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


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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

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

  1. 1. 2nd International Conference in Socially Responsible andSustainable Entrepreneurship and Innovation24-25 October 2012De Vere Grand Harbour Hotel, Southampton, UKConference jointly organised by Southampton Management School and theEcole de Management de NormandieStream 7: Public policies and social entrepreneurshipPrivate and public sector initiatives for the development ofentrepreneurship in Haiti:The tourism industry, shouldn’t it be the priority?Dr Hugues Séraphin1 PhD PGCE M.ALecturer, 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 SportWest Downs Campus, Winchester, SO22 4NR (England) 0044 78784257831 Reviewer: Dr Tim MeldrumSenior lecturer in Entrepreneurship and innovation, The University of WinchesterThe University of Winchester, Faculty of Business, Law and SportWest Downs Campus, Winchester, SO22 4NR (England) 1
  2. 2. 2nd International Conference in Socially Responsible andSustainable Entrepreneurship and Innovation24-25 October 2012De Vere Grand Harbour Hotel, Southampton, UKConference jointly organised by Southampton Management School and theEcole de Management de NormandieStream 7: Public policies and social entrepreneurshipPrivate and public sector initiatives for the development ofentrepreneurship in Haiti:The tourism industry, shouldn’t it be the priority?AbstractSince 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, thegovernment has failed to attract significant FDI due to the negative image of Haiti. At themoment entrepreneurship appears has a more probable option for the development of thecountry.Many academic papers have been written about the Haitian economic situation. One of thelatest is the paper written by Junia Barreau (2012) entitled: „FDI: The difficult situation ofHaiti‟. However, hardly any academic paper has been written about entrepreneurship in thetourism sector in Haiti as a potential source of economic development. This article aims tocontribute to the body of meta-literature in this area.Starting with a review of academic papers on entrepreneurship and then initiatives from theprivate and public sector to develop entrepreneurship in Haiti, this article adopts aprogressive approach successively presenting the tourism industry as the way forward forHaiti and entrepreneurship as a vector.Methodologically, this article builds on the academic critical literature on entrepreneurshipand tourist. Then, based on case studies we are going to see how the development ofMicrofinance Institutions (MFIs) can contribute to the development of entrepreneurship andto 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 wordsHaiti; entrepreneur; tourism; MFI; poverty 2
  3. 3. 2nd International Conference in Socially Responsible andSustainable Entrepreneurship and Innovation24-25 October 2012De Vere Grand Harbour Hotel, Southampton, UKConference jointly organised by Southampton Management School and theEcole de Management de NormandieStream 7: Public policies and social entrepreneurshipPrivate and public sector initiatives for the development ofentrepreneurship in Haiti:The tourism industry, shouldn’t it be the priority? 3
  4. 4. 1. INTRODUCTIONBefore the January 2010 earthquake, Haiti was one of the poorest countries in the world 2. Thecountry 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 thecountry to build and develop a sustainable form of economic development3. The currentgovernment in its endeavour to develop the country is multiplying initiatives. Since about ayear, this government is aiming at attracting foreign direct investment (FDI) as a potentialway of economic development. The negative image of the country has made very difficult forthe government to attract foreign investors (Barreau, 2012). Encouraging entrepreneurshiphas also been one of the measures pushed forward by the government with the support of theinternational community. The private sector has also been quite active in terms of pushingforward these types of initiatives. If those initiatives from the private and public sectors aresuccessful 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 povertyalleviation (Landes, 1998). Entrepreneurship in developing countries is the most understudiedimportant economic phenomenon today (Lingelbach, 2005). This paper is going to focus onspecific initiatives spearheaded by the public and private sectors to encourageentrepreneurship. This paper is also going to explain why those initiatives should be tested inthe tourism sector first and then expanded to other sectors of the economy. The developmentof entrepreneurship in tourism could be a way to fully involved and benefit the localpopulation and probably enable the tourism industry to account for a higher percentage of theGDP. As Mshenga and Owuor (2009) explained, tourism provides a wide range ofopportunities for foreign investors and local entrepreneurs. Their results back up existingacademic 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 alsoto highlight the fact many Haitians are self-employed (Thomson, 2004). The greater thepoverty, the more necessity entrepreneurship there is, thus resulting in high rates ofentrepreneurial 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 notcreate or innovate. Their strategies are individual and short term. Moreover, their businessesare not operating with a strategy but as a need to survival (Van der Sterren, 2008). If at a2 www.tlfq.ulaval.ca3 4
  5. 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 theself-employed Haitians into real ‘entrepreneurs’ in other words, innovators, i.e. a person thatbrings about change by means of new processes and/or products (Schumpeter, 1934).However, if we consider Sahlman et al (1994) and Spinelli (2008), for whomentrepreneurship is all about the pursuit of opportunities and thinking entrepreneurially, theHaitians can be considered as entrepreneurs. As this paper aims to examine the currentinitiatives spearheaded by the Haitian government and the private sector to developentrepreneurship, we will be guided by the following research question: Can the developmentof entrepreneurship in the tourism sector be the way forward for the economic developmentof Haiti? Thus what is of interest in the paper is not how individuals identify and exploitentrepreneurial opportunities launched by the public and/or private sector but a realopportunity to assess the potential of entrepreneurship and tourism to reduce poverty. What isalso of interest in this paper is the opportunity to emphasise again on the fact thatentrepreneurship is a contextual concept. The paper proceeds as follows. Firstentrepreneurship is discussed as a potential source of development for Haiti, focusing on twoinitiatives: 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 thetourism sector should be a priority for the government.2. ENTREPRENEURSHIP IN HAITI2.1) Environmental overview of HaitiThere are a number of models of marketing environment models that an organisation can useto analyse the environmental data (Masterson, Pickton, 2010). PEST (Political, Economic,Social, and Technological) is probably the best-know environmental model. A quick marketenvironment analysis of Haiti gives the following information: Haiti was once the richestFrench colony. It was even called the ‘Pearl of the Antilles’. But today it is one of the poorestcountries in the world. Indicators witness a very poor level of human development: Lifeexpectancy (53 years), infant mortality (80%), maternal mortality (523 per 100000 livebirths), 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 livingbelow the poverty threshold (Roc, 2008). Haiti, as many states with post-colonial legacy hasto face deficient security, law and order institutions, the use of violence by state and non state 5
  6. 6. actors, the incapacity or the unwillingness of the government to provide basic services to thepopulation and the poor economic environment. Internal factors have not been the onlyresponsible for the state weakness. International interventions have also had negative effectson the state. Haiti had little influence on the design of its own public policies and its economyis largely shaped by outside forces. All the power was in the hand of foreign institutions. Innowadays global economy, Haiti’s main competitive advantages have been its abundance oflow-wage, unskilled workers and its proximity to the USA. Haiti can therefore be classifiedas a vulnerable state as it is exposed to outside forces, but also as a fragile state as itsstructure lack political will and/or capacity to provide the basic functions needed for povertyreduction, 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 thestate. The Haitian elite who control commerce, strategic imports, hotels, telecommunicationand banks have often been accused of being an obstacle to the country’s development. Theclassic role of the elite is usually one of investing in the country and generating economicactivity, 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 basicactivity is trade, with minor investments in case of crisis in the country. The weakgovernance and absence of accountability has facilitated the creation of parallel economiesand 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 thecountry. The new government lead by Michel Marthély (since 2010) seems to be moreconscious of its responsibility. As the attempt of this government to attract FDI has more orless failed (Barreau, 2012), we are going to focus in this paper on its attempts to developentrepreneurship. The involvement of the private sector will be also analysed.2.2) Literature review  Literature supporting the fact Haitians are not entrepreneursFor Schumpeter, entrepreneurship and therefore the entrepreneurs play an important role onthe economic development of a country. Those entrepreneurs according to his theory have tobe innovative by introducing new goods or a new quality of a good, introduce new method ofproduction, 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 heconsidered being an entrepreneur anyone who purchased a good at a certain price, used that 6
  7. 7. good to produce a product and then sold the product at a certain price. Cantillon, howeverincluded in his definition the notion of risk and adaptation to the market. For him, successfulentrepreneurs were those who managed to adapt the market and coped with risk anduncertainty better than the others (Cantillon, 1758). Knight in his definition of‘entrepreneurship’ also emphasises on the risk and uncertainty factors, but also add that beingan 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’tknow what they are doing. If we combine those three definitions of ‘entrepreneurship’ somekey points arise: Innovation, production, benefits, risk and uncertainty management. It is alsovery important to make it clear that there is a different between owing a business and beingan entrepreneur (Cartland et al., 1984). However, if there is something the academiccommunity tends to increasingly agreed on, is the fact entrepreneurship is a crucial elementin fostering economic development and growth. The Global Entrepreneurship Monitor(GEM) study has found a statistically significant relationship between entrepreneurial activityand national economic growth (Huggins, Williams, in Carter, Jones-Evans, 2012). Quiteinterestingly, GEM views two main reasons why entrepreneurship is developing: The firstone is ‘necessity entrepreneurship’. In this case ‘entrepreneurship’ is considered as the bestoption available but not necessarily the preferred option. The second reason people orgovernment consider ‘entrepreneurship’ is because opportunities are available: ‘Opportunityentrepreneurship’. 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 andwhat everybody assumes it to be) appears. Those definitions and characteristics of‘entrepreneurs’ and ‘entrepreneurship’ are arising many questions regarding the private andpublic sector initiatives in Haiti and their endeavour to develop entrepreneurship: (a) Basedon the very high level of illiteracy and unemployment alighted by Barreau (2012), are theprivate and public sectors in Haiti misconceiving reality and making erroneous assumptionsabout the potential of Haitians to be entrepreneurs, as being an entrepreneurs requires havingsome particular skills (Carter, Jones-Evans, 2012)? (b) What is the real objective of theprivate and public sectors: The development of small and/or micro businesses or thedevelopment of entrepreneurs? As Cartland et al. (1984) clearly explained, there is adifference between entrepreneurship and small businesses. (c) As many attempts of thegovernment to develop the economy has failed (i.e. encouraging FDI), is entrepreneurshipviewed as ‘necessity entrepreneurship’ or ‘Opportunity entrepreneurship’ in Haiti? If weconsider the fact that most innovations in public-service institutions are imposed on them 7
  8. 8. either by outsiders or by catastrophes, and if we also consider the fact that public sector tendsto see their mission as a moral absolute rather than as economic (Drucker, 1985) we canassume that in the case of Haiti, developing entrepreneurship is at the same time anopportunity and a necessity for the government. (d) Despite the fact Drucker (1985) considerrisks as being elements that can be controlled by good entrepreneurs, the risk factor stillremains and in Haiti the risk factors are numerous and very high because of the politicalinstability and level of insecurity (Higate, Henry, 2009) and there is no way to eliminate orreduce 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 theydon’t have the ‘business’ that is to say a viable, operating, organised organisation. Unless theventure develops into a new business, it will not survive (Drucker, 1985). The main issue inHaiti and other developing countries is that the strategy of so called entrepreneurs is asurvival strategy (Owuor and Mshenga, 2010) meaning they have a short term vision insteadof a long term one. Put in Bessant’s and Tidd’s (2011) way, they (Small and medium-sizedenterprises) are inward looking, too busy fighting fires and dealing with today’s crises toworry about emerging storm clouds on the horizon. This will be a consequent challenge forthe Haitian government and the private sector. Both will have to be clear about: What theywant to achieve and what needs to be done to achieve those objectives. When developingthese 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 alarger size (Liedholm, Mead, 1999). The questions that need to be addressed are also: Howto create the condition to breed successful entrepreneurs and to maximise their potential?  Literature supporting the fact Haitians are entrepreneursIf the above literature review has identified some valid points to corroborate the fact Haitiansare not entrepreneurs, another stream of the literature on entrepreneurship demonstrate theopposite. According to Sahlman, et al. (1999), thinking entrepreneurially is essential to be anentrepreneur. Their definition of entrepreneurship also includes the importance of themanagement style that involves pursuing opportunities without regard to the resourcescurrently controlled. According to Sahlman, et al. (1999)’s definition, the Haitians arepromoters (as opposed to ‘trustee’) in terms of their strategic orientation as they are drivenonly by their perception of the opportunities that exist in their environment and are notconstrained by the resources at hand. This strategic orientation requires being creative andinnovative. Hence the reasons we believe the Haitians are entrepreneurs. 8
  9. 9. In part (2.4) we are going to consider two community-based initiatives: One run by theClinton Bush Haiti Fund and supported by the government (The MEMA programme) and theother one run by the private sector (Digicel Entrepreneur Award Ceremony). Internationalattention is increasingly being given to social entrepreneurship and social enterprises (Chell,et al., 2010). Kuhns (2004) defines community based enterprises as enterprising contributingto economic and social well-being and development of community members but with a clearcommercial intent. Based on the fact those projects main objective is to bring changes inHaitians’ life they can be considered as being innovative therefore fully embrace thedefinition of entrepreneurship which is concerned first and foremost with a process ofchange, emergence and creation (Julien, 2000).2.3) Opportunities available to locals to set up their own business: Two case studiesa) The MEMA project (Public sector/NGO)The MEMA project which stands for ‘Mon Entreprise Mon Avenir’ (in English ‘My businessmy future’) is an Haitian business accelerator funded by the Clinton Bush Haiti Fund aimingat 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). Thisillegality is the norm in Haiti. This is what De Soto (1994) designated as the ‘extralegalnorm’. The MEMA project aims to help those entrepreneurs by providing them the requiredtraining, financial (10000 USD for each shortlisted applicant) and legal assistance to turntheir venture into financially profitable businesses. The MEMA project also aims to createinstitutions to support the new entrepreneurs via the creation of networks of businessmen andwomen; consultants; business angels, etc. Anyone who wants to create a new business orexpand an existing business is eligible for the MEMA scheme. The project submitted are inthe following sectors: agro-industry; culture and hospitality; service for corporate; sustainableenergy and construction; factories. Three criteria are used to short list the projects:Sustainability of the project (the project must show some evidence of potential developmentin terms of job creation and generation of income); Innovation (the project must bringsomething new to the country or make some products or services available to a largeraudience); inclusive (the project must involve all the categories of the population with lowincome either as suppliers, customers or retailers)4.4 9
  10. 10. b) The Digicel Entrepreneur of the Year Programme and the Award Ceremony: A privatesector initiativeThe aim of the Digicel Entrepreneur of the Year Program is to build new economicfoundations for Haiti by identifying, rewarding and cultivating the new business leaders ofthe 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 Spiritof Enterprise‟ - generated huge interest from Haitian business people, with some 220nominations in its six categories. This followed through in 2011 with close to 250nominations. Each year, 96 finalists are chosen from across the country’s four regions toparticipate in regional finals–24 then emerged through to the national finals. A winner in eachcategory is announced and then the overall title awarded to one. Rebuilding a shatteredcountry takes time, energy and patience. That’s why the theme of 2012 Entrepreneur of theYear competition is “Building for Our Tomorrow”. This year (2012) the Programnominations 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 strategicdirection, its financial performance, its record of innovation, and, importantly, its communityimpact. All the Entrepreneur of the Year judges have achieved success in their own right andpossess the skills and integrity that are necessary to recognise and select outstandingentrepreneurial individuals who have epitomised the entrepreneurial spirit. The month priorto award’s night the 24 national finalists are given the opportunity to engage in an all-expensepaid three-day Executive Education Program. The three-day CEO Retreat includes training inleadership, innovation and strategy in an effort to help them to better grow their enterpriseinto a large, international organisation, which will ultimately elevate Haiti. This also gives theopportunity for the finalist to network with peers.c) Findings and discussionThe MEMA project and the Digicel Entrepreneur of the Year Programme are two initiativesthat show the emphasis on the development of entrepreneurship in Haiti as a vector of 10
  11. 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 tobe 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 likelythat 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 theskills and knowledge to produce the required document to apply for the projects. As webelieve the original idea of both projects were to have all the categories of the population andparticularly the less fortunate to participate, it is therefore important for the government andprivate sector to rethink the ‘assessment method’ as a limited part of the population for themoment can produce and provide the required document.Last but not least, if initiating such project can be viewed as being good in terms of selfactualisation of some social categories of the population, it is also important for thegovernment and the financial market in Haiti to consider poor people running micro andsmall-scale enterprises as potential clients. The liberalisation of the financial market can helpto maximise the positive impacts of entrepreneurship development programmes like MEMAor Digicel programme particularly when the short listed candidates are poor. So far, theHaitian government was aiming at attracting FDI. As this attempt has failed, it is high timefor the government to reorientate itself towards expansion of domestic businesses and reformit financial domestic sector and deliver specific financial product orientated towards microand small-scale enterprise. Financial sector modernisation in some developing countries hasbeen pushed in recent years through so-called Microfinance Institutions (MFIs).They delivercredit to micro and small enterprises and contributes to poverty reduction by providing poorpeople access to financial services (Van der Sterren, 2008). A well functioning financialsector contributes positively to the level of economic growth and have pro-poor effects onlywhen 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 potentialpositive impact of the various initiatives. Entrepreneurs in emerging markets rely heavily oninformal sources of finance to start their business (Bygrave, 2003). Limited personal andfamily savings and an absence of financial innovation severely limit the growth prospects ofpromising start-ups in developing countries (Lingelbach, 2005). Tourism is a service industryand benefits strongly from liberalised and open economies (Van der Sterren, 2008). 11
  12. 12. 3. ENTREPRENEURSHIP IN THE TOURISM SECTOR: THE WAY FORWARDFOR HAITI?3.1) QuestionsThe Port-au-Prince Declaration (2011) put forward the creation of micro and small scaleenterprises (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 thetourism industry for the country’s economic development (Séraphin, 2011). However, thedevelopment of MSEs in tourism (principle 7 of the Port-au-Prince Declaration, 2011) as apossible way for development is quite a new measure in the government agenda and tells twothings about the new Haitian government: First, the new tourism administration spearheadedby Stephanie Balmir-Villedrouin (Tourism Minister) is ready to experience new businessmodels (MSEs being one of the ways forward for the tourism industry) despite the fact it hasbeen quite slow to embrace this option as the lifeblood of tourism destinations particularlywhen we know that elsewhere in the world the tourism industry is made up of mostly smalland medium enterprises (Cooper and Hall, 2008). Second, there is now an understanding thatin 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 ofopportunities 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 andless established destination like Haiti, the challenge of tourism development is to find ananswer to the following question: What are the current and future opportunities available forMSEs in the tourism sector? As the second part of this paper aims to examine the current andfuture opportunities available for MSEs in the tourism sector in Haiti, we will be guided bythe following research question: As the hospitality sector is the most significant sector of thetourism industry in Haiti, can it be a driver for the development of MSTEs (Micro and Smallscale Tourism Enterprises)?3.2) Entrepreneurship in the tourism sector: TheoryMichel (2000) claims tourism can fully benefit a destination, only if the locals are fullyinvolved 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 localsin the tourism sector and in some cases to help them to improve their standard of living. In 12
  13. 13. fact, according to Manyara and Jones (2005), micro and small scale enterprises can increasethe participation of the poor in the tourism industry. Rogerson (2003) based on his research inSouth Africa backs up Manyara and Jones (2005) as he argues that it is only through smallenterprises that rural people can participate in tourism. Literature not only showsentrepreneurship is a factor for economic development (Schumpeter 1934), but it can alsohave a multiplier effect in some cases on local economies. When formal tourism enterprisesare owned by locals, there is a high likelihood of purchase of local supplies, meaning othersectors 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 ofincome generations, economic growth, poverty reduction, and improving rural livelihoods, ithas to be linked to local economies such as agriculture and MSEs. Entrepreneurship intourism seems to be a possible option to help Haiti in its attempt to develop its tourismindustry, reduce the high rate of unemployment and improve the standard of living of thelocals. Butler (1980) views entrepreneurial development by local residents as occurringspontaneously in response to growth in tourist demand. Theodat (2004) shows in his researchon Haiti and Thomson (2004), in his novel: ‘Bonjour blanc, a journey through Haiti‟ that thisentrepreneurial development mainly happened in the hospitality sector. We can completeButler’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 thosedevelopments are conducted by local residents with an established financial situation.However, in some cases those residents who could have encouraged the economicdevelopment of the country don’t want or can’t do it. Din (1992) noted that the receivingcommunity may not possess the cultural and economic capacity to appreciate theopportunities. In this paper we will go a tone below by saying that only part of the receivingcommunity 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 tourismMSEs in South Africa where there is a limited involvement of local black entrepreneurs dueto their limited resources and difficulties to secure credit from financial institutions and alsobecause of limited and inadequate training and education as most of the entrepreneurs onlyhave primary level of education. Cooper (1981) also emphasised on skills and knowledge asbeing an important factor in influencing entrepreneurship. Echtner (1995) emphasises theimportance of entrepreneurship training in these situations. In fact, the contemporary tourismindustry is dominated by MSEs and particularly micro-businesses. Quite often they are 13
  14. 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 andestablish 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 questionsIn a one hand we have Paul et. al (2010) arguing that the Haitians are not entrepreneurs asthey do not innovate, do not produce and their businesses are only financially profitable at amicroeconomic level. In the other hand, Hjalager (2009) argues that entrepreneurs in tourismare often found to start off with scarce business skills, and their innovativeness is limited. Wetherefore need to identify what make an MSEs truly entrepreneurial in a context such asHaiti. We are going to focus on the hospitality sector as it accounted for 27.7% of the GDP ofthe country in 2006-2007. It makes this sector the most important component of the tourismsector but it is also the main generator of income for the country just before agricultureaccounting for 25% of the GDP. Last but not least, many large sized hotels are currentlybeing built in Haiti among these are the Oasis, Hilton, Sheraton, etc. The sector is thereforeexpanding.Owuor and Mshenga (2010) research in the Kenya coast shows that hotels mostly purchasedfood 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 localproducers. Moreover, Williams (1998) model of tourism entrepreneurship and linkages indeveloping countries shows that when there is limited local provision of products to a newhotel thus the products consumed by hotels are mostly imported. However, when there areenough local suppliers the dependency to external supplier goes down. Based on the factagriculture keep busy roughly 50% of the population (figure 1), there is a huge potential ofsuppliers for the hotels and huge opportunity for the locals to starts their own business. 14
  15. 15. Figure 1: Main occupation of the population in HaitiStill based on Owuor and Mshenga (2010) research, the hospitality sector offers opportunitiesfor:- Flower producers; Beverage producers – Haiti produced many renowned beverages amongthese are, the Prestige beer (winner of 2012 Gold Award at World Beer Cup in San Diego) orrum 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 MSEowner 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 fordeveloping countries. Owuor and Mshenga (2010) research also indicates other potentialpossibilities for MSEs like housekeeping service, laundry services, childcare services, hotelwaste collection services, transportation services for tourists that can be outsources to MSEswhen cheaper for hotels. As the hospitality sector is expanding in Haiti, the opportunities forlocal MSEs should follow the trend. However, the potential development of the tourismindustry and is also likely to encourage the development of tourism self-employed poor(street vendors, massage, luggage-carriers, shoeshine boys, etc...). Those poor are workingdepending 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, thequality of their service can give a negative image of the destination. It is therefore importantto consider providing training to those links of the tourism industry. 15
  16. 16.  MethodsA survey research design (questionnaire) was used to find out the linkage between thehospitality sector in Haiti and MSEs. The study area is the north of Haiti and particularly thehoteliers 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 CornierPlage 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 discussionOnly 3 hoteliers (18% of the sample) replied to the questionnaire. This is mainly due to thefact in Haiti people like direct contact and hardly responds to emails (particularly when theydon’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 ownerCornier Plage Hotel Cap Haïtien 52 HaitianLes Jardins d’ Arceaux Cap Haïtien 1-5 HaitianHabitation Labadie Labadie 6-10 HaitianFigure 2: General information about the sampleName of the hotel Origin of the products purchasedCornier 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 flowersLes Jardins d’ Arceaux - HaitiHabitation Labadie Close (will reopen end 2012)Figure 3: Origin of the products purchased by the sampleName 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. 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 MSEsThe hoteliers who responded to the questionnaire reported that they are buying most of theirproducts from local MSEs (figure 6). Based on this research, it seems developing MSEs inactivities related to the hospitality sector can be an opportunity for the locals in Haiti as foodpurchase for instance constitutes one-third of all tourist expenditure (Beliste, 1984), thereforerepresent an opportunity to stimulate local agriculture and generate income and employmentfor local economy (Telfer and Wall, 2000). Those type of business related minimize foreignexchange leakages (Beliste, 1984). Entrepreneurship in this sector can also be profitable forthe overall economy of the country. So far, all the MSEs developed in Haiti were gearedtoward services to individuals. Whereas, when the services offered are geared towardbusiness it become profitable to the whole economy and become profitable at amacroeconomic level (Paul et al, 2010). As Owuor and Mshenga (2010) mentioned, MSEshave to take into account such factors as price, quality and simply reliability if they are toexploit the opportunities. The table (figure 5), reveals that some products are bought inMiami as they are cheaper and better quality in the USA than in Haiti. There is thereforesome effort to be done in those two areas in Haiti. As Theodat (2004) mentioned, Haitians arestill amateurs in the tourism sector.4. CONCLUSIONEven if Schumpeter’s definition of ‘entrepreneur’ is widely agreed in the community (and bythe Digicel Programme), innovation has to be explained alongside a context. What isconsidered as being innovative in a country/territory is probably not somewhere else.Moreover, entrepreneurship in developing countries is distinctive from that practiced indeveloped 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. 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 mightdeserve to be part of the future research agenda for hospitality innovation andentrepreneurship research on Haiti (and developing countries). The hospitality and moregenerally the tourism sector seems to be the ideal testing sector for any entrepreneurshipprogramme as they appear to be very compatible. This paper also shows that tourism can bethe 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 isseriously going to consider for the development of the country, it is vital that the MSEs in thesector cooperate for a collective strategy rather than operating independently as clusteringminimizes logistic costs and add value to the activities of the organisations for the benefit ofthe tourists who perceive the destination as a single product. It is now accepted that thecompetitive advantage of a destination is founded on the collaborative coordination of thediversity of the supply throughout the global destination product (Botti, Torres, 2008). It isalso very important that the Haitian government rethinks its financial system. The lack offunding 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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