid; University of Cordoba, Cordoba, which sought to understand the situation that entrepreneurs have experienced during COVID-19 and its impact on these entrepreneurs. The question was whether business incubators as facilitating institutions of entrepreneurship have been determinants for the survival of start-ups.
The Study found that business incubators provide important support to reduce failure rate of their incubators and promote their long-term presence on the market. That they play a key role in boosting small enterprises. That incubators work on the initiative of public and private institutions and are entities that positively influence the survival of start-ups.
In another Study by MATEJBEL University, Faculty of Economics, Slovak Republic in 2022 on the role of Business Incubators in Supporting Small and Medium-sized business start-ups, found the types of companies which find incubators most helpful tend to be high-tech or knowledge-based businesses.