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2nd International Conference in Socially Responsible and
Sustainable Entrepreneurship and Innovation

24-25 October 2012
De Vere Grand Harbour Hotel, Southampton, UK
Conference jointly organised by Southampton Management School and the
Ecole de Management de Normandie

Stream 7: Public policies and social entrepreneurship




Private and public sector initiatives for the development of
entrepreneurship in Haiti:
The tourism industry, shouldn’t it be the priority?


Dr Hugues Séraphin1 PhD PGCE M.A
Lecturer, Event Management and Marketing (The University of Winchester)
Associate researcher CREDDI-LEAD EA 2438 GUYANE (Université des Antilles Guyane)

The University of Winchester, Faculty of Business, Law and Sport
West Downs Campus, Winchester, SO22 4NR (England)
hugues.seraphin@winchester.ac.uk
Mobile: 0044 7878425783




1
  Reviewer: Dr Tim Meldrum
Senior lecturer in Entrepreneurship and innovation, The University of Winchester
The University of Winchester, Faculty of Business, Law and Sport
West Downs Campus, Winchester, SO22 4NR (England)
tim.meldrum@winchester.ac.uk


                                                      1
2nd International Conference in Socially Responsible and
Sustainable Entrepreneurship and Innovation
24-25 October 2012
De Vere Grand Harbour Hotel, Southampton, UK
Conference jointly organised by Southampton Management School and the
Ecole de Management de Normandie
Stream 7: Public policies and social entrepreneurship


Private and public sector initiatives for the development of
entrepreneurship in Haiti:
The tourism industry, shouldn’t it be the priority?


Abstract

Since about one year, the Haitian government is aiming at attracting foreign direct investment
(FDI). This same government is also aiming at developing entrepreneurship. So far, the
government has failed to attract significant FDI due to the negative image of Haiti. At the
moment entrepreneurship appears has a more probable option for the development of the
country.
Many academic papers have been written about the Haitian economic situation. One of the
latest is the paper written by Junia Barreau (2012) entitled: „FDI: The difficult situation of
Haiti‟. However, hardly any academic paper has been written about entrepreneurship in the
tourism sector in Haiti as a potential source of economic development. This article aims to
contribute to the body of meta-literature in this area.
Starting with a review of academic papers on entrepreneurship and then initiatives from the
private and public sector to develop entrepreneurship in Haiti, this article adopts a
progressive approach successively presenting the tourism industry as the way forward for
Haiti and entrepreneurship as a vector.
Methodologically, this article builds on the academic critical literature on entrepreneurship
and tourist. Then, based on case studies we are going to see how the development of
Microfinance Institutions (MFIs) can contribute to the development of entrepreneurship and
to poverty reduction by providing poor people access to financial service. Last but not least,
we are going to explain why the tourism sector should be the pilot for this type of scheme.


Key words

Haiti; entrepreneur; tourism; MFI; poverty



                                              2
2nd International Conference in Socially Responsible and
Sustainable Entrepreneurship and Innovation

24-25 October 2012
De Vere Grand Harbour Hotel, Southampton, UK
Conference jointly organised by Southampton Management School and the
Ecole de Management de Normandie

Stream 7: Public policies and social entrepreneurship



Private and public sector initiatives for the development of
entrepreneurship in Haiti:
The tourism industry, shouldn’t it be the priority?




                                       3
1. INTRODUCTION

Before the January 2010 earthquake, Haiti was one of the poorest countries in the world 2. The
country was also known as an unsafe destination due to its political instability (Thomson,
2004; Higate and Henry, 2009). Because of this uncertainty, it has been very difficult for the
country to build and develop a sustainable form of economic development3. The current
government in its endeavour to develop the country is multiplying initiatives. Since about a
year, this government is aiming at attracting foreign direct investment (FDI) as a potential
way of economic development. The negative image of the country has made very difficult for
the government to attract foreign investors (Barreau, 2012). Encouraging entrepreneurship
has also been one of the measures pushed forward by the government with the support of the
international community. The private sector has also been quite active in terms of pushing
forward these types of initiatives. If those initiatives from the private and public sectors are
successful they should lead to some positive development as where it has existed in plenty,
entrepreneurship has played an important role in economic growth, innovation and in poverty
alleviation (Landes, 1998). Entrepreneurship in developing countries is the most understudied
important economic phenomenon today (Lingelbach, 2005). This paper is going to focus on
specific initiatives spearheaded by the public and private sectors to encourage
entrepreneurship. This paper is also going to explain why those initiatives should be tested in
the tourism sector first and then expanded to other sectors of the economy. The development
of entrepreneurship in tourism could be a way to fully involved and benefit the local
population and probably enable the tourism industry to account for a higher percentage of the
GDP. As Mshenga and Owuor (2009) explained, tourism provides a wide range of
opportunities for foreign investors and local entrepreneurs. Their results back up existing
academic research that explain how entrepreneurship plays a crucial role in social mobility
(Casson, 1991) and has the ability to save the economy of a country (Louart, 1980). It is also
to highlight the fact many Haitians are self-employed (Thomson, 2004). The greater the
poverty, the more necessity entrepreneurship there is, thus resulting in high rates of
entrepreneurial activity (Reynolds, 2001). Can we consider those self-employed Haitians as
‘entrepreneurs’? A negative answer to the question would be based on the fact they do not
create or innovate. Their strategies are individual and short term. Moreover, their businesses
are not operating with a strategy but as a need to survival (Van der Sterren, 2008). If at a

2
    www.tlfq.ulaval.ca
3
    http://lenouvelliste.com/article4.php?newsid=103359

                                                          4
microeconomic level it profitable, it is far from being the case at a macroeconomic level
(Paul et al, 2010). The challenge for the public and the private sectors will be to turn all the
self-employed Haitians into real ‘entrepreneurs’ in other words, innovators, i.e. a person that
brings about change by means of new processes and/or products (Schumpeter, 1934).
However, if we consider Sahlman et al (1994) and Spinelli (2008), for whom
entrepreneurship is all about the pursuit of opportunities and thinking entrepreneurially, the
Haitians can be considered as entrepreneurs. As this paper aims to examine the current
initiatives spearheaded by the Haitian government and the private sector to develop
entrepreneurship, we will be guided by the following research question: Can the development
of entrepreneurship in the tourism sector be the way forward for the economic development
of Haiti? Thus what is of interest in the paper is not how individuals identify and exploit
entrepreneurial opportunities launched by the public and/or private sector but a real
opportunity to assess the potential of entrepreneurship and tourism to reduce poverty. What is
also of interest in this paper is the opportunity to emphasise again on the fact that
entrepreneurship is a contextual concept. The paper proceeds as follows. First
entrepreneurship is discussed as a potential source of development for Haiti, focusing on two
initiatives: One from the private sector and one from the public sector supported by a ‘NGO’.
In the second section we are going to discuss why the development of entrepreneurship in the
tourism sector should be a priority for the government.



2. ENTREPRENEURSHIP IN HAITI

2.1) Environmental overview of Haiti
There are a number of models of marketing environment models that an organisation can use
to analyse the environmental data (Masterson, Pickton, 2010). PEST (Political, Economic,
Social, and Technological) is probably the best-know environmental model. A quick market
environment analysis of Haiti gives the following information: Haiti was once the richest
French colony. It was even called the ‘Pearl of the Antilles’. But today it is one of the poorest
countries in the world. Indicators witness a very poor level of human development: Life
expectancy (53 years), infant mortality (80%), maternal mortality (523 per 100000 live
births), and adult illiteracy (50%), unemployment among the active population (around 60%),
etc. The vulnerability of the Haitian population is very high with 65% of the population living
below the poverty threshold (Roc, 2008). Haiti, as many states with post-colonial legacy has
to face deficient security, law and order institutions, the use of violence by state and non state

                                                5
actors, the incapacity or the unwillingness of the government to provide basic services to the
population and the poor economic environment. Internal factors have not been the only
responsible for the state weakness. International interventions have also had negative effects
on the state. Haiti had little influence on the design of its own public policies and its economy
is largely shaped by outside forces. All the power was in the hand of foreign institutions. In
nowadays global economy, Haiti’s main competitive advantages have been its abundance of
low-wage, unskilled workers and its proximity to the USA. Haiti can therefore be classified
as a vulnerable state as it is exposed to outside forces, but also as a fragile state as its
structure lack political will and/or capacity to provide the basic functions needed for poverty
reduction, development and to safeguard the security and human rights of their populations,
fail to recognise and honour the social, political and economic pact between society and the
state. The Haitian elite who control commerce, strategic imports, hotels, telecommunication
and banks have often been accused of being an obstacle to the country’s development. The
classic role of the elite is usually one of investing in the country and generating economic
activity, wealth, jobs and influencing the government to increase trade, promote productivity,
ensure stability and protect investments. In Haiti, the elite does not assume this role. Its basic
activity is trade, with minor investments in case of crisis in the country. The weak
governance and absence of accountability has facilitated the creation of parallel economies
and patronage patterns (Moita, Gauthier, 2010). To summarise the situation, the public sector
(the government) and the private sector (the elite, local and international companies in Haiti)
have hardly done anything to encourage a sustainable development of the economy of the
country. The new government lead by Michel Marthély (since 2010) seems to be more
conscious of its responsibility. As the attempt of this government to attract FDI has more or
less failed (Barreau, 2012), we are going to focus in this paper on its attempts to develop
entrepreneurship. The involvement of the private sector will be also analysed.


2.2) Literature review
      Literature supporting the fact Haitians are not entrepreneurs
For Schumpeter, entrepreneurship and therefore the entrepreneurs play an important role on
the economic development of a country. Those entrepreneurs according to his theory have to
be innovative by introducing new goods or a new quality of a good, introduce new method of
production, open new market, development new source of supply or raw materials or half-
manufactured goods. Cantillon had a much more simplistic view of the entrepreneur as he
considered being an entrepreneur anyone who purchased a good at a certain price, used that

                                                6
good to produce a product and then sold the product at a certain price. Cantillon, however
included in his definition the notion of risk and adaptation to the market. For him, successful
entrepreneurs were those who managed to adapt the market and coped with risk and
uncertainty better than the others (Cantillon, 1758). Knight in his definition of
‘entrepreneurship’ also emphasises on the risk and uncertainty factors, but also add that being
an entrepreneur means being able to take action in the face of unknown future events (Knight,
1921). For Drucker (1985), the ‘risk’ exists only for the so-called entrepreneurs who don’t
know what they are doing. If we combine those three definitions of ‘entrepreneurship’ some
key points arise: Innovation, production, benefits, risk and uncertainty management. It is also
very important to make it clear that there is a different between owing a business and being
an entrepreneur (Cartland et al., 1984). However, if there is something the academic
community tends to increasingly agreed on, is the fact entrepreneurship is a crucial element
in fostering economic development and growth. The Global Entrepreneurship Monitor
(GEM) study has found a statistically significant relationship between entrepreneurial activity
and national economic growth (Huggins, Williams, in Carter, Jones-Evans, 2012). Quite
interestingly, GEM views two main reasons why entrepreneurship is developing: The first
one is ‘necessity entrepreneurship’. In this case ‘entrepreneurship’ is considered as the best
option available but not necessarily the preferred option. The second reason people or
government consider ‘entrepreneurship’ is because opportunities are available: ‘Opportunity
entrepreneurship’. The latest defines those who engage in ‘entrepreneurship’ out of choice.
That’s where the topic of incongruities (what is and what ought to be, or between what is and
what everybody assumes it to be) appears. Those definitions and characteristics of
‘entrepreneurs’ and ‘entrepreneurship’ are arising many questions regarding the private and
public sector initiatives in Haiti and their endeavour to develop entrepreneurship: (a) Based
on the very high level of illiteracy and unemployment alighted by Barreau (2012), are the
private and public sectors in Haiti misconceiving reality and making erroneous assumptions
about the potential of Haitians to be entrepreneurs, as being an entrepreneurs requires having
some particular skills (Carter, Jones-Evans, 2012)? (b) What is the real objective of the
private and public sectors: The development of small and/or micro businesses or the
development of entrepreneurs? As Cartland et al. (1984) clearly explained, there is a
difference between entrepreneurship and small businesses. (c) As many attempts of the
government to develop the economy has failed (i.e. encouraging FDI), is entrepreneurship
viewed as ‘necessity entrepreneurship’ or ‘Opportunity entrepreneurship’ in Haiti? If we
consider the fact that most innovations in public-service institutions are imposed on them

                                              7
either by outsiders or by catastrophes, and if we also consider the fact that public sector tends
to see their mission as a moral absolute rather than as economic (Drucker, 1985) we can
assume that in the case of Haiti, developing entrepreneurship is at the same time an
opportunity and a necessity for the government. (d) Despite the fact Drucker (1985) consider
risks as being elements that can be controlled by good entrepreneurs, the risk factor still
remains and in Haiti the risk factors are numerous and very high because of the political
instability and level of insecurity (Higate, Henry, 2009) and there is no way to eliminate or
reduce the element risk (Drucker, 1985). Despite all those risks present in Haiti, Thomson
(2004) believes that Haitians have the venture (products, service, sales, ideas, etc.) but they
don’t have the ‘business’ that is to say a viable, operating, organised organisation. Unless the
venture develops into a new business, it will not survive (Drucker, 1985). The main issue in
Haiti and other developing countries is that the strategy of so called entrepreneurs is a
survival strategy (Owuor and Mshenga, 2010) meaning they have a short term vision instead
of a long term one. Put in Bessant’s and Tidd’s (2011) way, they (Small and medium-sized
enterprises) are inward looking, too busy fighting fires and dealing with today’s crises to
worry about emerging storm clouds on the horizon. This will be a consequent challenge for
the Haitian government and the private sector. Both will have to be clear about: What they
want to achieve and what needs to be done to achieve those objectives. When developing
these types of initiatives, there are three potential outcomes to the newly established business:
Either they are established but do not grow (a), grow slowly (b) and (c) ideally graduates to a
larger size (Liedholm, Mead, 1999). The questions that need to be addressed are also: How
to create the condition to breed successful entrepreneurs and to maximise their potential?
      Literature supporting the fact Haitians are entrepreneurs
If the above literature review has identified some valid points to corroborate the fact Haitians
are not entrepreneurs, another stream of the literature on entrepreneurship demonstrate the
opposite. According to Sahlman, et al. (1999), thinking entrepreneurially is essential to be an
entrepreneur. Their definition of entrepreneurship also includes the importance of the
management style that involves pursuing opportunities without regard to the resources
currently controlled. According to Sahlman, et al. (1999)’s definition, the Haitians are
promoters (as opposed to ‘trustee’) in terms of their strategic orientation as they are driven
only by their perception of the opportunities that exist in their environment and are not
constrained by the resources at hand. This strategic orientation requires being creative and
innovative. Hence the reasons we believe the Haitians are entrepreneurs.


                                               8
In part (2.4) we are going to consider two community-based initiatives: One run by the
Clinton Bush Haiti Fund and supported by the government (The MEMA programme) and the
other one run by the private sector (Digicel Entrepreneur Award Ceremony). International
attention is increasingly being given to social entrepreneurship and social enterprises (Chell,
et al., 2010). Kuhns (2004) defines community based enterprises as enterprising contributing
to economic and social well-being and development of community members but with a clear
commercial intent. Based on the fact those projects main objective is to bring changes in
Haitians’ life they can be considered as being innovative therefore fully embrace the
definition of entrepreneurship which is concerned first and foremost with a process of
change, emergence and creation (Julien, 2000).


2.3) Opportunities available to locals to set up their own business: Two case studies


a) The MEMA project (Public sector/NGO)
The MEMA project which stands for ‘Mon Entreprise Mon Avenir’ (in English ‘My business
my future’) is an Haitian business accelerator funded by the Clinton Bush Haiti Fund aiming
at developing entrepreneurship in Haiti. In Haiti there are many small and micro businesses,
but most of them are unofficial meaning they do not abide to any law (Lautier, 2004). This
illegality is the norm in Haiti. This is what De Soto (1994) designated as the ‘extralegal
norm’. The MEMA project aims to help those entrepreneurs by providing them the required
training, financial (10000 USD for each shortlisted applicant) and legal assistance to turn
their venture into financially profitable businesses. The MEMA project also aims to create
institutions to support the new entrepreneurs via the creation of networks of businessmen and
women; consultants; business angels, etc. Anyone who wants to create a new business or
expand an existing business is eligible for the MEMA scheme. The project submitted are in
the following sectors: agro-industry; culture and hospitality; service for corporate; sustainable
energy and construction; factories. Three criteria are used to short list the projects:
Sustainability of the project (the project must show some evidence of potential development
in terms of job creation and generation of income); Innovation (the project must bring
something new to the country or make some products or services available to a larger
audience); inclusive (the project must involve all the categories of the population with low
income either as suppliers, customers or retailers)4.


4
    http://memahaiti.org/qparticiper.php

                                                9
b) The Digicel Entrepreneur of the Year Programme and the Award Ceremony: A private
sector initiative
The aim of the Digicel Entrepreneur of the Year Program is to build new economic
foundations for Haiti by identifying, rewarding and cultivating the new business leaders of
the future. The awards are a first step towards giving local business leaders, men and women,
a meaningful stake in a thoroughly regenerated, newly modernised, enterprise-driven Haiti.
The first Digicel Entrepreneur of the Year competition - whose theme was: „Ignite the Spirit
of Enterprise‟ - generated huge interest from Haitian business people, with some 220
nominations in its six categories. This followed through in 2011 with close to 250
nominations. Each year, 96 finalists are chosen from across the country’s four regions to
participate in regional finals–24 then emerged through to the national finals. A winner in each
category is announced and then the overall title awarded to one. Rebuilding a shattered
country takes time, energy and patience. That’s why the theme of 2012 Entrepreneur of the
Year competition is “Building for Our Tomorrow”. This year (2012) the Program
nominations will be invited from across the following seven categories:
Education, Tourism and Culture; Environment; Food and Agriculture; Industry; Services;
Emerging Entrepreneurs; Social Award: Woman in Business Community Award.
Nominations are evaluated according to strict criteria, which include the company’s strategic
direction, its financial performance, its record of innovation, and, importantly, its community
impact. All the Entrepreneur of the Year judges have achieved success in their own right and
possess the skills and integrity that are necessary to recognise and select outstanding
entrepreneurial individuals who have epitomised the entrepreneurial spirit. The month prior
to award’s night the 24 national finalists are given the opportunity to engage in an all-expense
paid three-day Executive Education Program. The three-day CEO Retreat includes training in
leadership, innovation and strategy in an effort to help them to better grow their enterprise
into a large, international organisation, which will ultimately elevate Haiti. This also gives the
opportunity for the finalist to network with peers.


c) Findings and discussion
The MEMA project and the Digicel Entrepreneur of the Year Programme are two initiatives
that show the emphasis on the development of entrepreneurship in Haiti as a vector of




                                               10
potential development for the country. Both projects are also claiming to be inclusive.
However, applicants for both projects are supposed to build up a comprehensive portfolio to
be submitted. If we consider the fact that 50% of the population in Haiti is illiterate and 65%
of this same population lives below the threshold of poverty (Roc, 2008), it is highly likely
that the applicants for the two projects will be from the middle class called in Haiti
‘Bourgeoisie’ or even from the ‘elite’ as the majority of the population does not have the
skills and knowledge to produce the required document to apply for the projects. As we
believe the original idea of both projects were to have all the categories of the population and
particularly the less fortunate to participate, it is therefore important for the government and
private sector to rethink the ‘assessment method’ as a limited part of the population for the
moment can produce and provide the required document.
Last but not least, if initiating such project can be viewed as being good in terms of self
actualisation of some social categories of the population, it is also important for the
government and the financial market in Haiti to consider poor people running micro and
small-scale enterprises as potential clients. The liberalisation of the financial market can help
to maximise the positive impacts of entrepreneurship development programmes like MEMA
or Digicel programme particularly when the short listed candidates are poor. So far, the
Haitian government was aiming at attracting FDI. As this attempt has failed, it is high time
for the government to reorientate itself towards expansion of domestic businesses and reform
it financial domestic sector and deliver specific financial product orientated towards micro
and small-scale enterprise. Financial sector modernisation in some developing countries has
been pushed in recent years through so-called Microfinance Institutions (MFIs).They deliver
credit to micro and small enterprises and contributes to poverty reduction by providing poor
people access to financial services (Van der Sterren, 2008). A well functioning financial
sector contributes positively to the level of economic growth and have pro-poor effects only
when poor have access to credit and savings services provided by banks (Beck et al., 2004).
The fact that in Haiti poor people are not considered as clients in a way limit the potential
positive impact of the various initiatives. Entrepreneurs in emerging markets rely heavily on
informal sources of finance to start their business (Bygrave, 2003). Limited personal and
family savings and an absence of financial innovation severely limit the growth prospects of
promising start-ups in developing countries (Lingelbach, 2005). Tourism is a service industry
and benefits strongly from liberalised and open economies (Van der Sterren, 2008).


                                               11
3. ENTREPRENEURSHIP IN THE TOURISM SECTOR: THE WAY FORWARD
FOR HAITI?


3.1) Questions

The Port-au-Prince Declaration (2011) put forward the creation of micro and small scale
enterprises (MSEs) as one of the seven key pillars for growth in the tourism industry in Haiti.
This Declaration highlighted also the high expectation the Haitian government places on the
tourism industry for the country’s economic development (Séraphin, 2011). However, the
development of MSEs in tourism (principle 7 of the Port-au-Prince Declaration, 2011) as a
possible way for development is quite a new measure in the government agenda and tells two
things about the new Haitian government: First, the new tourism administration spearheaded
by Stephanie Balmir-Villedrouin (Tourism Minister) is ready to experience new business
models (MSEs being one of the ways forward for the tourism industry) despite the fact it has
been quite slow to embrace this option as the lifeblood of tourism destinations particularly
when we know that elsewhere in the world the tourism industry is made up of mostly small
and medium enterprises (Cooper and Hall, 2008). Second, there is now an understanding that
in any sustainable tourism strategy it is necessary to engage many stakeholders (Carey, 2009)
including the local population (Darwling-Carter, 2010). As Haiti is almost virgin and full of
opportunities for investment in general and tourism related activities in particular (Chauvet,
2010) it is a legitimate option to be considered by the DMO. However, for a marginal and
less established destination like Haiti, the challenge of tourism development is to find an
answer to the following question: What are the current and future opportunities available for
MSEs in the tourism sector? As the second part of this paper aims to examine the current and
future opportunities available for MSEs in the tourism sector in Haiti, we will be guided by
the following research question: As the hospitality sector is the most significant sector of the
tourism industry in Haiti, can it be a driver for the development of MSTEs (Micro and Small
scale Tourism Enterprises)?


3.2) Entrepreneurship in the tourism sector: Theory

Michel (2000) claims tourism can fully benefit a destination, only if the locals are fully
involved in the planning and development of the industry. Based on literature,
entrepreneurship in tourism seems to be a serious contender to the involvement of the locals
in the tourism sector and in some cases to help them to improve their standard of living. In

                                              12
fact, according to Manyara and Jones (2005), micro and small scale enterprises can increase
the participation of the poor in the tourism industry. Rogerson (2003) based on his research in
South Africa backs up Manyara and Jones (2005) as he argues that it is only through small
enterprises that rural people can participate in tourism. Literature not only shows
entrepreneurship is a factor for economic development (Schumpeter 1934), but it can also
have a multiplier effect in some cases on local economies. When formal tourism enterprises
are owned by locals, there is a high likelihood of purchase of local supplies, meaning other
sectors of the local economy are going to benefit from this activity Shah (2000). Wanhill
(2000) supports this point of view as he contends that for tourism to be beneficial in terms of
income generations, economic growth, poverty reduction, and improving rural livelihoods, it
has to be linked to local economies such as agriculture and MSEs. Entrepreneurship in
tourism seems to be a possible option to help Haiti in its attempt to develop its tourism
industry, reduce the high rate of unemployment and improve the standard of living of the
locals. Butler (1980) views entrepreneurial development by local residents as occurring
spontaneously in response to growth in tourist demand. Theodat (2004) shows in his research
on Haiti and Thomson (2004), in his novel: ‘Bonjour blanc, a journey through Haiti‟ that this
entrepreneurial development mainly happened in the hospitality sector. We can complete
Butler’s theory (1980) by saying that, when there is a growth in tourist demand,
entrepreneurial development occurs in specific sectors of the tourism sector and those
developments are conducted by local residents with an established financial situation.
However, in some cases those residents who could have encouraged the economic
development of the country don’t want or can’t do it. Din (1992) noted that the receiving
community may not possess the cultural and economic capacity to appreciate the
opportunities. In this paper we will go a tone below by saying that only part of the receiving
community possesses this ability and in the case of Haiti, they are part of the upper class
(Elite). Kristen and Rogerson (2002) noted the same situation in their research on tourism
MSEs in South Africa where there is a limited involvement of local black entrepreneurs due
to their limited resources and difficulties to secure credit from financial institutions and also
because of limited and inadequate training and education as most of the entrepreneurs only
have primary level of education. Cooper (1981) also emphasised on skills and knowledge as
being an important factor in influencing entrepreneurship. Echtner (1995) emphasises the
importance of entrepreneurship training in these situations. In fact, the contemporary tourism
industry is dominated by MSEs and particularly micro-businesses. Quite often they are


                                               13
owned and run by people inexperienced in business, contributing therefore to an ‘under-
management’ of the tourism industry (Buhalis and Cooper, 1998; Cooper and Hall, 2008).

In the following part we are going to analyse the opportunities available to MSEs in Haiti and
establish a sketch of the entrepreneurs in the tourism sector in Haiti, even if Wickham (2004)
claims there are no real evidence of a single entrepreneurial personality.


3.3. Opportunities and limits for MSEs in the tourism sector in Haiti

      Research objectives and questions
In a one hand we have Paul et. al (2010) arguing that the Haitians are not entrepreneurs as
they do not innovate, do not produce and their businesses are only financially profitable at a
microeconomic level. In the other hand, Hjalager (2009) argues that entrepreneurs in tourism
are often found to start off with scarce business skills, and their innovativeness is limited. We
therefore need to identify what make an MSEs truly entrepreneurial in a context such as
Haiti. We are going to focus on the hospitality sector as it accounted for 27.7% of the GDP of
the country in 2006-2007. It makes this sector the most important component of the tourism
sector but it is also the main generator of income for the country just before agriculture
accounting for 25% of the GDP. Last but not least, many large sized hotels are currently
being built in Haiti among these are the Oasis, Hilton, Sheraton, etc. The sector is therefore
expanding.
Owuor and Mshenga (2010) research in the Kenya coast shows that hotels mostly purchased
food from local MSEs either directly from the producers or indirectly from intermediaries.
This represents an opportunity for MSEs. The Club Indigo, located in ‘La cote des Arcadins’,
one of the most popular tourist resorts in Haiti, buys directly its products from the local
producers. Moreover, Williams (1998) model of tourism entrepreneurship and linkages in
developing countries shows that when there is limited local provision of products to a new
hotel thus the products consumed by hotels are mostly imported. However, when there are
enough local suppliers the dependency to external supplier goes down. Based on the fact
agriculture keep busy roughly 50% of the population (figure 1), there is a huge potential of
suppliers for the hotels and huge opportunity for the locals to starts their own business.




                                               14
Figure 1: Main occupation of the population in Haiti


Still based on Owuor and Mshenga (2010) research, the hospitality sector offers opportunities
for:
- Flower producers; Beverage producers – Haiti produced many renowned beverages among
these are, the Prestige beer (winner of 2012 Gold Award at World Beer Cup in San Diego) or
rum Barbancour considered as being the best rum of the Caribbean (Thomson, 2004);
- Craftsmen able to supply furniture and provide maintenance service;
- Handicraft – hotels either directly sell their own handicraft or rent hotel premises to an MSE
owner to sell the handicraft (In Club Indigo, ex Club Med Magic Haiti, the souvenir shop
‘Aqua Coco’ sales handicraft from local artists)
According to (Jansen 2001; Roe et al 2002) these types of activities has a huge potential for
developing countries. Owuor and Mshenga (2010) research also indicates other potential
possibilities for MSEs like housekeeping service, laundry services, childcare services, hotel
waste collection services, transportation services for tourists that can be outsources to MSEs
when cheaper for hotels. As the hospitality sector is expanding in Haiti, the opportunities for
local MSEs should follow the trend. However, the potential development of the tourism
industry and is also likely to encourage the development of tourism self-employed poor
(street vendors, massage, luggage-carriers, shoeshine boys, etc...). Those poor are working
depending on the potential number of visitors as they are mainly trading services or products.
Because their ‘business’ is a need of survival as they are constantly short of money, the
quality of their service can give a negative image of the destination. It is therefore important
to consider providing training to those links of the tourism industry.




                                                       15
   Methods
A survey research design (questionnaire) was used to find out the linkage between the
hospitality sector in Haiti and MSEs. The study area is the north of Haiti and particularly the
hoteliers who are part of the ATH-Nord (Haiti Tourism Association – North branch).
A list of hotels was obtained from Mr Jean Bernard Simonet (owner of the hotel Cornier
Plage and Coordinator of the tourism professional in the north of Haiti). A questionnaire
(appendix 1) was sent by email to the 16 hoteliers part of the ATH-Nord.
       Findings and discussion
Only 3 hoteliers (18% of the sample) replied to the questionnaire. This is mainly due to the
fact in Haiti people like direct contact and hardly responds to emails (particularly when they
don’t know the sender) and some of the hotels are closed. The following tables (figure 2, 3, 4)
provide information about the 3 hoteliers who replied to the questionnaire:


Name of the hotel           Geographical location          N0. of staff (F/T P/T)   Origin of the owner
Cornier Plage Hotel         Cap Haïtien                    52                       Haitian
Les Jardins d’ Arceaux      Cap Haïtien                    1-5                      Haitian
Habitation Labadie          Labadie                        6-10                     Haitian
Figure 2: General information about the sample

Name of the hotel             Origin of the products purchased
Cornier Plage Hotel           - Haiti
                              -Dominican Republic (some products cheaper or not available in Haiti) i.e.
                              eggs
                              - Miami (equipment i.e. furniture)
                              -In house production for flowers

Les Jardins d’ Arceaux        - Haiti
Habitation Labadie            Close (will reopen end 2012)
Figure 3: Origin of the products purchased by the sample


Name of the hotel            % of hotel purchase made from MSEs             % of hotel purchase
                             (in Haiti)                                     made       from big
                                                                            companies
                                                                            (in Haiti)

Cornier Plage Hotel                 Fruits and vegetable (100%)            Bakery (100%)
                                    Meat (100%)                            Alcool and spirits (100%)
                                    Dairy products (100%)

Les Jardins d’ Arceaux              Fruits and vegetable (100%)
                                    Meat (100%)
                                    Dairy products (100%)

                                                      16
    Bakery (100%)
                                   Alcool and spirits (100%)
                                   Furniture and equipment (100%)
                                   Flower (100%)
                                   Seafood (100%)
                                   Egg (100%)

Habitation Labadie                 Close (will reopen end 2012)

Figure 4: percentage oh hotel purchases made from MSEs



The hoteliers who responded to the questionnaire reported that they are buying most of their
products from local MSEs (figure 6). Based on this research, it seems developing MSEs in
activities related to the hospitality sector can be an opportunity for the locals in Haiti as food
purchase for instance constitutes one-third of all tourist expenditure (Beliste, 1984), therefore
represent an opportunity to stimulate local agriculture and generate income and employment
for local economy (Telfer and Wall, 2000). Those type of business related minimize foreign
exchange leakages (Beliste, 1984). Entrepreneurship in this sector can also be profitable for
the overall economy of the country. So far, all the MSEs developed in Haiti were geared
toward services to individuals. Whereas, when the services offered are geared toward
business it become profitable to the whole economy and become profitable at a
macroeconomic level (Paul et al, 2010). As Owuor and Mshenga (2010) mentioned, MSEs
have to take into account such factors as price, quality and simply reliability if they are to
exploit the opportunities. The table (figure 5), reveals that some products are bought in
Miami as they are cheaper and better quality in the USA than in Haiti. There is therefore
some effort to be done in those two areas in Haiti. As Theodat (2004) mentioned, Haitians are
still amateurs in the tourism sector.


4. CONCLUSION


Even if Schumpeter’s definition of ‘entrepreneur’ is widely agreed in the community (and by
the Digicel Programme), innovation has to be explained alongside a context. What is
considered as being innovative in a country/territory is probably not somewhere else.
Moreover, entrepreneurship in developing countries is distinctive from that practiced in
developed countries (Lingelbach, et al. 2005). Innovation is therefore a contextual concept.
Therefore, to have an in depth understanding of entrepreneurship, there is a need to study it at

                                                   17
a cross-country level in order to compare the dimension of entrepreneurship (Chell, et al.,
2010). As this paper has a limited amount of data, the research limitations are profound.
Instead, the key contribution of the paper is that it points out a series of issues that might
deserve to be part of the future research agenda for hospitality innovation and
entrepreneurship research on Haiti (and developing countries). The hospitality and more
generally the tourism sector seems to be the ideal testing sector for any entrepreneurship
programme as they appear to be very compatible. This paper also shows that tourism can be
the driver for economic recovery for the destinations that have been out of bound for a while.
However, if entrepreneurship in the tourism sector is an option that the Haitian government is
seriously going to consider for the development of the country, it is vital that the MSEs in the
sector cooperate for a collective strategy rather than operating independently as clustering
minimizes logistic costs and add value to the activities of the organisations for the benefit of
the tourists who perceive the destination as a single product. It is now accepted that the
competitive advantage of a destination is founded on the collaborative coordination of the
diversity of the supply throughout the global destination product (Botti, Torres, 2008). It is
also very important that the Haitian government rethinks its financial system. The lack of
funding has constraining impacts on the development of social enterprise (Karatas-Ozkan,
Manville, 2011) and enterprise in general. Based on the economic situation of the country,
the Haitians have for the moment no choice but to remain promoters and ‘bootstrap’
(Sahlman, et al. 1999) with existing resources and grow organically.




                                              18
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                                                      21

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Private and public sector initiatives for the development of entrepreneurship in Haiti:

  • 1. 2nd International Conference in Socially Responsible and Sustainable Entrepreneurship and Innovation 24-25 October 2012 De Vere Grand Harbour Hotel, Southampton, UK Conference jointly organised by Southampton Management School and the Ecole de Management de Normandie Stream 7: Public policies and social entrepreneurship Private and public sector initiatives for the development of entrepreneurship in Haiti: The tourism industry, shouldn’t it be the priority? Dr Hugues Séraphin1 PhD PGCE M.A Lecturer, Event Management and Marketing (The University of Winchester) Associate researcher CREDDI-LEAD EA 2438 GUYANE (Université des Antilles Guyane) The University of Winchester, Faculty of Business, Law and Sport West Downs Campus, Winchester, SO22 4NR (England) hugues.seraphin@winchester.ac.uk Mobile: 0044 7878425783 1 Reviewer: Dr Tim Meldrum Senior lecturer in Entrepreneurship and innovation, The University of Winchester The University of Winchester, Faculty of Business, Law and Sport West Downs Campus, Winchester, SO22 4NR (England) tim.meldrum@winchester.ac.uk 1
  • 2. 2nd International Conference in Socially Responsible and Sustainable Entrepreneurship and Innovation 24-25 October 2012 De Vere Grand Harbour Hotel, Southampton, UK Conference jointly organised by Southampton Management School and the Ecole de Management de Normandie Stream 7: Public policies and social entrepreneurship Private and public sector initiatives for the development of entrepreneurship in Haiti: The tourism industry, shouldn’t it be the priority? Abstract Since about one year, the Haitian government is aiming at attracting foreign direct investment (FDI). This same government is also aiming at developing entrepreneurship. So far, the government has failed to attract significant FDI due to the negative image of Haiti. At the moment entrepreneurship appears has a more probable option for the development of the country. Many academic papers have been written about the Haitian economic situation. One of the latest is the paper written by Junia Barreau (2012) entitled: „FDI: The difficult situation of Haiti‟. However, hardly any academic paper has been written about entrepreneurship in the tourism sector in Haiti as a potential source of economic development. This article aims to contribute to the body of meta-literature in this area. Starting with a review of academic papers on entrepreneurship and then initiatives from the private and public sector to develop entrepreneurship in Haiti, this article adopts a progressive approach successively presenting the tourism industry as the way forward for Haiti and entrepreneurship as a vector. Methodologically, this article builds on the academic critical literature on entrepreneurship and tourist. Then, based on case studies we are going to see how the development of Microfinance Institutions (MFIs) can contribute to the development of entrepreneurship and to poverty reduction by providing poor people access to financial service. Last but not least, we are going to explain why the tourism sector should be the pilot for this type of scheme. Key words Haiti; entrepreneur; tourism; MFI; poverty 2
  • 3. 2nd International Conference in Socially Responsible and Sustainable Entrepreneurship and Innovation 24-25 October 2012 De Vere Grand Harbour Hotel, Southampton, UK Conference jointly organised by Southampton Management School and the Ecole de Management de Normandie Stream 7: Public policies and social entrepreneurship Private and public sector initiatives for the development of entrepreneurship in Haiti: The tourism industry, shouldn’t it be the priority? 3
  • 4. 1. INTRODUCTION Before the January 2010 earthquake, Haiti was one of the poorest countries in the world 2. The country was also known as an unsafe destination due to its political instability (Thomson, 2004; Higate and Henry, 2009). Because of this uncertainty, it has been very difficult for the country to build and develop a sustainable form of economic development3. The current government in its endeavour to develop the country is multiplying initiatives. Since about a year, this government is aiming at attracting foreign direct investment (FDI) as a potential way of economic development. The negative image of the country has made very difficult for the government to attract foreign investors (Barreau, 2012). Encouraging entrepreneurship has also been one of the measures pushed forward by the government with the support of the international community. The private sector has also been quite active in terms of pushing forward these types of initiatives. If those initiatives from the private and public sectors are successful they should lead to some positive development as where it has existed in plenty, entrepreneurship has played an important role in economic growth, innovation and in poverty alleviation (Landes, 1998). Entrepreneurship in developing countries is the most understudied important economic phenomenon today (Lingelbach, 2005). This paper is going to focus on specific initiatives spearheaded by the public and private sectors to encourage entrepreneurship. This paper is also going to explain why those initiatives should be tested in the tourism sector first and then expanded to other sectors of the economy. The development of entrepreneurship in tourism could be a way to fully involved and benefit the local population and probably enable the tourism industry to account for a higher percentage of the GDP. As Mshenga and Owuor (2009) explained, tourism provides a wide range of opportunities for foreign investors and local entrepreneurs. Their results back up existing academic research that explain how entrepreneurship plays a crucial role in social mobility (Casson, 1991) and has the ability to save the economy of a country (Louart, 1980). It is also to highlight the fact many Haitians are self-employed (Thomson, 2004). The greater the poverty, the more necessity entrepreneurship there is, thus resulting in high rates of entrepreneurial activity (Reynolds, 2001). Can we consider those self-employed Haitians as ‘entrepreneurs’? A negative answer to the question would be based on the fact they do not create or innovate. Their strategies are individual and short term. Moreover, their businesses are not operating with a strategy but as a need to survival (Van der Sterren, 2008). If at a 2 www.tlfq.ulaval.ca 3 http://lenouvelliste.com/article4.php?newsid=103359 4
  • 5. microeconomic level it profitable, it is far from being the case at a macroeconomic level (Paul et al, 2010). The challenge for the public and the private sectors will be to turn all the self-employed Haitians into real ‘entrepreneurs’ in other words, innovators, i.e. a person that brings about change by means of new processes and/or products (Schumpeter, 1934). However, if we consider Sahlman et al (1994) and Spinelli (2008), for whom entrepreneurship is all about the pursuit of opportunities and thinking entrepreneurially, the Haitians can be considered as entrepreneurs. As this paper aims to examine the current initiatives spearheaded by the Haitian government and the private sector to develop entrepreneurship, we will be guided by the following research question: Can the development of entrepreneurship in the tourism sector be the way forward for the economic development of Haiti? Thus what is of interest in the paper is not how individuals identify and exploit entrepreneurial opportunities launched by the public and/or private sector but a real opportunity to assess the potential of entrepreneurship and tourism to reduce poverty. What is also of interest in this paper is the opportunity to emphasise again on the fact that entrepreneurship is a contextual concept. The paper proceeds as follows. First entrepreneurship is discussed as a potential source of development for Haiti, focusing on two initiatives: One from the private sector and one from the public sector supported by a ‘NGO’. In the second section we are going to discuss why the development of entrepreneurship in the tourism sector should be a priority for the government. 2. ENTREPRENEURSHIP IN HAITI 2.1) Environmental overview of Haiti There are a number of models of marketing environment models that an organisation can use to analyse the environmental data (Masterson, Pickton, 2010). PEST (Political, Economic, Social, and Technological) is probably the best-know environmental model. A quick market environment analysis of Haiti gives the following information: Haiti was once the richest French colony. It was even called the ‘Pearl of the Antilles’. But today it is one of the poorest countries in the world. Indicators witness a very poor level of human development: Life expectancy (53 years), infant mortality (80%), maternal mortality (523 per 100000 live births), and adult illiteracy (50%), unemployment among the active population (around 60%), etc. The vulnerability of the Haitian population is very high with 65% of the population living below the poverty threshold (Roc, 2008). Haiti, as many states with post-colonial legacy has to face deficient security, law and order institutions, the use of violence by state and non state 5
  • 6. actors, the incapacity or the unwillingness of the government to provide basic services to the population and the poor economic environment. Internal factors have not been the only responsible for the state weakness. International interventions have also had negative effects on the state. Haiti had little influence on the design of its own public policies and its economy is largely shaped by outside forces. All the power was in the hand of foreign institutions. In nowadays global economy, Haiti’s main competitive advantages have been its abundance of low-wage, unskilled workers and its proximity to the USA. Haiti can therefore be classified as a vulnerable state as it is exposed to outside forces, but also as a fragile state as its structure lack political will and/or capacity to provide the basic functions needed for poverty reduction, development and to safeguard the security and human rights of their populations, fail to recognise and honour the social, political and economic pact between society and the state. The Haitian elite who control commerce, strategic imports, hotels, telecommunication and banks have often been accused of being an obstacle to the country’s development. The classic role of the elite is usually one of investing in the country and generating economic activity, wealth, jobs and influencing the government to increase trade, promote productivity, ensure stability and protect investments. In Haiti, the elite does not assume this role. Its basic activity is trade, with minor investments in case of crisis in the country. The weak governance and absence of accountability has facilitated the creation of parallel economies and patronage patterns (Moita, Gauthier, 2010). To summarise the situation, the public sector (the government) and the private sector (the elite, local and international companies in Haiti) have hardly done anything to encourage a sustainable development of the economy of the country. The new government lead by Michel Marthély (since 2010) seems to be more conscious of its responsibility. As the attempt of this government to attract FDI has more or less failed (Barreau, 2012), we are going to focus in this paper on its attempts to develop entrepreneurship. The involvement of the private sector will be also analysed. 2.2) Literature review  Literature supporting the fact Haitians are not entrepreneurs For Schumpeter, entrepreneurship and therefore the entrepreneurs play an important role on the economic development of a country. Those entrepreneurs according to his theory have to be innovative by introducing new goods or a new quality of a good, introduce new method of production, open new market, development new source of supply or raw materials or half- manufactured goods. Cantillon had a much more simplistic view of the entrepreneur as he considered being an entrepreneur anyone who purchased a good at a certain price, used that 6
  • 7. good to produce a product and then sold the product at a certain price. Cantillon, however included in his definition the notion of risk and adaptation to the market. For him, successful entrepreneurs were those who managed to adapt the market and coped with risk and uncertainty better than the others (Cantillon, 1758). Knight in his definition of ‘entrepreneurship’ also emphasises on the risk and uncertainty factors, but also add that being an entrepreneur means being able to take action in the face of unknown future events (Knight, 1921). For Drucker (1985), the ‘risk’ exists only for the so-called entrepreneurs who don’t know what they are doing. If we combine those three definitions of ‘entrepreneurship’ some key points arise: Innovation, production, benefits, risk and uncertainty management. It is also very important to make it clear that there is a different between owing a business and being an entrepreneur (Cartland et al., 1984). However, if there is something the academic community tends to increasingly agreed on, is the fact entrepreneurship is a crucial element in fostering economic development and growth. The Global Entrepreneurship Monitor (GEM) study has found a statistically significant relationship between entrepreneurial activity and national economic growth (Huggins, Williams, in Carter, Jones-Evans, 2012). Quite interestingly, GEM views two main reasons why entrepreneurship is developing: The first one is ‘necessity entrepreneurship’. In this case ‘entrepreneurship’ is considered as the best option available but not necessarily the preferred option. The second reason people or government consider ‘entrepreneurship’ is because opportunities are available: ‘Opportunity entrepreneurship’. The latest defines those who engage in ‘entrepreneurship’ out of choice. That’s where the topic of incongruities (what is and what ought to be, or between what is and what everybody assumes it to be) appears. Those definitions and characteristics of ‘entrepreneurs’ and ‘entrepreneurship’ are arising many questions regarding the private and public sector initiatives in Haiti and their endeavour to develop entrepreneurship: (a) Based on the very high level of illiteracy and unemployment alighted by Barreau (2012), are the private and public sectors in Haiti misconceiving reality and making erroneous assumptions about the potential of Haitians to be entrepreneurs, as being an entrepreneurs requires having some particular skills (Carter, Jones-Evans, 2012)? (b) What is the real objective of the private and public sectors: The development of small and/or micro businesses or the development of entrepreneurs? As Cartland et al. (1984) clearly explained, there is a difference between entrepreneurship and small businesses. (c) As many attempts of the government to develop the economy has failed (i.e. encouraging FDI), is entrepreneurship viewed as ‘necessity entrepreneurship’ or ‘Opportunity entrepreneurship’ in Haiti? If we consider the fact that most innovations in public-service institutions are imposed on them 7
  • 8. either by outsiders or by catastrophes, and if we also consider the fact that public sector tends to see their mission as a moral absolute rather than as economic (Drucker, 1985) we can assume that in the case of Haiti, developing entrepreneurship is at the same time an opportunity and a necessity for the government. (d) Despite the fact Drucker (1985) consider risks as being elements that can be controlled by good entrepreneurs, the risk factor still remains and in Haiti the risk factors are numerous and very high because of the political instability and level of insecurity (Higate, Henry, 2009) and there is no way to eliminate or reduce the element risk (Drucker, 1985). Despite all those risks present in Haiti, Thomson (2004) believes that Haitians have the venture (products, service, sales, ideas, etc.) but they don’t have the ‘business’ that is to say a viable, operating, organised organisation. Unless the venture develops into a new business, it will not survive (Drucker, 1985). The main issue in Haiti and other developing countries is that the strategy of so called entrepreneurs is a survival strategy (Owuor and Mshenga, 2010) meaning they have a short term vision instead of a long term one. Put in Bessant’s and Tidd’s (2011) way, they (Small and medium-sized enterprises) are inward looking, too busy fighting fires and dealing with today’s crises to worry about emerging storm clouds on the horizon. This will be a consequent challenge for the Haitian government and the private sector. Both will have to be clear about: What they want to achieve and what needs to be done to achieve those objectives. When developing these types of initiatives, there are three potential outcomes to the newly established business: Either they are established but do not grow (a), grow slowly (b) and (c) ideally graduates to a larger size (Liedholm, Mead, 1999). The questions that need to be addressed are also: How to create the condition to breed successful entrepreneurs and to maximise their potential?  Literature supporting the fact Haitians are entrepreneurs If the above literature review has identified some valid points to corroborate the fact Haitians are not entrepreneurs, another stream of the literature on entrepreneurship demonstrate the opposite. According to Sahlman, et al. (1999), thinking entrepreneurially is essential to be an entrepreneur. Their definition of entrepreneurship also includes the importance of the management style that involves pursuing opportunities without regard to the resources currently controlled. According to Sahlman, et al. (1999)’s definition, the Haitians are promoters (as opposed to ‘trustee’) in terms of their strategic orientation as they are driven only by their perception of the opportunities that exist in their environment and are not constrained by the resources at hand. This strategic orientation requires being creative and innovative. Hence the reasons we believe the Haitians are entrepreneurs. 8
  • 9. In part (2.4) we are going to consider two community-based initiatives: One run by the Clinton Bush Haiti Fund and supported by the government (The MEMA programme) and the other one run by the private sector (Digicel Entrepreneur Award Ceremony). International attention is increasingly being given to social entrepreneurship and social enterprises (Chell, et al., 2010). Kuhns (2004) defines community based enterprises as enterprising contributing to economic and social well-being and development of community members but with a clear commercial intent. Based on the fact those projects main objective is to bring changes in Haitians’ life they can be considered as being innovative therefore fully embrace the definition of entrepreneurship which is concerned first and foremost with a process of change, emergence and creation (Julien, 2000). 2.3) Opportunities available to locals to set up their own business: Two case studies a) The MEMA project (Public sector/NGO) The MEMA project which stands for ‘Mon Entreprise Mon Avenir’ (in English ‘My business my future’) is an Haitian business accelerator funded by the Clinton Bush Haiti Fund aiming at developing entrepreneurship in Haiti. In Haiti there are many small and micro businesses, but most of them are unofficial meaning they do not abide to any law (Lautier, 2004). This illegality is the norm in Haiti. This is what De Soto (1994) designated as the ‘extralegal norm’. The MEMA project aims to help those entrepreneurs by providing them the required training, financial (10000 USD for each shortlisted applicant) and legal assistance to turn their venture into financially profitable businesses. The MEMA project also aims to create institutions to support the new entrepreneurs via the creation of networks of businessmen and women; consultants; business angels, etc. Anyone who wants to create a new business or expand an existing business is eligible for the MEMA scheme. The project submitted are in the following sectors: agro-industry; culture and hospitality; service for corporate; sustainable energy and construction; factories. Three criteria are used to short list the projects: Sustainability of the project (the project must show some evidence of potential development in terms of job creation and generation of income); Innovation (the project must bring something new to the country or make some products or services available to a larger audience); inclusive (the project must involve all the categories of the population with low income either as suppliers, customers or retailers)4. 4 http://memahaiti.org/qparticiper.php 9
  • 10. b) The Digicel Entrepreneur of the Year Programme and the Award Ceremony: A private sector initiative The aim of the Digicel Entrepreneur of the Year Program is to build new economic foundations for Haiti by identifying, rewarding and cultivating the new business leaders of the future. The awards are a first step towards giving local business leaders, men and women, a meaningful stake in a thoroughly regenerated, newly modernised, enterprise-driven Haiti. The first Digicel Entrepreneur of the Year competition - whose theme was: „Ignite the Spirit of Enterprise‟ - generated huge interest from Haitian business people, with some 220 nominations in its six categories. This followed through in 2011 with close to 250 nominations. Each year, 96 finalists are chosen from across the country’s four regions to participate in regional finals–24 then emerged through to the national finals. A winner in each category is announced and then the overall title awarded to one. Rebuilding a shattered country takes time, energy and patience. That’s why the theme of 2012 Entrepreneur of the Year competition is “Building for Our Tomorrow”. This year (2012) the Program nominations will be invited from across the following seven categories: Education, Tourism and Culture; Environment; Food and Agriculture; Industry; Services; Emerging Entrepreneurs; Social Award: Woman in Business Community Award. Nominations are evaluated according to strict criteria, which include the company’s strategic direction, its financial performance, its record of innovation, and, importantly, its community impact. All the Entrepreneur of the Year judges have achieved success in their own right and possess the skills and integrity that are necessary to recognise and select outstanding entrepreneurial individuals who have epitomised the entrepreneurial spirit. The month prior to award’s night the 24 national finalists are given the opportunity to engage in an all-expense paid three-day Executive Education Program. The three-day CEO Retreat includes training in leadership, innovation and strategy in an effort to help them to better grow their enterprise into a large, international organisation, which will ultimately elevate Haiti. This also gives the opportunity for the finalist to network with peers. c) Findings and discussion The MEMA project and the Digicel Entrepreneur of the Year Programme are two initiatives that show the emphasis on the development of entrepreneurship in Haiti as a vector of 10
  • 11. potential development for the country. Both projects are also claiming to be inclusive. However, applicants for both projects are supposed to build up a comprehensive portfolio to be submitted. If we consider the fact that 50% of the population in Haiti is illiterate and 65% of this same population lives below the threshold of poverty (Roc, 2008), it is highly likely that the applicants for the two projects will be from the middle class called in Haiti ‘Bourgeoisie’ or even from the ‘elite’ as the majority of the population does not have the skills and knowledge to produce the required document to apply for the projects. As we believe the original idea of both projects were to have all the categories of the population and particularly the less fortunate to participate, it is therefore important for the government and private sector to rethink the ‘assessment method’ as a limited part of the population for the moment can produce and provide the required document. Last but not least, if initiating such project can be viewed as being good in terms of self actualisation of some social categories of the population, it is also important for the government and the financial market in Haiti to consider poor people running micro and small-scale enterprises as potential clients. The liberalisation of the financial market can help to maximise the positive impacts of entrepreneurship development programmes like MEMA or Digicel programme particularly when the short listed candidates are poor. So far, the Haitian government was aiming at attracting FDI. As this attempt has failed, it is high time for the government to reorientate itself towards expansion of domestic businesses and reform it financial domestic sector and deliver specific financial product orientated towards micro and small-scale enterprise. Financial sector modernisation in some developing countries has been pushed in recent years through so-called Microfinance Institutions (MFIs).They deliver credit to micro and small enterprises and contributes to poverty reduction by providing poor people access to financial services (Van der Sterren, 2008). A well functioning financial sector contributes positively to the level of economic growth and have pro-poor effects only when poor have access to credit and savings services provided by banks (Beck et al., 2004). The fact that in Haiti poor people are not considered as clients in a way limit the potential positive impact of the various initiatives. Entrepreneurs in emerging markets rely heavily on informal sources of finance to start their business (Bygrave, 2003). Limited personal and family savings and an absence of financial innovation severely limit the growth prospects of promising start-ups in developing countries (Lingelbach, 2005). Tourism is a service industry and benefits strongly from liberalised and open economies (Van der Sterren, 2008). 11
  • 12. 3. ENTREPRENEURSHIP IN THE TOURISM SECTOR: THE WAY FORWARD FOR HAITI? 3.1) Questions The Port-au-Prince Declaration (2011) put forward the creation of micro and small scale enterprises (MSEs) as one of the seven key pillars for growth in the tourism industry in Haiti. This Declaration highlighted also the high expectation the Haitian government places on the tourism industry for the country’s economic development (Séraphin, 2011). However, the development of MSEs in tourism (principle 7 of the Port-au-Prince Declaration, 2011) as a possible way for development is quite a new measure in the government agenda and tells two things about the new Haitian government: First, the new tourism administration spearheaded by Stephanie Balmir-Villedrouin (Tourism Minister) is ready to experience new business models (MSEs being one of the ways forward for the tourism industry) despite the fact it has been quite slow to embrace this option as the lifeblood of tourism destinations particularly when we know that elsewhere in the world the tourism industry is made up of mostly small and medium enterprises (Cooper and Hall, 2008). Second, there is now an understanding that in any sustainable tourism strategy it is necessary to engage many stakeholders (Carey, 2009) including the local population (Darwling-Carter, 2010). As Haiti is almost virgin and full of opportunities for investment in general and tourism related activities in particular (Chauvet, 2010) it is a legitimate option to be considered by the DMO. However, for a marginal and less established destination like Haiti, the challenge of tourism development is to find an answer to the following question: What are the current and future opportunities available for MSEs in the tourism sector? As the second part of this paper aims to examine the current and future opportunities available for MSEs in the tourism sector in Haiti, we will be guided by the following research question: As the hospitality sector is the most significant sector of the tourism industry in Haiti, can it be a driver for the development of MSTEs (Micro and Small scale Tourism Enterprises)? 3.2) Entrepreneurship in the tourism sector: Theory Michel (2000) claims tourism can fully benefit a destination, only if the locals are fully involved in the planning and development of the industry. Based on literature, entrepreneurship in tourism seems to be a serious contender to the involvement of the locals in the tourism sector and in some cases to help them to improve their standard of living. In 12
  • 13. fact, according to Manyara and Jones (2005), micro and small scale enterprises can increase the participation of the poor in the tourism industry. Rogerson (2003) based on his research in South Africa backs up Manyara and Jones (2005) as he argues that it is only through small enterprises that rural people can participate in tourism. Literature not only shows entrepreneurship is a factor for economic development (Schumpeter 1934), but it can also have a multiplier effect in some cases on local economies. When formal tourism enterprises are owned by locals, there is a high likelihood of purchase of local supplies, meaning other sectors of the local economy are going to benefit from this activity Shah (2000). Wanhill (2000) supports this point of view as he contends that for tourism to be beneficial in terms of income generations, economic growth, poverty reduction, and improving rural livelihoods, it has to be linked to local economies such as agriculture and MSEs. Entrepreneurship in tourism seems to be a possible option to help Haiti in its attempt to develop its tourism industry, reduce the high rate of unemployment and improve the standard of living of the locals. Butler (1980) views entrepreneurial development by local residents as occurring spontaneously in response to growth in tourist demand. Theodat (2004) shows in his research on Haiti and Thomson (2004), in his novel: ‘Bonjour blanc, a journey through Haiti‟ that this entrepreneurial development mainly happened in the hospitality sector. We can complete Butler’s theory (1980) by saying that, when there is a growth in tourist demand, entrepreneurial development occurs in specific sectors of the tourism sector and those developments are conducted by local residents with an established financial situation. However, in some cases those residents who could have encouraged the economic development of the country don’t want or can’t do it. Din (1992) noted that the receiving community may not possess the cultural and economic capacity to appreciate the opportunities. In this paper we will go a tone below by saying that only part of the receiving community possesses this ability and in the case of Haiti, they are part of the upper class (Elite). Kristen and Rogerson (2002) noted the same situation in their research on tourism MSEs in South Africa where there is a limited involvement of local black entrepreneurs due to their limited resources and difficulties to secure credit from financial institutions and also because of limited and inadequate training and education as most of the entrepreneurs only have primary level of education. Cooper (1981) also emphasised on skills and knowledge as being an important factor in influencing entrepreneurship. Echtner (1995) emphasises the importance of entrepreneurship training in these situations. In fact, the contemporary tourism industry is dominated by MSEs and particularly micro-businesses. Quite often they are 13
  • 14. owned and run by people inexperienced in business, contributing therefore to an ‘under- management’ of the tourism industry (Buhalis and Cooper, 1998; Cooper and Hall, 2008). In the following part we are going to analyse the opportunities available to MSEs in Haiti and establish a sketch of the entrepreneurs in the tourism sector in Haiti, even if Wickham (2004) claims there are no real evidence of a single entrepreneurial personality. 3.3. Opportunities and limits for MSEs in the tourism sector in Haiti  Research objectives and questions In a one hand we have Paul et. al (2010) arguing that the Haitians are not entrepreneurs as they do not innovate, do not produce and their businesses are only financially profitable at a microeconomic level. In the other hand, Hjalager (2009) argues that entrepreneurs in tourism are often found to start off with scarce business skills, and their innovativeness is limited. We therefore need to identify what make an MSEs truly entrepreneurial in a context such as Haiti. We are going to focus on the hospitality sector as it accounted for 27.7% of the GDP of the country in 2006-2007. It makes this sector the most important component of the tourism sector but it is also the main generator of income for the country just before agriculture accounting for 25% of the GDP. Last but not least, many large sized hotels are currently being built in Haiti among these are the Oasis, Hilton, Sheraton, etc. The sector is therefore expanding. Owuor and Mshenga (2010) research in the Kenya coast shows that hotels mostly purchased food from local MSEs either directly from the producers or indirectly from intermediaries. This represents an opportunity for MSEs. The Club Indigo, located in ‘La cote des Arcadins’, one of the most popular tourist resorts in Haiti, buys directly its products from the local producers. Moreover, Williams (1998) model of tourism entrepreneurship and linkages in developing countries shows that when there is limited local provision of products to a new hotel thus the products consumed by hotels are mostly imported. However, when there are enough local suppliers the dependency to external supplier goes down. Based on the fact agriculture keep busy roughly 50% of the population (figure 1), there is a huge potential of suppliers for the hotels and huge opportunity for the locals to starts their own business. 14
  • 15. Figure 1: Main occupation of the population in Haiti Still based on Owuor and Mshenga (2010) research, the hospitality sector offers opportunities for: - Flower producers; Beverage producers – Haiti produced many renowned beverages among these are, the Prestige beer (winner of 2012 Gold Award at World Beer Cup in San Diego) or rum Barbancour considered as being the best rum of the Caribbean (Thomson, 2004); - Craftsmen able to supply furniture and provide maintenance service; - Handicraft – hotels either directly sell their own handicraft or rent hotel premises to an MSE owner to sell the handicraft (In Club Indigo, ex Club Med Magic Haiti, the souvenir shop ‘Aqua Coco’ sales handicraft from local artists) According to (Jansen 2001; Roe et al 2002) these types of activities has a huge potential for developing countries. Owuor and Mshenga (2010) research also indicates other potential possibilities for MSEs like housekeeping service, laundry services, childcare services, hotel waste collection services, transportation services for tourists that can be outsources to MSEs when cheaper for hotels. As the hospitality sector is expanding in Haiti, the opportunities for local MSEs should follow the trend. However, the potential development of the tourism industry and is also likely to encourage the development of tourism self-employed poor (street vendors, massage, luggage-carriers, shoeshine boys, etc...). Those poor are working depending on the potential number of visitors as they are mainly trading services or products. Because their ‘business’ is a need of survival as they are constantly short of money, the quality of their service can give a negative image of the destination. It is therefore important to consider providing training to those links of the tourism industry. 15
  • 16. Methods A survey research design (questionnaire) was used to find out the linkage between the hospitality sector in Haiti and MSEs. The study area is the north of Haiti and particularly the hoteliers who are part of the ATH-Nord (Haiti Tourism Association – North branch). A list of hotels was obtained from Mr Jean Bernard Simonet (owner of the hotel Cornier Plage and Coordinator of the tourism professional in the north of Haiti). A questionnaire (appendix 1) was sent by email to the 16 hoteliers part of the ATH-Nord.  Findings and discussion Only 3 hoteliers (18% of the sample) replied to the questionnaire. This is mainly due to the fact in Haiti people like direct contact and hardly responds to emails (particularly when they don’t know the sender) and some of the hotels are closed. The following tables (figure 2, 3, 4) provide information about the 3 hoteliers who replied to the questionnaire: Name of the hotel Geographical location N0. of staff (F/T P/T) Origin of the owner Cornier Plage Hotel Cap Haïtien 52 Haitian Les Jardins d’ Arceaux Cap Haïtien 1-5 Haitian Habitation Labadie Labadie 6-10 Haitian Figure 2: General information about the sample Name of the hotel Origin of the products purchased Cornier Plage Hotel - Haiti -Dominican Republic (some products cheaper or not available in Haiti) i.e. eggs - Miami (equipment i.e. furniture) -In house production for flowers Les Jardins d’ Arceaux - Haiti Habitation Labadie Close (will reopen end 2012) Figure 3: Origin of the products purchased by the sample Name of the hotel % of hotel purchase made from MSEs % of hotel purchase (in Haiti) made from big companies (in Haiti) Cornier Plage Hotel  Fruits and vegetable (100%) Bakery (100%)  Meat (100%) Alcool and spirits (100%)  Dairy products (100%) Les Jardins d’ Arceaux  Fruits and vegetable (100%)  Meat (100%)  Dairy products (100%) 16
  • 17. Bakery (100%)  Alcool and spirits (100%)  Furniture and equipment (100%)  Flower (100%)  Seafood (100%)  Egg (100%) Habitation Labadie  Close (will reopen end 2012) Figure 4: percentage oh hotel purchases made from MSEs The hoteliers who responded to the questionnaire reported that they are buying most of their products from local MSEs (figure 6). Based on this research, it seems developing MSEs in activities related to the hospitality sector can be an opportunity for the locals in Haiti as food purchase for instance constitutes one-third of all tourist expenditure (Beliste, 1984), therefore represent an opportunity to stimulate local agriculture and generate income and employment for local economy (Telfer and Wall, 2000). Those type of business related minimize foreign exchange leakages (Beliste, 1984). Entrepreneurship in this sector can also be profitable for the overall economy of the country. So far, all the MSEs developed in Haiti were geared toward services to individuals. Whereas, when the services offered are geared toward business it become profitable to the whole economy and become profitable at a macroeconomic level (Paul et al, 2010). As Owuor and Mshenga (2010) mentioned, MSEs have to take into account such factors as price, quality and simply reliability if they are to exploit the opportunities. The table (figure 5), reveals that some products are bought in Miami as they are cheaper and better quality in the USA than in Haiti. There is therefore some effort to be done in those two areas in Haiti. As Theodat (2004) mentioned, Haitians are still amateurs in the tourism sector. 4. CONCLUSION Even if Schumpeter’s definition of ‘entrepreneur’ is widely agreed in the community (and by the Digicel Programme), innovation has to be explained alongside a context. What is considered as being innovative in a country/territory is probably not somewhere else. Moreover, entrepreneurship in developing countries is distinctive from that practiced in developed countries (Lingelbach, et al. 2005). Innovation is therefore a contextual concept. Therefore, to have an in depth understanding of entrepreneurship, there is a need to study it at 17
  • 18. a cross-country level in order to compare the dimension of entrepreneurship (Chell, et al., 2010). As this paper has a limited amount of data, the research limitations are profound. Instead, the key contribution of the paper is that it points out a series of issues that might deserve to be part of the future research agenda for hospitality innovation and entrepreneurship research on Haiti (and developing countries). The hospitality and more generally the tourism sector seems to be the ideal testing sector for any entrepreneurship programme as they appear to be very compatible. This paper also shows that tourism can be the driver for economic recovery for the destinations that have been out of bound for a while. However, if entrepreneurship in the tourism sector is an option that the Haitian government is seriously going to consider for the development of the country, it is vital that the MSEs in the sector cooperate for a collective strategy rather than operating independently as clustering minimizes logistic costs and add value to the activities of the organisations for the benefit of the tourists who perceive the destination as a single product. It is now accepted that the competitive advantage of a destination is founded on the collaborative coordination of the diversity of the supply throughout the global destination product (Botti, Torres, 2008). It is also very important that the Haitian government rethinks its financial system. The lack of funding has constraining impacts on the development of social enterprise (Karatas-Ozkan, Manville, 2011) and enterprise in general. Based on the economic situation of the country, the Haitians have for the moment no choice but to remain promoters and ‘bootstrap’ (Sahlman, et al. 1999) with existing resources and grow organically. 18
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