Diversification of economic revenue income must start with entrepreneurs, risk-takers, idea promoters and people with natural and developed talents and skills who are found throughout the human race and across the world’s geography. These are the individuals, the sources, the ideas, inventions and innovations to form and build future industries. These are the people, researchers and students showing talents and skills that grants, scholarship funds and universities pursue.
International business and governments of developing countries also seek such people and their ideas to start, change and improve business processes, sectors and industries, in the hope of expanding operations and diversifying economies, while increasing the very essential revenue income.
Developing ideas into industry requires investment funds. Ideas researched, developed and tested, are formed into a business model, combined with correct processes and procedures, executed using supporting infrastructure, all requiring financing. Some business and economies are investing in futuristic ‘eco-city’ infrastructure to attract, train and incubate such ideas into industries. Cities with all amenities built in; funding labs and production facilities, security, housing, religious, healthcare and education facilities for the best and the brightest.
Other business and economies are exporting whole business models; conceptualized, designed process and procedure, management and staff, to develop sectors and industries. Turnkey operations, such as stock exchanges, financial back offices are relocating to reduce cost. And others still are moving manufacturing into and among its raw materials, food processing on the farms and blending and refining during transportation.
Efficiencies are bought about from science and synergies. Detailed dynamic long-term strategic plans, surrounding the targeted markets, properly resourced using every competitive advantage, are selected for scaled implementation, incubation and monitoring, ideas into industries, and upon a predetermined level of success, recapitalized via an initial public offering (IPO) to repay and recycle the initial investment.
Hence, researching and developing the science and the synergy, which drives the next business model becomes more attractive to foreign direct investment. The much-needed and essential diversification must, therefore, be led by examples of future sectors and industries promoted globally, to remain relevant and beneficial.
Relevant and beneficial is to employ the right business models. The world markets are clearly described in terms of security, energy, construction, food, transportation, communication, healthcare, education and entertainment. Hence, small countries and economies have added advantages of forewarning from larger economies, because risks are identified firstly in larger markets and economies. The strength of geographic location, multiculturalism, peacefulness, Internet infrastructure, cheap (fuel and lubricant) energy and being quite maneuverable can compete in niche markets, attracting higher prestigious prices for quality, as opposed to standard prices for quantity, are all advantages of small nation states.
Such small economies can therefore attract necessary resources; equity and debt financing and skilled creative people, to win and keep market share in multiple sectors utilizing synergies and economies of scale.
What is needed from the executive branch of government is the political will to diversify across many sectors on a small scale. The initial investment, included in the development program, is to plan and incubate numerous industries, aiming for a few successes per year that can benefit from further expansion.
Engage international negotiators and trade lawyers to strengthen deals made under trade and industry functions. Establish a foreign revenue collection agency. Transform foreign missions into sales representatives, promoting people, products and places. Use public resources to file and to protect international copyrights and defend the country’s brand.
Locally, governmental endorsement is needed to establish ‘buy local’ and ‘buy all’ programs, expedite work permits, buildings approvals and other regulatory licenses.
Public private partnerships (PPP), build operate lease transfer (BOLT) and other such programs are generally used to strengthen operational efficiencies. Benefits to the nation, its people, its natural resources and its financial reserves, over time, are and must be measured and forecast for each existing and newly proposed category. Researched on a global scale, with various resulting economies of scale to match the nation’s size, each category and sub-category must indicate trends to meet eco-socioeconomic benchmarks within predetermined schedules.
Categories that fall short in creating more jobs and/or better-quality jobs in sustaining the environment and/or renewing natural resources, fall short in achieving profitability or take too long to impact the nation’s financials, must be quickly abandoned, focusing currently accessible resources, skilled personnel, local materials and development soft loans, on categories with better chances of succeeding.
Identifying feasible industries, sectors with long-term competitive advantages and realizing market share is the only avenue to achieve revenue diversification and release the nation’s profound dependency on petroleum exploration and production (E&P). The nation must aim to increase economic drivers and efforts to widen the range of products horizontally and vertically over the medium to long-term with long-term projects.
Examples include a natural gas pipeline networked to other neighboring islands; stable pricing strategies to earn foreign exchange; projects augmented by renewable energy sources, hoisting wind and submerging tidal turbines along the line, which will meet climate change goals and reduce regional electricity bills; and other ideas: equipment manufacturing, maintenance and repairs, agriculture production, building construction, medical tourism, etc.
The constant development, promotion and protection of the nation’s brand as it relates to tourism, arts, music and culture, agriculture, manufacturing, human expertise and marketable investments, with a strong emphasis on patented benefits to the nation, is key to such diversification efforts.
— Terrance A. Jennings