Web • linkage q2 (10 11 14) final

Yo u r P a t h w a y t o t h e A m e r i c a s | 2 0 1 4

LINKAGEEducation

Energy

Technology

Manufacturing

LEAD ARTICLE:

The Energy to push Diversification - pg 4

“Trinidad and Tobago can become a hub for smaller cluster industries such as biochemical and inorganics, which can result in high returns for smaller gas input.” - Dr. Paltoo

ITC: a Platform for Diversification - pg 14

Green Industrialism and Innovation in Tobago - pg 28

DIVERSIFICATION

Time to get going! Multi-dimensional education - pg 16

Diversifying the Social Sector - pg 20

AmCham T&T Linkage 2014 1

DIVERSIFICATION

“WHAT WE CAN OR CANNOT DO, WHAT WE CONSIDER POSSIBLE OR

IMPOSSIBLE, IS RARELY A FUNCTION OF OUR TRUE CAPABILITY. IT IS MORE LIKELY A FUNCTION OF OUR BELIEFS

ABOUT WHO WE ARE.”

- Anthony "Tony" RobbinsAmerican life coach

2 AmCham T&T Linkage 2014

It is with great pleasure that I welcome you to this issue of Linkage.

Since joining AmCham T&T in July, 2014 I have been honoured to be part of an organisation that actively seeks to make an impact on issues of trade, investment and industry within Trinidad and Tobago and the Western Hemisphere. I look forward to the challenge that lies ahead as I build on

the work of my predecessors and continue to add to the level of influence AmCham T&T has maintained for the past 22 years.

As AmCham T&T solidifies its position as the Pathway to the Americas, we focus our efforts on being the preferred point of access for information and partnership for those wishing to learn about and do business in Trinidad and Tobago, and indeed, the entire hemisphere. We have taken steps to strengthen our relationship with Latin America via increased participation in the Association of American Chambers of Commerce in Latin America (AACCLA); an organisation that holds a wealth of knowledge and prestige as they have been in existence for nearly a century. With close ties to the U.S Chamber of Commerce, the association also offers a unique position in advocating for “the promotion of trade and investment between the United States and the countries of the region through free trade, free market and free enterprise”. We know this partnership will offer great returns to our membership. We strongly believe that it will contribute to expansion of trade and investment in and from Trinidad and Tobago as businesses benefit from a transfer of knowledge, a greater ability to generate new business and investment opportunities.

We are also deepening our relationship with local stakeholders as we seek to be on the pulse of issues that affect our membership as these often play a great role in our members’ ability to function and achieve their greatest potential within the business community. Efforts are also being made to add to and enhance our current member services as we want to ensure innovation in our service delivery and efficiency in our organisation.

I look forward to several exciting and fruitful years at AmCham T&T. If ever there is anything the Secretariat or I can do to help, feel free to call on us.

Warmest Regards

NIRAD TEWARIE

LINKAGEVolume 2/2014 • ISSN 1814-1242 AmCham Trinidad & Tobago

62 Maraval RoadPort of Spain, Trinidad & Tobago, W.I.Tel: (868) 622-4466 / 0340 / 628-2508 Fax: (868) 628-9428Email: [email protected]: www.amchamtt.com

From the CEO

CONTENTS

Design & Layout: Paria Publishing Co. Ltd.Printing: Caribbean Printing Technologies Ltd.Photo of bottling line on cover courtesy Angostura Ltd.

The opinions expressed in the editorial contributions in Linkage may not necessarily be those of AmCham T&T. We welcome any comments you might have! Simply email a “Letter to the Editor” to the AmCham T&T Secretariat—[email protected].

SPECIAL FEATURE: DIVERSIFICATION

The Energy to push Diversificationby National Energy Corporation 4

Is your Human Resources Team Ready for Diversification? by Hayden O. Creque 12

ITC: A Platform for Diversification by Atiba Phillips 14

Time to get going! by Prof. Dyer Narinesingh 16

Diversifying the Social Sector by Dennise Demming 20

Performance Indicators for Achieving Sustainable Development by David D. Ramjohn 22

Pathways to Prosperity in the Americas by Kirk Francois 26

Cove Park: Green Industrialism and Innovation in Tobago by Cheryl Phillips 28

Diversify yourself! by Janice Learmond-Criqui 30

Are T&T Businesses fit for the future? by Ian Ivey 32

THOUGHT LEADERSHIP

Resilience in a Hotter World 34

BUSINESS

Social Media and The Workplace by Daren Dhoray 36The ins & Outs of CSR by Deborah Maharaj-Newling 38The Globalisation of the Western Hemisphere Energy Revolution by Edward Glab 41

AMCHAM T&T

Viewpoint 8Punto de Vista 10AmCham T&T on the Inside 44

AmCham T&T’s Mission

To be the preferred private sector business organisation for the stimulation of free and fair trade and investment within the Americas and the Caribbean.

AmCham will add value to our member companies within the following key focus areas:

Enhancement of Competitiveness Generation of new business and market access for services/goods Influence on policies and legislation Transfer of Knowledge Contribution to Sustainable Development

AmCham T&T’s Vision

DIVERSIFICATIONSPECIAL FEATURE: ENERGY AND THE ENERGY SECTOR

Special conditions apply


DIVERSIFICATION

continued on page 6

THE ENERGY TO PUSH DIVERSIFICATION

The initial mandate of the company was to continue the work first started by the Coordinating Task Force in monetising the country’s natural gas resources. In carrying out this mandate, National Energy was involved in the construction and operation of the early petrochemical plants and their development, and later the management of the industrial and marine infrastructure which services plants at the Pt. Lisas Industrial Estate.

Over the years, the company broadened its scope expanding and developing into a vital force in the local energy industry.

In 1999 National Energy, then a wholly owned subsidiary of The National Gas Company of Trinidad and Tobago (NGC), was given autonomy and entrusted with the responsibility for developing natural gas-based industrial sites and port and harbour infrastructure. In 2004 the mandate was expanded to include the conceptualisation, promotion, development and facilitation of new-energy based and downstream industries in Trinidad and Tobago.

In 2013 National Energy introduced its new brand identity to its various publics. Formerly

known as NEC, the company has become well positioned as the force that will push the expansion of the energy sector. The company is taking a proactive approach to promoting Trinidad and Tobago’s energy brand regionally and internationally, as well as continuing to execute the development of energy projects and infrastructure. Some of these projects are executed under the guidance of and in a collaborative effort with the Ministry of Energy and Energy Affairs (MEEA).

To this end National Energy has embarked on a number of initiatives that promote local downstream energy industry development.

Natural Gas to Petrochemicals Project In 2013 MEEA, NGC, National Energy, Mitsubishi Gas Chemical Co. Inc, Mitsubishi Corporation and Massy Group signed a Project Development Agreement for the establishment of a Methanol and Dimethyl Ether Plant, to be located at the National Energy- managed Union Industrial Estate (UIE) in La Brea.

Caribbean Gas Chemical Limited (CGCL) is the locally registered entity that will be developing this project. It is estimated that the project will commence in Q1 2015 pending the award of a

Certificate of Environmental Clearance (CEC) to be issued by the Environmental Management Authority (EMA) and the issuance of the Final Investment Decision (FID) by the investor, expected by October 2014.

Chemtech National Energy is engaged in the development of an integrated melamine processing facility with local developer, Chemtech Limited. In 2013 Chemtech received a CEC from the EMA. Subsequently, National Energy signed a Memorandum of Understanding (MOU) with Chemtech and at present the company is undertaking a business planning exercise, the results of which will further advance the project.

Metaldom In partnership with steel company Metaldom and Massy Group, National Energy is facilitating the establishment of a steel mill to produce steel billets which will be used to make reinforced steel bars, rounds and squares in a rolling mill.

Brighton Port Expansion The Port of Brighton, located at the La Brea Industrial Estate, currently facilitates companies engaged in a wide range of activities including energy services, offshore logistics services for oil and gas exploration and production activities as well as platform load-out operations.

In recent times there has been an increase in potential investment opportunities for neighbouring Union Industrial Estate (UIE) which the Port of Brighton also supports. Projects such as the Natural Gas to Petrochemicals

FROM ITS HISTORIC BIRTH IN 1979 NATIONAL ENERGY CORPORATION OF TRINIDAD AND TOBAGO LTD. (NATIONAL ENERGY) WAS ENTRUSTED WITH A GREAT RESPONSIBILITY THAT IMPACTED HEAVILY ON THE GROSS DOMESTIC PRODUCT OF TRINIDAD AND TOBAGO AND THE DAILY LIVES OF THE PEOPLE OF THE NATION.

THE FUTURE OF NEC IS A SIGN OF THINGS TO COME

THE BUSINESS OF CULTURE AND ENTERTAINMENT


DIVERSIFICATION

THE ENERGY TO PUSH DIVERSIFICATION (CONTINUED FROM PAGE 4)

project currently being developed by Caribbean Gas Company Limited (CGCL), Gasfin LNG, Chemtech and Metaldom are at different stages of development and are all planned for Union and La Brea Industrial Estates. As such, it is critical to determine the best port design/orientation that would cater to the needs of not only these projects but future industrial plans.

A Master Plan and Preliminary Design of the Port of Brighton has been developed and a preliminary/detailed engineering design will be conducted.

Port Construction is scheduled to commence in 2015 subject to the receipt of a CEC from the EMA.

Gasfin Gasfin Development SA, a multi-national independent developer of mid-scale LNG and natural gas projects, has proposed the development of a mid-scale LNG facility at La Brea called Caribbean LNG. Gasfin envisions that a two (2)-three (3) train facility would satisfy the Caribbean market, but proposes initially a single train facility to be constructed with a capacity of 500,000 tonnes per annum at an estimated capital expenditure of US$400 million.

In December 2013, Cabinet agreed to the execution of a Project Development Agreement (PDA) among Government of the Republic of Trinidad and Tobago (GORTT), Gasfin Development SA and National Energy for the

development of a mid-scale LNG plant for the supply of LNG to the Caribbean. In this regard National Energy and Gasfin are currently in negotiations to determine the terms and conditions that will define this PDA.

Port Galeota National Energy is responsible for construction and operationalisation of Port Galeota. The Port, located on the south-east peninsula of Trinidad and Tobago is a state of the art, multi-purpose facility that caters specifically to the offshore needs of exploration and production operators. The Port is expected to be the logistics hub for the energy sector, and to assist Trinidad and Tobago to capture the demand based on new upstream project activity in the region, contributing to the generation of revenue for not only National Energy, but for the country as a whole.

Phase 1 of the Galeota Port construction includes five(5) berths with the following lengths-

• 104 metres (Berth 1 & 3)• 148 metres (Berth 2)• 102 metres (Berth 4)• 71.8 metres (Berth 5)

At this time all of the berths are available for use and the Port is scheduled to be opened in 2014.

In addition to these initiatives, National Energy is actively pursuing energy based infrastructure, marine and logistics business opportunities

outside of Trinidad and Tobago, in regions such as the Guyanese-Suriname Basin and Africa.

It is the belief of the company’s Management and, in particular, its President, Dr. Vernon Paltoo that diversification within the industry is key to the advancement of the local energy sector, which has traditionally been a high revenue-earning sector. “While we have experienced success in the past with the introduction of LNG to the energy mix, National Energy now focuses on integration along the entire value chain. We must find innovative ways to move beyond primary products like methanol and ammonia, into higher-value secondary and tertiary derivatives,” says Dr. Paltoo.

Cognizant of the challenges facing the industry, due in large part to the introduction of shale gas in the United States, Dr. Paltoo believes that Trinidad and Tobago is more than equal to the challenge: “Trinidad and Tobago can become a hub for smaller cluster industries such as biochemical and inorganics, which can result in high returns for smaller gas input.”

With its new mandate and recent rebranding, National Energy is working in tandem with its partners to ensure the future sustainability of Trinidad and Tobago’s energy industry.

IT IS THE BELIEF OF THE COMPANY’S MANAGEMENT AND, IN PARTICULAR, ITS PRESIDENT DR. VERNON PALTOO THAT DIVERSIFICATION WITHIN THE INDUSTRY IS KEY TO THE ADVANCEMENT OF THE LOCAL ENERGY SECTOR, WHICH HAS TRADITIONALLY BEEN A HIGH REVENUE-EARNING SECTOR. “WHILE WE HAVE EXPERIENCED SUCCESS IN THE PAST WITH THE INTRODUCTION OF LNG TO THE ENERGY MIX, NATIONAL ENERGY NOW FOCUSES ON INTEGRATION ALONG THE ENTIRE VALUE CHAIN. WE MUST FIND INNOVATIVE WAYS TO MOVE BEYOND PRIMARY PRODUCTS LIKE METHANOL AND AMMONIA, INTO HIGHER-VALUE SECONDARY AND TERTIARY DERIVATIVES,” SAYS DR. PALTOO.


VIEWpoint BY HUGH HOWARDPRESIDENT OF AMCHAM T&T

It should be clear that global trade patterns have shifted over the past ten years. China’s robust economy is slowing, the economy in the Unites States is slowly recovering from the effects of sub-prime mortgage, global financial melt-down and related fiscal issues while the Americas are growing, notwithstanding the slowdown in Brazil. As we endeavor to make diversification of the local economy real instead of a

seemingly unattainable ideal, we the private sector need to look not just at government policies but also at ourselves.

In order for the economy to thrive amidst global economic highs and lows we must lead the way in developing our non-energy sectors and encourage innovation and increased competiveness. While diversifying our revenue streams away from just natural resources, we must also consider the gains that can be made from diversifying our optimising investment in human capital.

A shift in focus to human capital investment may be the required catalyst to propel our country into a knowledge based economy. In formulating strategies on developing a more knowledge-based and competitive economy, we must strive to maintain a balance in all areas of academics. There has been a lot of emphasis on Science, Technology, Engineering

and Mathematics (STEM) in recent years as the world becomes more technologically advanced and we seek to be on the cutting edge of technological innovation. While this focus has its benefits, we must guard against developing a mono dimensional and restrictive view of economic development. It is essential, therefore, that we not only drive the conversation on the benefits of a knowledge based economy but also expand the paradigm to ensure an all-inclusive engagement of the multiple intelligences of our human capital, by focusing on the social sciences such as history, anthropology and the creative industries.

This thrust needs to go beyond simply facilitating or sponsoring traditional education programmes and it must also address investment in Research and Development, which is a key factor in developing and maintaining a competitive and innovative economy. It is noteworthy that the percentage of the Gross Domestic Product (GDP) contributions to R&D in developed countries far outweighs the percentage invested by developing countries. For example, in 2011 Singapore’s percentage investment in R&D was 2.23 compared with Trinidad and Tobago’s investment in GDP of 0.04 percent. We must be forever mindful, however, that R&D investment is not the sole obligation of the government, but is also an essential responsibility of the private sector. It is one of the key areas for meaningful public/private partnership collaboration and engagement. We must ensure that our investment is as complex and diverse as the human capital in which we seek to invest in. This, inter alia, will involve harnessing the human potential from all walks of life and translating this into value added options for economic viability and sustainable and equitable development.


POR HUGH HOWARDPRESIDENTE DE AMCHAM T&T

Es importante destacar que los patrones mundiales del comercio han sufrido un cambio en los últimos diez años. La robusta economía china se está enlenteciendo, la economía de los Estados Unidos se recupera lentamente de los efectos de la hipoteca de alto riesgo, de la debacle financiera global y de temas fiscales conexos, mientras se evidencia un crecimiento en las Américas, no obstante la desaceleración en Brasil. Al esforzarnos por lograr que

la diversificación de la economía local sea real y no un ideal aparentemente inalcanzable, nosotros como sector privado debemos no solo analizar las políticas gubernamentales sino también el yo interior.

Para que la economía pueda prosperar en medio de las altas y bajas económicas a nivel global, debemos encabezar el desarrollo de nuestros sectores no energéticos y fomentar la innovación y el aumento de la competitividad. Al diversificar los flujos de ingresos más allá de los recursos naturales únicamente, también debemos tener en cuenta los beneficios que puedan derivarse de la diversificación de nuestras inversiones optimizadas en el capital humano.

Quizás se requiera un cambio de atención hacia las inversiones en capital humano como catalizador para lanzar a nuestro país a una economía basada en el conocimiento. Al formularse estrategias sobre el desarrollo de una economía con mayor base cognitiva y más competitividad, debemos esforzarnos por mantener un equilibrio en todas las áreas del sector académico.

Ha habido mucho énfasis en años recientes en la Ciencia, la Tecnología, la Ingeniería y la Matemática (CTIM), a medida que el mundo se torna más avanzado tecnológicamente y buscamos situarnos a la vanguardia de la innovación tecnológica. Aunque este enfoque tiene sus beneficios, debemos cuidarnos de no desarrollar una visión monodimensional y restrictiva del desarrollo económico. Resulta esencial, por ende, que no solo conduzcamos el debate en cuanto a los beneficios de una economía con base cognitiva sino que también ampliemos el paradigma para garantizar una participación totalmente inclusiva de los múltiples tipos de inteligencia de nuestro capital humano, centrándonos en las ciencias sociales como la historia, la antropología y las industrias creativas.

Este impulso debe ir más allá del simple facilitamiento o patrocinio de programas educativos tradicionales y deberá, además, abordar las inversiones en Investigación y Desarrollo, que constituye un factor clave para el desarrollo y mantenimiento de una economía competitiva e innovadora. Debe destacarse que el porcentaje de contribuciones del Producto Interno Bruto (PIB) a la I&D en los países desarrollados supera con creces el porcentaje invertido por los países en vías de desarrollo. Por ejemplo, en 2011, el porcentaje de inversiones en I&D en Singapur fue de 2,23 – comparado con las inversiones de Trinidad y Tobago, de 0,04% de PIB. Debemos siempre recordar, sin embargo, que las inversiones en I&D no son solo responsabilidad del gobierno, sino que también constituyen una responsabilidad esencial del sector privado. Es una de las áreas claves donde debe haber colaboración y participación sustancial de las alianzas públicas y privadas. Debemos garantizar que nuestras inversiones sean tan complejas y diversas como el capital humano en el que intentamos invertir. Este elemento, entre otros, conllevará el aprovechamiento del potencial humano presente en todas las esferas de la vida y convertirlo en opciones de valor añadido para una viabilidad económica y un desarrollo sustentable y equitativo.

PUNTOdeVista


DIVERSIFICATION

IS YOUR HUMAN RESOURCES TEAM READY FOR DIVERSIFICATION?

BY HAYDEN O. CREQUEManager, Aegis Business Solutions Limited

An analysis of the work traditionally done and emerging, yields four key functions necessary to serving the global and industry diverse organisation – Corporate Services, Shared Services, Business Partners, and Outsourcing Providers.

Corporate Services includes culture building through stakeholders, alignment of the human resource structure with the business structure, career development and training of employees. The Corporate Services function has oversight and drives all other functions. It is thus responsible for the development of the human resource function. Here practitioners seek to drive human resource activities consistent with business objectives. Corporate Services also participates in strategy development and is responsible for driving alignment in the diversified enterprise.

To add value then, Human Resources must adopt a new paradigm in execution and approach. Furthermore, to enable business success, Human Resources must play an integral role in organisational strategy development and drive organisational alignment.

This is especially true in Trinidad & Tobago where employment is not “at will.” There are distinct roles and discrete functions necessary to build an effective human resource function capable of meeting diverse business challenges.

ORGANISATIONS ARE INCREASINGLY EMBRACING GLOBAL AND INDUSTRY DIVERSIFICATION. CENTRALISED AND TACTICAL HUMAN RESOURCE FUNCTIONS ARE ILL-SUITED TO MEETING THE UNIQUE CHALLENGES OF THE DIVERSE ORGANISATION.

Operationalbusinesspartners

ServiceCenters

Corporate

Outsourcing


DIVERSIFICATION

Shared Services centralises and standardises routine human resource work. The goal is to curb redundancy and duplication of effort. Best of breed Shared Services, regardless of the size of the organisation for example, enables online access to employee information such as benefits, and career opportunities. In addition, Shared Services handles routine recurring tasks including payroll processing.

Business Partners are embedded with and work directly on the frontlines with managers and the operational leadership. They frequently possess idiosyncratic knowledge that is industry and geography (read country) specific. Business Partners are primarily responsible for the operationalisation of efforts to drive alignment. They also provide important feedback to Corporate Services, and serve as guides to leaders and individual contributors in resolving conflicts, and accessing Shared Services.

Outsourcing eschews recruiting knowledge as needed as compared to hiring additional team members. For any sized organisation this strategic use of skilled and experienced practitioners is an effective means for accelerating organisational change, accessing resources as needed, and addressing diversification cost effectively. Outsourced providers are usually called on to complete discrete tasks, conduct organisational audits, benchmark the enterprise, deliver training, and coach human resource team members. In addition, where for example the enterprise sets up outposts, they can be integral to providing an array of services traditionally

rendered by an organisation’s human resource team (see chart below).

Human Resource Strategy Development is concerned with integrating human resource management strategies and systems to achieve the overall mission, strategies, and success of the diverse enterprise while meeting the needs of team members and other stakeholders. It links Human Resources directly to the strategic plan of the organisation. Organisations routinely complete financial plans to ensure they achieve organisational goals and while workforce plans are not as common, they are just as important. Workforce planning in Trinidad & Tobago is very important because the employee centric Industrial Relations Act affords “for cause” terminations, and retrenchment in limited circumstances, and frequently requires costly severance payments.

Participation in enterprise strategic planning enables Human Resources to proactively support the direction of the organisation. Furthermore, strategic human resource planning is also important for budgeting so that the enterprise can factor costs, including recruitment, into the organisation's operating costs. Human Resources Strategies that support organisational strategies include: a) Training and development; b) Recruitment; c) Outsourcing; and d) Alignment.

Training and development strategies include providing staff with training to take on new roles, and current staff with development opportunities to prepare them for future jobs.

Training and development needs can be met in a variety of ways including sending employees to take courses or certificates or through on-the-job training.

Recruitment strategies include recruiting new staff with the skill and abilities that your organisation will need, considering all the available options for strategically promoting job openings, and encouraging suitable candidates to apply. An example, perhaps your organisation has a need for a new fundraiser now to plan events as part of your fundraising plan. However, if your organisation is considering moving from fundraising through special events to planned giving, your recruitment strategy should be to find someone who can do both to meet the future organisation need.

Outsourcing strategies include using external individuals or organisations to complete some tasks. As stated before many organisations look outside their own staff pool and contract for certain skills. This is particularly helpful for accomplishing specific, specialised tasks that do not require ongoing full-time work. Note that each outsourcing decision has implications for meeting the organisation's goals, the provider should therefore be carefully evaluated.

Alignment strategies include structuring merit and incentive compensation programs to align individual team member objectives with the organisation’s strategies and prerogatives. In addition, Human Resources plays an integral role in information dissemination and ensuring team member feedback is heard.

In summary the global and industry diverse organisation will face challenges that require a decentralised, strategically oriented, proactive, and specialised human resource function that is embedded with Senior Leadership, and accessible by all team members. The new human resource paradigm is a requisite for diversification success.

Director of Shared Services

Director of Corporate Services

Director ofPartnerships

Chief Human Resource Officer

Outsourced Services

MANY ORGANISATIONS LOOK OUTSIDE THEIR OWN STAFF POOL AND CONTRACT FOR CERTAIN SKILLS. THIS IS PARTICULARLY HELPFUL FOR ACCOMPLISHING SPECIFIC, SPECIALISED TASKS THAT DO NOT REQUIRE ONGOING FULL-TIME WORK.

Rudimentary organisation structure by function:


DIVERSIFICATION

The Caribbean must seek to build upon its historical strengths (e.g. global brands in energy, tourism and financial services, as well as its creative and dynamic people), and craft national and regional strategies aimed toward assuring long-term sustainable development based on diversified productive sectors.

However, transitioning these traditional economic structures into diversified and knowledge-based engines of growth, will entail the adoption of, “more productive company strategies requiring more highly skilled people, more reliable information, more efficient government processes, improved infrastructure, better suppliers, more advanced research institutions and more intense competitive

pressure, among other things” (Martin 2003). Information and Communication Technologies are fundamental to the achievement of this agenda.

Traditionally we have thought of ICTs as limited to telecommunications. However, beyond connectivity, the true potential of ICT lies in its ability to enable better integrated information flows, price discovery, competitive intelligence, new transactional capacity, opportunity recognition, and customer collaboration.

ICTs have the greatest potential to facilitate diversification, particularly of Small Island

Developing States. We must recall that the ICT sector is one of the few options for labour-intensive growth outside of agriculture. This sector is based on human creativity, and is fueled by highly-skilled, particularly young professionals, such as software engineers, entrepreneurs, developers, designers, web/

mobile technologists, change managers, project managers and internet and business strategists, among others.

The success of the Region’s entire diversification agenda is dependent on the widespread adoption and usage of ICT by the business community.

ITC: A PLATFORM FOR DIVERSIFICATION

BY ATIBA PHILLIPS Principal Consultant, INFOCOMM Technologies (ICT) Ltd

MANY DEVELOPING ECONOMIES HAVE TRADITIONALLY OPERATED IN THE PRODUCTION REALM BASED ON NATURAL ENDOWMENTS. THESE INDUSTRIES ARE MANY TIMES BASED ON NON-RENEWABLE NATURAL RESOURCES, WHICH WILL ONLY SUSTAIN THE ECONOMIES LINKED TO THEM FOR A FINITE PERIOD, AS TECHNOLOGIES ADVANCE AND RESERVES DWINDLE (PHILLIPS 2013).


DIVERSIFICATION

Businesses must be encouraged to embrace the internet as a competitive and productivity tool. Small businesses must be encouraged to become e-businesses and be given the tools to compete in arenas formerly considered the exclusive domain of Multi-nationals and big business.

e-Business, is not only about connecting businesses to customers or suppliers, but also about changing economic activity, making it more efficient, collaborative and innovative. It goes beyond the computerisation of business functions to actual transformation of the relationships along the value chain.

THE VISIONIf we get our ICT development strategies

right, it is expected that the ICT sector will grow significantly over the next five to ten year period building upon the success of the Regional connectivity programmes of the last decade. Domestic companies will be able to expand their global reach and new companies as well as entirely new industries can be built from the ground up.

Investor confidence will grow and thousands of new employment and entrepreneurial opportunities will be created in a wide variety of disciplines – not only in technology but in all sectors – particularly areas such as e-health, e-education, e-Agriculture, e-government and mobile applications. Both individual and business customers will expect domestic ICT-firms to offer a wide variety of competitive e-business services, competing globally with the international best-of-breed in identified strategically pursued niche segments.

Citizens will integrate ICTs into their way of life, as communicating and trading on-line (with other individuals, businesses and with the government) becomes more and more the norm among the rank and file of the population. In this way all citizens will be able to benefit from the flourishing Knowledge Based-Society and Economy.

This skilled and technologically comfortable citizenry will form the primary sourcing ground for business and public sector institutions operating in the Region. As this virtuous circle accelerates predicated on a platform of sound ICT infrastructure the foundation for a self-sustaining demand and supply cycle will be generated.

New skills, ideas and access to new sources of information and global markets will be generated, leading to new opportunities which will require entrepreneurship, innovation and institutional capacity building. This need in turn will create further opportunities for employment and demand for upgrading until the Region eventually becomes an exporter of ICT skills-training, ICT product development, and strategic ICT Business Consulting services.

THE REQUIREMENT FOR THE ROAD AHEAD

A World Bank report on Information and Communication for Development warns however that although ICTs present numerous benefits and advantages, it is a “disruptive technology that changes the ways bureaucracies organise and work, power is distributed or controlled and information is shared or protected”. The report further warns that the failure of ICT implementations can be attributed to a lack of astute leadership, and the human capacity necessary to leverage ICT for development strategies, and to integrate ICT investments with organisational process and skill changes.

It is therefore imperative that the Caribbean as a whole, get ICT implementation right. Successful ICT/ Knowledge-based diversification requires competent leaders and empowered institutions that are able to:

I. facilitate major transformational change;

II. overcome resistance to process and organisational changes;

III. prioritise and manage complex investments;

IV. change skills and mindsets;

V. coordinate across multiple agencies and project portfolios;

VI. leverage economies of scale; and

VII. maintain a long-term vision of transformation while insisting on concrete short-term results.

While the above list may seem imposing, many countries, both developed and developing have transcended these hurdles and have seen admirable economic success.

In India, in 2010, revenue from ICT sector incl. Business Process Outsourcing (BPO) was US$73.1 billion, representing 5.7% increase over the previous year. Out of this total, US$50.1 billion was attributed to exports and $23bn from the domestic market. The ICT sector was also responsible for 30% of incremental export during 2005-09; providing direct employment for the financial year 2009-10 - 2.3 million persons, and nearly 8 million people in ancillary industries; the agglomeration effect spreading the industry to the tier 2 and tier 3 cities.

In Kenya, the ICT sector grew at an average of 20% per year from 1999-2009, while Agriculture (its traditional sector) grew at only 2%. ICT accounted for roughly ¼ of Kenya’s GDP growth of 3.7% 2000-2010. Less ICTs, Kenya’s growth for the period would have stood at 2.8%.

In Antigua the completely Internet-based gaming industry is responsible for US$25 million in government revenue annually. In that country there is increased employment demand for engineers, web-designers and CSRs at competitive salaries.

In particular, for Trinidad and Tobago to drive the continued development and diversification of the economy, there must be a lead entity as well as a supportive institutional framework which is so empowered by statute, mandate and knowledge, which is charged with the attainment of the fourth and fifth pillars of development set out by the Government (i.e. Information and Communication Technology, and the establishment of a Knowledge-based Economy).

This would include driving a suite of legal enactments to enable a rapid transformation to an ICT enabled smart island as the alternative economy to the energy industry. Such an enabling environment and governance structures will be crucial to T&T in delivering on the promise of economic diversification and the attainment of a knowledge economy within this decade or the next.

FOR TRINIDAD AND TOBAGO THERE MUST BE A LEAD ENTITY AS WELL AS A SUPPORTIVE INSTITUTIONAL FRAMEWORK.


DIVERSIFICATION

The University of Trinidad and Tobago (UTT) actively seeks ways to foster the development of competent and adaptable graduates. These will form the human resource pool of the future, contributing positively to a rapidly changing, technology-driven knowledge economy.

UTT sees itself as an Entrepreneurial University. In 2004, it started out with essentially an engineering focus, geared principally towards producing the appropriate human resource needed to service the oil and gas sector. However, it was evident that there was urgent need to more closely align its training, research, development and innovation to the country’s growth poles. In keeping with this vision and mandate, UTT has been diversifying its programme offering to include the following:

The Performing Arts The Academy for the Performing Arts (APA) was established to offer viable career opportunities in the performing arts industry to aspiring playwrights, sound engineers, costume or lighting designers, recording artists, music or artistic directors and dancers. As part of the Music Service Outreach, musicians from the Academy have worked alongside such local musical entities as Birdsong Academy, St Augustine Chamber Orchestra (SACO), Arima Melodians and the National Sinfonia.

Fashion In the 2013 Budget Presentation Minister of Finance, Senator Larry Howai reflected that there must be a commitment to “the development of the performing and visual arts, the literary and fashion industries…to become world-class.” UTT’s Caribbean Academy of Fashion and Design (CAFD), established in 2008, is the first school of its kind in the region and is based on the philosophy of developing a student’s individual creativity. CAFD is continually engaging with the fashion community to support the world-class development of both the local and regional fashion sectors.

As an Entrepreneurial University, UTT has embarked on a significant attempt towards developing a "Savile Row" in Trinidad and Tobago. Graduates of CAFD are being mentored to launch their own Fashion Design Company

which the University expects will develop into an international brand. On June 16 and 17, 2014, UTT had the opportunity of collaborating with two Professors of the Fashion Institute of Technology, NYC - Jean Marc Rejaud and Luz Pascal, through a CAFD staged workshop ‘Fashion Beyond the Runway’.

This Workshop, part of UTT’s Fashion Week 2014, addressed such issues as “HOW FASHION BUSINESS STARTS” and “COMBINING TECHNICAL DESIGN AND PRODUCTION”, among others. The workshop explored key strategic marketing decisions that should be made for fashion products, as well as the effective promotional and marketing communications required for these products. UTT is cognizant of the impact that creative industries have on the culture and economy of Trinidad and Tobago and will continue to seek ways to highlight the excellent work done by its students and graduates as it works towards increasing access to the international market for our young and creative fashion designers.

Animation Described as an “Emerging Sector on the cusp of a 12% Growth Rate”, the local animation industry is a beneficiary of the creative talents of UTT’s faculty and students. The creative output from UTT’s Animation graduates, coupled with the driving input from its academic

UTT: PREPARING STUDENTS FOR A DIVERSIFIED ECONOMY

TIME TO GET GOING!

STUDENTS AT UTT RECEIVE AN ENTREPRENEURIAL UNIVERSITY EDUCATION TO BETTER PREPARE THEM FOR A NEW WORLD ECONOMIC ORDER.

continued on page 18

BY PROF. DYER NARINESINGH University of Trinidad and Tobago (UTT)


DIVERSIFICATION

staff, are positive contributions into a sector that has been described as a “sleeping giant” among the mainstream sector and industry activity in Trinidad and Tobago. The education and training provided by UTT in the sphere of animation is a catalyst that can only help to promote the sustainability of this dynamic industry. UTT has signed several memoranda of understanding with international stakeholders to propel its students and the local animation industry forward. To date, agreements for cross-collaborations have been signed with Sheridan College Institute of Technology and Advanced Learning, Canada and Toon Boom.

Maritime Trinidad and Tobago’s Maritime Industry has been earmarked as one of several priority sectors for development and investment building. Trinidad and Tobago has the potential to be the trans-shipment gateway to the Americas and, as such, the Maritime sector is an area of potential growth in our nation’s diversification thrust.

The growth of the Maritime sector requires trained personnel to operate in this expanding industry. As a part of the University’s drive to promote education and training in this important sector, three (3) undergraduate programmes are offered along with several short courses which are tailor-made to meet the requirements of this dynamic industry. These programmes: Diploma in Maritime Operations – Engineering Option, Diploma in Maritime Operations – Navigation Option and the Bachelor of Science in Nautical Science/Maritime Operations, are all accredited with the Institute of Marine Engineering, Science and Technology (IMarEST), in the United Kingdom. UTT’s maritime programmes are delivered at its Chaguaramas Campus, which is equipped with state-of-the-art full Mission Navigation and Engineering simulators, the first of their kind in the Southern Caribbean. These allow students a unique, hands-on experience in training that is on par with international standards.

As a result of the theoretical and practical training in the Maritime sector, UTT’s Maritime graduates can readily seek employment in the areas of port operation and management, maritime law and in the marine environment. The worldwide shortage of engineering and navigation officers also guarantee students

permanent employment opportunities in what is still an exciting career for young people in the Merchant Marine, and, for those entrepreneurially-minded graduates, they can also go on to create their own employment opportunities by harnessing their educational experience into lucrative future career paths.

Aviation Trinidad and Tobago can leverage its strategic location to become the gateway (air) between the African continent and the Americas. As a proactive provider of relevant education and training, UTT has commenced an Avionics Trainee Engineer Programme in close collaboration with its industry partners. The first cohort of fifteen (15) students graduated from this programme in March, 2014. Ten (10) of the graduates from the Avionics Trainee Engineer programme have also successfully written the X-Electrical examination, administered by the Trinidad and Tobago Civil Aviation Authority (TTCA), and have obtained their X-Electrical licenses.

The historic sod turning ceremony of its Aviation Campus at Camden in March, 2014 also signaled a significant advancement for local aviation training and education as three (3) Memoranda of Understanding were signed with international experts:

• Art Williams & Harry Wendt Aeronautical Engineering School

• AgustaWestland (AW) • Sikorsky Aircraft Corporation

Conclusion Notwithstanding these accomplishments, it must be acknowledged that the journey has only just started. Within the next year, UTT will officially open its Aviation Campus at Camden, start new Institutes for Finance, Printing and Packaging, fully operationalise the Ramleela and Steelpan Institutes and open its Signature Campus at Tamana. The realisation of UTT’s Tamana Campus (Campus of Innovation and Design) will significantly enhance its entrepreneurial mandate and indeed provide a unique space where the University can capitalise on key strategic areas of internationalisation, incubator development, technology commercialisation and new revenue generation opportunities. This will be done in close working relations with all local industry

partners including Technical and Vocational Education and Training (TVET) Institutions, the Council for Competitiveness and Innovation, the Caribbean Industrial Research Institute (CARIRI), Youth Business Trinidad and Tobago, Copyright Organisation of Trinidad and Tobago (COTT), Export Centres, the Trinidad and Tobago Coalition of Services Industries (TTCSI) and others. In this initiative, we will also be engaging our embassies and high commissions to strengthen our international alliances while partnering with some of the world’s top institutions from North America, Europe and Singapore.

The Tamana Campus will be an international hub for foreign students and staff – not only to study but also to design, create and invest. The over 720,000 square feet will not only provide student-spaces such as classrooms, laboratories and libraries, but also accommodate industry and startups as we seek to co-exist both within the campus and the wider Technology Park at Tamana. UTT will play a foundational role in this ecosystem. The University’s intense applied research agenda and entrepreneurial thrust will highlight the necessary synergy between industry and academia in such areas as sponsored research and the management of innovations and intellectual property.

UTT is a strong advocate of the Triple Helix concept which links academia to the needs of industry in practical and relevant ways. This relationship with government industry and community-based organisations creates a knowledge-based society capable of confidently confronting and solving its problems through professional education, research and development by actively engaging in education for employment, entrepreneurship and economic development.

These initiatives on the part of UTT and with strong support from the Ministry of Tertiary Education and Skills Training (MTEST) will assist the University in fulfilling its Mission, “to be an entrepreneurial university designed to discover and develop entrepreneurs, commercialise research and development and spawn companies for wealth generation and sustainable job creation…” As UTT celebrates its 10th anniversary in 2014, it continuously strives to be a beacon of education and training; both of which must redound to the benefit of the people of Trinidad and Tobago.

TIME TO GET GOING (CONTINUED ROM PAGE 16)

Fill your printing needs, with cpt!


DIVERSIFICATION

AMAZING OUTCOMES OCCUR WHEN THERE IS DIVERSITY! A LOOK AT OUR GDP SUGGESTS THAT TRINIDAD AND TOBAGO IS A RICH, ROBUST COUNTRY. THE REALITY IS THAT WE HAVE A STRONG PRIVATE SECTOR AND A WELL DEVELOPED GOVERNMENT SECTOR, BUT OUR SOCIAL SECTOR IS LAGGING FAR BEHIND.

BY DENNISE DEMMINGLead Consultant , Demming Communications

DIVERSIFYING THE SOCIAL SECTOR

The social sector can be seen as that non business, not-for-profit, philanthropic sector including Non Governmental Organisations (NGOs) and Community Based Organisations (CBOs) who cater to the needs of the underserved. Reflecting on what is needed in the social sector, I was reminded of a comment made by Peter F. Drucker in his book Managing the Non-Profit Organisation:

"The yield from the human resource really determines the organisation's performance. And that's decided by the basic people decisions: whom we hire and whom we fire; where we place people, and whom we promote. The quality of these human decisions largely determines whether the organisation is being

run seriously, whether its mission, its values, and its objectives are real and meaningful to people rather than just public relations and rhetoric."

IDENTIFY APPROPRIATE STAFFThe most critical decision any nonprofit can

make is the identification and selection of appropriate staff. This means changing the approach to employee selection. In every sector, business organisations recruit and rely on their staff to execute strategy. Excellent execution depends on the capacity and quality of the people you have engaged. Social sector organisations are no different, so particular attention must be paid to the recruitment process. Some issues for consideration in the next round of recruitment

are: what are the competencies needed in the particular individuals; how and where can the appropriate people be found; how can we screen for appropriateness of fit; what are the selection criteria; what is the hiring process; how will we orient new recruits; and what are the drivers of the compensation issues?

This list is identical to the simplified “things to do” list which a commercial organisation will check off before engaging any staff. If the social sector moves the needle on recruitment to a strategy based approach, we will have made a significant impact on the diversification thrust and therefore strengthen the three sectors of society.

WHAT A DIVERSIFIED SOCIAL SECTOR WOULD LOOK LIKE

Some interesting issues are likely to arise. What would a diversified social sector look like? How can we re-energise a sector which has historically been populated by “do-gooders,

What are the competencies needed in the particular individuals?

What are the selection criteria? What is the hiring process?

How can we screen for appropriateness of fit?

How and where can the appropriate people be found?

SOME ISSUES FOR CONSIDERATION IN YOUR NEXT ROUND OF RECRUITMENT SHOULD BE:

How will we orient new recruits? What are the drivers of the compensation issues?


DIVERSIFICATION

retirees and volunteers”? Traditional thinking about diversification pushes us to only consider the shifting of the economy away from the energy sector to other sectors like agriculture, manufacturing and tourism. That’s great, but my thoughts about diversification are about changing the profile of the social sector to one which is similar to any growing business enterprise taking on exciting challenges.

LOOK LIKE A BUSINESS, TALK LIKE A BUSINESSIn order for us to have a robust social sector and indeed fill the gaps

left by governments and the business sector, social sector organisations have to engage on an equal footing with governments and businesses. They have to be able to walk, talk and look like business. They have to be able to present a value proposition which is attractive to potential donors. It means that social sector organisations have to be resourced appropriately. If you can speak the language of your benefactors then you can communicate effectively and therefore increase your potential to get a positive response. While this concept may result in applying extreme pressure to the nonprofit sector the time has come to change the game. Diversification is now a matter of gaining market share.

THE LEADERSHIP QUESTIONAny conversation with a group of volunteers quickly drifts to

bemoaning the fact that corporate funding and support is reducing and it is difficult to get leadership time to tell the story. This is quite understandable since leadership time is at a premium and you must be able to attract the attention of the gatekeeper in order to get inside. This speaks to the issue of the quality of thinking at the leadership level of social sector organisations. Leaders speak to leaders. If you don’t attract attention at the level of leadership you will receive a negative response letter, advising that your current project is "not in alignment with our corporate strategy". Recently I looked at one of these letters and asked myself: How can a social sector organisation ever be aligned to your corporate strategy if you have not had a conversation? And why can’t you select a social organisation and have the conversation about what would it take for such an outsource to occur?

One of my favourite authors in this area of social sector is Dan Pallota who reminds us that:

“Our generation does not want its epitaph to read, "We kept charity overhead low." We want it to read that we changed the world, and that part of the way we did that was by changing the way we think about these things. So the next time you're looking at a charity, don't ask about the rate of their overhead. Ask about the scale of their dreams, their Apple-, Google-, Amazon-scale dreams, how they measure their progress toward those dreams, and what resources they need to make them come true regardless of what the overhead is?

“OUR GENERATION DOES NOT WANT ITS EPITAPH TO READ, "WE KEPT CHARITY OVERHEAD LOW." WE WANT IT TO READ THAT WE CHANGED THE WORLD!


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PERFORMANCE INDICATORS FOR ACHIEVING SUSTAINABLE DEVELOPMENT

BY DAVID D. RAMJOHNChief Executive Officer—Synergy Resources Limited

SUSTAINABLE DEVELOPMENT PATHWAY:GLOBAL DEVELOPMENTS AND REGIONAL AND INTERNATIONAL POLICIES RELATED TO SUSTAINABLE ECONOMIC DEVELOPMENT HIGHLIGHT THE IMPORTANCE OF ADOPTING SUITABLE STRATEGIES ON A NATIONAL SCALE TO REDUCE IMPACTS ON OUR ENVIRONMENT AS WE PURSUE ECONOMIC DEVELOPMENT FOR OUR CITIZENS.

The Government of the Republic of Trinidad and Tobago (GORTT) has recognised this challenge and has incorporated the ideals of the “triple bottom line” of environmental, social and economic benefits into its key strategic policies. These key policies include the Medium Term Policy Framework for 2011-2014 (MTPF) and the Sustainable Development Report, June 2012, both produced by the Ministry of Planning and Sustainable Development. Additionally, the country’s development must occur within the policy framework established by the National Environmental Policy, 2006 (NEP).

The GORTT has signaled its intention to chart a path for economic development that is low-carbon, resource-efficient and promotes participation in the “green economy”. The Sustainable Development Report describes a “green economy” as one in which “…growth in income and employment should be driven by public and private sector investments that reduce carbon emissions and pollution, enhance energy and resource efficiency, and prevent the loss of biodiversity and ecosystem services.”

MEASURING IMPACTSOne of the most well-known metrics often

used to illustrate the need for Trinidad and Tobago to take steps to correct its high-carbon pattern of production and consumption is its carbon dioxide (CO2) emissions per capita. Information from the Carbon Dioxide Information Analysis Center (CDIAC) of the United States Department of Energy ranks Trinidad and Tobago as second highest in the world (out of 216 countries) after Qatar based on 2010 statistics1. However, any scientist will tell you that CO2 emissions per capita is not a very useful metric, since it does not drive global warming that leads to climate change unless there is a direct correlation between per capita CO2 emissions and absolute emissions. In other words, high per capita CO2 emissions and high population equals major global warming impact.

One only has to look at China and India, both of whom rank well below 50 on a per capita CO2 basis to understand how skewed this particular metric can be. It is absolute emissions of CO2

1 http://cdiac.esd.ornl.gov/trends/emis/top2010.cap <accessed April 07, 2014>

per country that gives a better idea of impact and Trinidad and Tobago ranks 61 out of 216 countries in terms of absolute CO2 emissions. But these two measures of Trinidad and Tobago’s impact on the environment and achieving its sustainable development objectives pale into insignificance when compared to another more powerful metric: energy intensity.

ENERGY INTENSITYIn its simplest definition, energy intensity

measures the energy needed to produce one unit of economic output. In most international studies energy intensity is measured in terms of either joules, British Thermal Units (BTUs) or tonnes of oil equivalent (TOE) required to produce US$1 of Gross Domestic Product (GDP) at a benchmark year for Purchasing Power Parity (PPP), e.g. the value of the 2005 US dollar. Researchers Recalde and Ramos-Martin note that “the link between energy consumption and economic growth, as well as the relevance of energy flows for economic development, has been widely studied in the economic literature from both theoretical and empirical standpoints. Understanding this relationship is particularly important from both environmental and socio-economic viewpoints, as energy consumption is crucial to economic development and human environmental impact.



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Figure 1: Energy Intensity Top 10—Total Primary Energy Consumption per Dollar of GDP for 2011 (BTU per Year/2005 U.S. Dollars) at Market Exchange Rates (Note that T&T Ranks 2nd out of 90 countries) (http://knoema.com/EIAIES2014/international-energy-statistics-2014 <accessed April 01, 2014>)

Figure 2: T&T Energy intensity 2004-2011 (http://knoema.com/EIAIES2014/international-energy-statistics-2014 <accessed April 01, 2014>)

This is even more important in developing countries, since energy consumption per unit of output varies through the phases of development, increasing from an agricultural stage to an industrial one and then decreasing for certain service-based economies.”2

The European Environmental Agency (EEA) notes in its publication in February 2013 Total primary energy intensity (CSI 028/ENER

017) – Assessment that “Decoupling energy-consumption from economic growth can benefit the simultaneous achievement of economic and environmental goals. This indicator shows the development of energy-intensity (the ratio between gross inland energy consumption and GDP). Decoupling may result from reducing the demand for energy services (e.g. heating, lighting, passenger or freight transport), or by using energy in a more efficient way (thereby using less energy per unit of economic output), or a combination of the two. The indicator identifies the extent to which the decoupling between energy consumption and economic growth takes place. Relative decoupling occurs when energy consumption grows, but more slowly than gross domestic product. Absolute decoupling occurs when energy consumption is stable or falls while GDP grows. From an environmental point of view, overall impacts depend on the total amount of energy consumption and the fuels and technology used to generate the energy.”3

If we begin to examine Trinidad and Tobago’s energy intensity, then we will truly begin to understand how well we use our resources to achieve economic benefits while minimising environmental impact and creating social benefits for all. That is to say, we can then better understand our success or failure at achieving true “sustainable development”. The latest information available as published by the U.S. Energy Information Administration (USEIA) in its International Energy Statistics, 2014 ranks Trinidad and Tobago as the second highest energy intensive nation in the world, based on available data for 90 countries. Figure 1 below shows the ranking of countries on the basis of their energy intensity.

2 Recalde, M., Ramos-Martin, J. (2012): “Going beyond energy intensity to understand the energy metabolism of nations: The case of Argentina”, Energy, Vol. 37 (1): 122-132, http://dx.doi.org/10.1016/j.energy.2011.07.011 <accessed April 02, 2014>

3 European Environmental Agency (2013): “Total primary energy intensity (CSI 028/ENER 017) - Assessment published Feb 2013”. http://www.eea.europa.eu/data-and-maps/indicators/total-primary-energy-intensity-1/assessment <accessed April 04, 2014>

Perhaps more alarming than this single snapshot is the fact that Trinidad and Tobago has not been outside the top 10 in energy intensity ranking by the USEIA since 2005. Figure 2 below shows Trinidad and Tobago’s energy intensity over the period 2004-2011 and gives values in terms of BTUs required to generate US$1 worth of GDP.

CONCLUSIONUltimately, if we choose to adopt energy

intensity as one of the measures of our ability to achieve sustainable development, then we must carefully identify what data is required to meaningfully and accurately assess our energy intensity. We must develop appropriate key performance indicators and then determine how we collect and analyse the data that is required

to allow us to monitor these key performance indicators as we progress towards sustainable development. It is noteworthy that the GORTT’s National Performance Framework 2012-2015, which establishes the performance indicators for achieving “sustainable development”, makes no mention of energy intensity. The very nature of energy intensity makes it applicable across the five strategic priority areas identified by the GORTT in its MTPF and predisposes it as a cross-cutting measuring tool that can assess our progress to sustainability in a more holistic manner than any other single metric. Trinidad and Tobago must find ways to accurately monitor and reduce its energy intensity as a first step along the path to sustainable economic development, that being economic prosperity while minimising risk and impact to our environment and generating social benefits for all.

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2004 39,059.21

2005 42,125.91

2006 45,304.45

2007 43,400.46

2008 46,065.99

2009 45,306.45

2010 50,186.27

2011 49,173.35

Virgin Islands 59,181.62

Trinidad and Tobago 49,173.35

Netherlands Antilles 45,226.51

Russia 34,796.55

China 26,130.82

Saudi Arabia 22,202.44

Thailand 20,678.38

Oman 20,435.64

Djibouti 19,773.73

Pakistan 18.620.55

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PERFORMANCE INDICATORS (CONTINUED FROM P. 22)


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Other regional mechanisms provide indirect benefits to Trinidad and Tobago by exposing Trinidad and Tobago to the best practises and policies of other countries that could be explored and implemented in Trinidad and Tobago; one of these initiatives is Pathways to Prosperity in the Americas.

WHAT IS PATHWAYS?Pathways to Prosperity in the Americas

is a regional initiative that engages Western Hemisphere countries to share best practices and to collaborate to spread the benefits of economic growth and sustainable development more broadly to all member nations.

The initiative is open to all democratic countries in the hemisphere that are committed to open markets. It functions as a policy-level dialogue where countries learn from each another’s experiences to ensure that the benefits

of trade are more widely shared among member states through deepening economic ties and cooperation in the hemisphere.

WHO ARE THE PARTICIPANTS?Paticipants include Belize, Canada, Chile,

Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Mexico,

Nicaragua, Panama, Peru, Uruguay, Trinidad and Tobago and the United States; Brazil has observer status.

Regional organisations such as the Inter-American Development Bank (IDB), the Organisation of American States (OAS), and the Economic Commission for Latin America and the Caribbean (ECLAC) are strategic

Pathways partners.

Led by the Department of State of the United States of America, Pathways was launched by the leaders of twelve Western Hemisphere countries

in New York in September, 2008 at the Leader’s Conference, which was held at the United Nations General Assembly. The USA announced its commitment to the Pathways Initiative during the May 2009 meeting in El Salvador, when Secretary of State Hillary Clinton announced the Obama Administration’s intention to re-launch the Pathways initiative. This was reflected in October 2009 when the USA played host to the Pathways to Prosperity Women Entrepreneurs Conference, where the participants created a network to increase the access of women in the region to markets, finance and training to engender economic growth.

PATHWAYS TO PROSPERITY IN THE AMERICAS

TRINIDAD AND TOBAGO SEEKS TO BUILD A STRONGER DOMESTIC ECONOMY AND A PRODUCTIVE SOCIETY BY ENGAGING WITH ITS REGIONAL PARTNERS. SOME OF THESE PARTNERSHIPS PROVIDE DIRECT BENEFITS THROUGH ACCESS TO NEW MARKETS AND BY FACILITATING FOREIGN INVESTMENT TO TRINIDAD AND TOBAGO.

BY KIRK FRANCOISDirector, Hemispheric Integration Americas,

MInistry of Foreign Affairs of Trinidad and Tobago

DIVERSIFICATION

Empowering small businesses

Promoting sustainable business practices

Increasing opportunities for the citizenry

Facilitating trade

Building a modern workforcePromoting environmental cooperation


PATHWAYS OBJECTIVESAlthough the initial objective of Pathways was

to ensure that the benefits of trade are widely shared among member states through the deepening of economic ties and cooperation, conferences such as the one held in the USA have broadened the areas of discussion from trade to include areas of economic growth, prosperity and social inclusion. Through shared leadership, Pathways has identified four pillars that can deepen cooperation among member states as well as lead to wider development for each member. These are:

a) Empowering small businesses by building an enabling environment for micro, small, and medium-sized enterprises. This will increase opportunities for the citizenry, particularly to allow small businesses and farmers to take advantage of trade.

b) Facilitating trade by improving the systems, regulation, and infrastructure that small firms need to trade more competitively across borders. This will also assist in identifying ways to deepen hemispheric integration that complements efforts currently in place.

c) Building a modern workforce by supporting worker rights and fair labour standards as well as promoting the education and training, jobs and entrepreneurship that will prepare our citizens to achieve their full potential.

d) Promoting sustainable business practices and environmental cooperation. This involves cooperation on environmental issues in order to strengthen institutional capacity for enforcement and conserving biodiversity and sustainable management.

GOVERNANCEThrough a rotating Chairmanship among

members, each member of the Pathways to Prosperity in the Americas acts as Chair of the Pathways for one year before it is assumed by another member state.

The Government of Trinidad and Tobago is currently the Chair of Pathways to Prosperity for 2014. The Chair co-ordinates all events for the year by establishing a theme based on the four pillars and by guiding the dialogue and promoting the various projects in each member state based on the four pillars. The Chair also hosts a series of Working Group Meetings throughout the year which culminates in a Ministerial Meeting.

Previous Chairs have included Panama, El Salvador, Costa Rica, the Dominican Republic,

and Colombia. The government of Panama was the previous Chair to host the Pathways initiative and the Ministerial Meeting in 2013; Panama also hosted in conjunction with the Pathways, the Americas Competitiveness

Forum. Trinidad and Tobago is carded to host the Pathways in conjunction with the Americas Competitiveness Forum for 2014 over the period 8th -10th October, 2014.

TRINIDAD AND TOBAGO'S ROLE

As Chair of Pathways to Prosperity, Trinidad and Tobago has been mandated to present a theme for the event as well as to guide and to prepare the concepts for the Working Groups that will convene prior to the Ministerial Meeting to be held on 9th October, 2014. The theme created by Trinidad and Tobago is entitled “The Role of Human Imagination and Innovation in Work Force Development in empowering MSMEs”.

Trinidad and Tobago will use this theme to encourage member countries to share and to provide examples of how the use

of unconventional human imagination and innovation could provide solutions to existing problems as well as to develop the entrepreneurial spirit of the nation, especially for those employed in MSMEs. This theme has been introduced to the Working Groups, which have commenced in Washington D.C., and Trinidad and Tobago’s Embassy in Washington D.C. has presided over the first of these Working Groups, which was held on 26th February, 2014.

The Working Groups will be discussing and proposing imaginative ways and innovative methods of achieving results in the subthemes as identified by the four pillars. Each member state will be expected to provide examples of best practises emanating from their countries that have utilised human imagination and innovation and that have been successful. To this end, the Ministry of Foreign Affairs has reached out to various Ministries and private sector

organisations, such as the American Chamber of Commerce of Trinidad and Tobago (AmCham), to request information on projects that are currently being implemented that address areas of concern that fall within the four pillars for

development. Through this combined dialogue and sharing of information, member states can benefit from receiving information from like-minded countries that may be encountering similar challenges or difficulties.

The countries that have been able to find and implement innovative and imaginative solutions could then in turn share these practises with other Member countries. In this manner, the benefits of shared knowledge and experience expand to all the members in the region.

THROUGH THIS COMBINED DIALOGUE AND SHARING OF INFORMATION, MEMBER STATES CAN BENEFIT FROM RECEIVING INFORMATION FROM LIKE-MINDED COUNTRIES THAT MAY BE ENCOUNTERING SIMILAR CHALLENGES OR DIFFICULTIES.

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One definition of an Eco- Industrial park (EIP) by the Indigo Development Corporation Group (2006) is that it is a "network of firms and organisations working together to improve their environment and economic performance to create an industrial eco-system."

Other definitions summarise an EIP as a community of manufacturing and service businesses, seeking enhanced environmental and economic performance through collaboration in managing environmental and resource issues including energy, water and materials.

The Tobago House of Assembly (THA), in keeping with its comprehensive development plan for diversifying the economy and in the process to cushion any adverse impact of the

highly volatile tourism sector, was instrumental in establishing the Cove Eco Industrial and Business Park (CEIBP). The CEIBP and its management body, the Eco-Industrial Development Company of Tobago (E-IDCOT) have been given the primary role to foster entrepreneurship, eco-industrialisation and innovation in Tobago.

A STEP IN GREEN INDUSTRIALISMThe CEIBP is an integral part of a strategy

which is aligned with the overall philosophy of the island of Tobago of being “clean, green, safe and serene”. The creation of this park is viewed as the flagship design to future/similar business parks within Tobago. The park is equipped with all the utilities and amenities to enable businesses/investors to operate their preferred

business model. The available facilities include a natural gas plant set up by the National Gas Corporation of Trinidad and Tobago and a 64MW natural gas-operated electricity generating plant, operated by the Trinidad and Tobago Electricity Commission. The cost of energy at the CEIBP as in other parts of Trinidad is among the cheapest in the world.

FEATURES OF CEIBPThe design of the CEIBP conforms to that of

most of the existing eco-industrial parks around the world. It is lit only by solar powered lighting. All its facilities are underground.Systems are in place to recycle and reuse grey water.

The Park is located on 140 acres of land, of which 70 acres are divided into the following business clusters:

COVE PARK: GREEN INDUSTRIALISM AND INNOVATION IN TOBAGO

THE GROWTH IN ECO-INDUSTRIALISM GLOBALLY IS A STRATEGY FOR REDUCING THE CARBON FOOTPRINT AND IN PROMOTING SMART TECHNOLOGY INNOVATION. THE COVE ECO INDUSTRIAL AND BUSINESS PARK IN TOBAGO (CEIBP) IS ONE OF THE FIRST ECO-INDUSTRIAL PARKS WITHIN THE CARIBBEAN.

BY: CHERYL PHILLIPSEco-Industrial Development Company of Tobago (E-IDCOT)

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i. Manufacturing,ii. ICT/Knowledge/Innovation,iii. Agro and Wet Processing,iv. Export Processing Zones andv. Clean High Energy Zones.

The symbiotic sharing of by products within and among these clusters has been discussed in articles on Regional Wealth Creation and in the Institutional Analysis and Design Framework (IAD) as a key element for business growth. A recent international survey on eco-industrial parks 2014 by the World Bank predicts an increase in the GDP contribution of more than 40% by 2024-2029 attributed to EIPs.

RECENT CEIBP DEVELOPMENTSIn 2012, two factory shell units were

constructed, of which all tenant spaces have been allocated. The Park has actual land space available for investors seeking tenancy spaces and will be catering to the needs of small and medium enterprise with the construction of two (2) Multi-Purpose Units (MPUs). Each MPU has the capacity to accommodate 13 tenant spaces. The role of these MPUs is to provide interim space for the micro-sector businesses as they transition to become more mature/large business entities.

The CEIBP will also be liaising with those in close proximity to its operations as it also seeks to benefit adjoining communities by fostering smart community development initiated through engagement and ongoing support.

BENEFITS TO BUSINESSESThe key benefits to be derived by any business

wishing to locate at the CEIBP include:

• Immediate start of operations given the ready access to land and built space

• Low cost of startup and operations due to the low cost of energy, investment incentives and competitive rates for land and built space

• Access to a significant market given the established trade agreements that are in place

• Opportunities for customised investor incentives

Other benefits that would redound to the investor are the relative safety and quality of life in Tobago.

THE KEY OBJECTIVES OF E-IDCOT GOING FORWARD REVOLVE AROUND THE DEVELOPMENT OF THE ENTREPRENEURIAL CAPACITY AND BRINGING MEANINGFUL, EXPORT ORIENTED BUSINESSES AND INVESTMENTS TO THE COVE PARK AND TO TOBAGO IN GENERAL.

Formed in 2009, E-IDCOT is a limited liability company fully owned by the THA and falls under the Division of Finance and Enterprise Development. E-IDCOT’s core mandate is to assist in the transformation and diversification of the economy of Tobago.

In keeping with this, its strategic objectives are:

(1) To attract foreign investment from entities that subscribe to the quality standards which are ISO 14001 specific and

(2) To develop Community/Tobago based entrepreneurial projects to a stage of domestic sustainability and export readiness.

E-IDCOT’s corporate offices are located at the T. McLeod building at the Cove, Canoe Bay Road, Lowlands, Tobago.

The services provided by E-IDCOT include:

• Investor sourcing and facilitation - conducting targeted investor sourcing programs through varied media, agency collaborations and direct campaigns and supporting interests that result therefrom. This also includes the development of investment proposals and in seeking/negotiating investment interest with selected enterprises.

• One Stop Shop – Business, Virtual Office, Set up Assistance, Technical support and After Care Support for entrepreneurs and investors

• Consultancy and Advocacy services – engaging on-ground agencies (government, financial and similar agents such as Invest TT, Export TT, Business Dev. etc.) to promote the needs of investors thereby enhancing the Tobago value proposition to encourage foreign direct investment

• On-site responsiveness (Tenant Relationship Management) – directly addressing individual requirements and proactively improving the environment at the CEIBP

• Project Management – from project design to construction. Our project office handles a range of small, medium and large projects.

THE DEVELOPERS: E-IDCOT

THE DESIGNERS: GSAL DESIGNS LTD.

Trinidad-based Architects and Urban Planners GSAL Designs Limited (an AmCham T&T member) were the consultants responsible for the planning and design of the facilities at the Cove Eco Industrial and Business Park.


DIVERSIFICATION

Take a step back and imagine what would happen if you lost your job right now. Can you look for a new role? What if your new role doesn't exist or is less relevant? How would you reinvent yourself then?

Career diversification is all the rage and everyone seems to be waking up to the reality. Nowadays when you ask someone for their business card, they hand you 3 different cards: accountant, hair dresser and snake charmer! The individual is using the same rationale of diversification in any portfolio of assets, whereby they can minimise their risks in life and improve their

odds of coming out better if they spread their bets across various careers.

It used to be that people with this kind of career approach might be labeled a "jack of all trades, master of none," but not anymore. Today, if you don't have a side hustle or two, folks are giving you the side eye. People with this kind of mojo flow are called Multi-faceted Career Person. Generally when people hear the term, they would ask the question: how DO you DO all that you DO? When someone is asked the question, they would think about all the things on their to-do list which is generated from all

the hats they wear, and it would be obvious that their plate is very full. Despite the long list, a Multi-faceted Career person would rarely feel overwhelmed as they would have some method to juggling several career balls in the air. As a Multi-faceted Career woman myself, I would like to share 6 tips for being successful:

1. Follow your Passion - only invest in doing things that you have a passion for. Explore and pick up things that interests you

DIVERSIFY YOURSELF!

CHANGES ARE INEVITABLE IN LIFE, AND IT WILL HIT ANYONE BADLY IF THEY WERE TO REMAIN STATIC, OBSTINATE AND UNPREPARED. IN THE NEW ERA OF CHANGE IN WORK SPACE, ATTITUDE AND ORGANISATIONAL SETUP, THE LAST THING YOU SHOULD DO IS TO STICK TO THE SPECIALISATION MINDSET. YOU ARE NO LONGER AN ESSENTIAL COG IN THE WHEEL, AS MORE AND MORE ELEMENTS OF OUR WORK CAN BE REPLACED OR ENHANCED WITH TECHNOLOGY.

BY JANICE LEARMOND-CRIQUI Ideal Life Associate Certified Coach

THIS IS ME.I STUDIED FINANCE, AND WORKED AS A WAITER WHILE IN UNIVERSITY.

ME AS AN ACCOUNTANT.

ME AS A WAITER .

ME AS AN ACCOUNTANT.

ME AS A MANAGER .

ME AS A DRINKS IMPORTER .

SPREAD YOUR BETS OVER VARIOUS CAREERS


DIVERSIFY YOURSELF!

(doesn't have to be work relevant), as they keep you sane and make you who you are. It is important to continuously learn as it will hold you in good stead especially in tougher times. Doing what you love will be easy, fun and profitable. That way you don’t have to keep going to your boss for a raise.

2. Say NO - you can't do everything all the time at the same time. Reflect on your schedule and on what needs to be done over the next several months and make a choice.

3. Time Management - you can't talk the talk, and not walk the walk. Develop excellent time management skills. Create a system. Use your calendar and the technology that is readily available. If you are not into technology, then tie string on your fingers. Write things down. Write down your weekly goals and check them off as you complete them. If you need support, find a life coach.

4. Work Smart - don't execute tasks when you're in a negative energy state. Work when you're happiest and you'll get a lot more done in a lot less time. (this connects back to #1 - there must be passion for what you commit to).

5. Rely on your Intuition - only say yes to those ideas supported by your gut. If your gut says you should not touch something with a 10 foot pole, then DON'T do it. You’ll suffer less and you’ll be happier.

6. Diversify your personal network - This is not just networking for your career, but in general. Keeping in touch with existing friends from high school/university is great, but you also have to create opportunities to meet new people to keep things fresh. Select clubs, societies or activities of interest. Casual face-to-face chats among people with different skills may spark new ideas or solutions, so why not apply that same thinking to your personal network? Having a diversified network of friends and connections of different backgrounds (and maintaining such relationships) will increase your exposure to new ideas and thinking which can only do you good when the market changes.

This list is beneficial even if you only have one ball in the air. But, if your ambition is to add “tattoo artist” to your resume, which of the above six tips would trip you up? Maybe your time management skills amount to waiting until the last minute to hurry up and do something in 2 hours that should have taken you 2 days. If that’s you, don’t fret. The foundation for success always remains the same - focus on awareness and growth. Hopefully, something on this list makes you more aware of what you need to do and you can decide to grow and develop in that area. Trust me, you don't start out with all six of these tips under your belt, but over time you will learn to

strengthen those skills that were hindering you in your quest to be a Multi-faceted Career Person, and as a result you will even get an opportunity to take an occasional break!

THE FOUNDATION FOR SUCCESS ALWAYS REMAINS THE SAME - FOCUS ON AWARENESS AND GROWTH. HOPEFULLY, SOMETHING ON THIS LIST MAKES YOU MORE AWARE OF WHAT YOU NEED TO DO AND YOU CAN DECIDE TO GROW AND DEVELOP IN THAT AREA. TRUST ME, YOU DON'T START OUT WITH ALL SIX OF THESE TIPS UNDER YOUR BELT, BUT OVER TIME YOU WILL LEARN TO STRENGTHEN THOSE SKILLS THAT WERE HINDERING YOU IN YOUR QUEST TO BE A MULTI-FACETED CAREER PERSON, AND AS A RESULT YOU WILL EVEN GET AN OPPORTUNITY TO TAKE AN OCCASIONAL BREAK!

ME AND MY FAMILY TAKING AN OCCASIONAL BREAK!

DIVERSIFICATION

DIVERSIFICATION

z


DIVERSIFICATION

The rankings have been deteriorating in recent years. The Caribbean Industrial Research Institute (CARIRI) commissioned a diagnostic survey of selected large and medium size enterprises (LMEs) in Trinidad and Tobago in 2012. This survey was conducted to (a) assess LMEs' future fitness in terms of their innovation and competitive status and (b) to identify useful interventions to improve areas of weakness.

Future fitness refers to the preparedness of businesses to innovate, compete and thrive in tomorrow’s markets, rather than today’s marketplace. Many traditional sectors face a period of unprecedented change and businesses that are not prepared

for such change will struggle to remain viable.

This survey was conducted using a unique future fitness assessment tool, which required a senior executive in each company to rate his or her company in three specific focus areas within four overarching theme areas, as shown in the table.

Theme Area Focus Areas

Business Structure & Function

Business Model Strategic Planning Future Focus

Customers & Clients Demographics Life Styles Relevance

Marketing Avenues Values Liabilities

Sustainability Economic Social Environmental

31 LMEs from a range of sectors participated in the survey. They included seven companies in the Food and Beverage Sector, five in each of the Chemical and Manufacturing Sectors, three in the Information and Communications (ICT) Sector, two in each of the Distribution, Health and Wellness and Electrical Sectors; and five each in the Finance, Construction, Print and Retail Sectors.

Each participating business received a confidential future fitness assessment report to assist them in their decision making processes.

ARE T&T BUSINESSES FIT FOR THE FUTURE?

TRINIDAD AND TOBAGO RANKS POORLY IN TERMS OF BOTH THE GLOBAL INNOVATION INDEX (81 OUT OF 142 COUNTRIES IN 2013) AND GLOBAL COMPETITIVENESS INDEX (92 OUT OF 148 COUNTRIES IN 2014).

CARIRI SURVEY EXAMINES THREATS TO THE ‘FUTURE FITNESS’ OF SELECTED T&T BUSINESSES

BY IAN IVEYPrincipal at NEXT

DIVERSIFICATION

z


DIVERSIFICATION

The analysis of the survey identified areas where the majority of T&T LMEs were either facing moderate to high risks with regard to their future fitness as well as areas where the participants felt confident that they were moderately or highly fit.

The majority of participants identified numerous risks in five of the twelve Focus Areas within three of the four overarching Theme Areas (see diagram below).

In the ‘Business Structure and Function’ Theme Area, the businesses surveyed generally faced a number of risks in:

• the ‘Business Model’ Focus Area. The majority of respondents do not offer flexible working hours and options to work from home. Most have traditional, inflexible business models that require staff to be present at the company’s premises for a specified number of hours each working day. This is a high risk situation in a world where flexible business models are essential to cater to rapidly changing market situations and increasingly intense competition for skilled and talented staff. The majority were also at moderate risk due to their strong hierarchical business structures which make it difficult for people to use their own initiative; many were not strong on developing and managing mutually beneficial networks; their online presence was not well developed; they were not good at communicating their goals and strategies to staff and key stakeholders; and they did not have open information policies when it came to their customers, staff and key stakeholders.

• the ‘Strategic Planning’ Focus Area. Historical influences play a major part in most

LMEs' forward strategic planning. Relying too much on historical patterns can be a high risk strategy in a rapidly changing world. Eighty-seven percent of LMEs surveyed failed to engage their staff, customers and clients, and other key stakeholders in their strategic planning processes. The people who are key to their business success (or failure) are largely ignored when it comes to strategic planning. Other risks included encouraging a broad range of staff input into the strategic planning processes; not knowing where their products and services are in terms of their lifecycles; and not supporting a dialogue with key external stakeholders from a strategic perspective.

Several Focus Areas within the 'Customer and Clients' Theme Area were where the LMEs faced particularly high levels of risk. Most scored poorly in three of ten parameters in the ‘Demographics’ Focus Area, including understanding trends in birth and death rates (static/declining population growth); the number of households with children (declining and a minority in most countries today); and the age at which people are inheriting the wealth of previous generations (increasing). They were also at moderate risk in a further six of the ten categories including being aware if trends in the proportion of the overall population aged 20 years or less (declining); the trends in the proportion of the population aged over 45 years (increasing); trends in the age groups with the greatest amount of disposable income (older generations); trends in their customer/client age structure and whether they are an increasing or declining proportion of the overall population; trends in the relative importance of different ethnic groups; and

projected trends in population change in their main markets. Customer service in T&T is often unsatisfactory and reflects that lack of understanding, and desire to understand, the most important people for any business – those who buy a company’s products and services.

The fifth Focus Area where the LMEs faced numerous risks, ‘Economic’, was within the 'Sustainability' Theme Area. The majority of the businesses participating in the survey were at moderate risk in relation to six of the ten parameters - namely that they have challenges accessing the latest technologies and service back up to enhance their future fitness; their turnover and profitability have not increased in recent years and the future prospects do not look promising; capacity utilisation is low and the introduction of new higher technology based capacity to strengthen their future position is not being considered; they do have access to the right types of R&D infrastructure and services that will help them develop new competitive leading edge products and services; they suffer from low labour productivity; and having modern ICT technologies and systems has not been a priority.

What is particularly interesting about these diagnostic survey responses is that they have been generated by top level executives and business owners in 31 of T&T’s LMEs. They have identified an extensive range of high and moderate risk areas that help explain at least part of the reason why the country ranks poorly in global competitiveness and innovation indices. These particular survey outcomes resulted in almost two thirds of the participating businesses taking actions to improve their ‘future fitness’.

AREAS OF GREATEST RISKBusiness Structure & Function Customer & Clients Sustainability

A1: Business Model

Hi RiskHi Risk

Hi RiskHi Risk

Mod Risk Mod Risk

Mod RiskMod Risk

Mod Risk

Mod ‘Fit’

Mod ‘Fit’

Mod ‘Fit’ Mod ‘Fit’

Mod ‘Fit’

Very‘Fit’ Very‘Fit’

Understanding keydemographic factors

Longer term economicsustainability of the business

Understanding keylife style factors

Approach being taken to Strategic Planning

The type of businessmodel being used

A2: Strategic Planning B1: Demographics B2: Life Styles C1: Economic


T H O U G H T L E A D E R S H I P

RESILIENCE IN A HOTTER WORLD

Pivot Strategy: A New Framework

Companies in the vanguard are beginning to make what I call “the big pivot.” This represents a profound change in strategy, operations, and business philosophy that will make organisations more resilient and help them create new value in a hotter, resource-scarce world. As I’ll discuss in detail, pivoting requires companies to take radically different approaches to how they craft their vision, define value, and form partnerships.

Companies that embrace pivot strategies will be better able to thrive in the face of extreme, unpredictable “black swan” events, such as rapid shifts in input availability or record storms like Hurricane Sandy and Typhoon Haiyan. The one thing we know for sure is that such events will happen. And as the uncertainty expert Nassim Taleb argues in his book Antifragile, the best systems help organisations not only survive the unpredictable but get stronger.

By making dramatic improvements in operational efficiency and cuts in material and energy use, waste, and carbon emissions, companies become much more flexible and, possibly, antifragile. This discipline increases a firm’s cost and risk resilience: Companies that rely on fewer resources will be more competitive in a world of declining availability and higher

prices. Organisations that minimise energy use and generate their own power from renewable sources can operate more reliably if the electrical grid falters. An executive at Walmart, for instance, has pointed out that the retailer’s commitment to increase its already sizable use of onsite renewable energy 600% by 2020 will help keep its “stores up and running no matter how bad the weather is or who else might be shut down.”

Pivoting also increases what I call revenue resilience, providing protection against volatility in demand. As all customers begin to deal with climate change and resource scarcity, their expectations will change. By adapting and innovating to fulfill customers’ new needs, companies can ensure that sales remain steady or increase. Businesses that create products and services for a cleaner, more “circular” economy-one that virtually eliminates waste and keeps precious resources in productive use indefinitely-will tap into a massive, growing market. As customers strengthen their own resilience by lowering their costs, risks, and resource dependency, multi-trillion-dollar markets in construction, energy, consumer products, transportation, and other sectors will all be in play.

Companies that understand how climate change and resource scarcity affect their full value chain-from raw materials to product recycling-will

WILD WEATHER IS TAKING A TOLL ON PEOPLE AND BUSINESSES AROUND THE GLOBE

be better positioned to maintain or grow market share. They also will be able to address society’s largest challenges and build a more prosperous world for all.

The following framework can help companies improve performance, increase resilience, and advance the common good-which they benefit from as well. In total, these strategies help companies pivot from maximizing short-term earnings first (while treating environmental and social challenges as niche issues), to operating in a way that makes tackling the world’s biggest problems the first priority and then leverages the tools of capitalism-like markets and competition-to do so profitably.

Vision: Asking Heretical Questions

Climate change and resource constraints do affect companies in the short term, of course, but proactively tackling them in earnest (rather than just responding to their impact) is not a quarterly exercise. Innovation and adaptation are long-term activities, and maintaining a three-month horizon inhibits the creativity and investment needed to build resilience.

To confront short-termism-or develop any sound long-term strategy, for that matter-you must ask what I call “heretical questions.” These challenge the way things are normally done within any function and at any scale, from the firm’s business model down to specific operations.

UPS asked: “Can we cut fuel costs by avoiding left turns?” Today UPS uses routing technologies and strategies, including skipping those left turns, to reduce miles driven and wasteful idling, saving 8.4 million gallons of fuel a year.

FROM HARVARD BUSINESS REVIEW© 2014 Harvard Business School Publishing Corp.

I’VE SPENT MORE THAN A DECADE STUDYING AND ADVISING MANY OF THE WORLD’S LARGEST COMPANIES, EXPLORING HOW THEY DEAL WITH ENVIRONMENTAL AND SOCIAL PRESSURES. SO FAR, I’VE SEEN COMPANIES PURSUE MOSTLY INCREMENTAL IMPROVEMENTS IN ENVIRONMENTAL PERFORMANCE WITH EASILY JUSTIFIED PROJECTS THAT DELIVER QUICK PAYBACKS, SUCH AS ENERGY-EFFICIENCY INITIATIVES. IT’S TIME TO MOVE BEYOND SUCH TABLE STAKES, HOWEVER. AN EXTREME WORLD CALLS FOR EXTREME CHANGE.

All statements of fact or expression of opinion contained in this publication are the responsibility of the author.


T H O U G H T L E A D E R S H I P ( C O N T I N U E D )

Adidas and Nike asked whether it would be possible to dye clothes without using any water. Both companies have identified technologies that accomplish that goal.

Kimberly-Clark asked: “Do paper towel and toilet paper rolls really need cardboard tubes?” The company has since developed tubeless rolls.

Some companies are pursuing “reverse innovation,” which turns conventional product development on its head. To meet the needs of emerging markets, these firms create low-cost products that require less material or use less energy. GE came out with one such innovation, a portable electrocardiograph for the Indian and Chinese markets, and then sold it in the United States for 80% less than similar products.

The innovation that results from heretical questions builds more resilient companies. If water becomes scarce, Adidas and Nike factories using waterless technologies can still operate. Higher pulp prices will not affect the cost structure of Kimberly-Clark’s tubeless products as much as rival offerings’. Companies that reverse-innovate more affordable products compete more effectively in all global markets.

Valuation: Making Better Investment Decisions

Managers regularly decide where to invest human, financial, and capital assets to reap the highest returns, using well-known tools, such as measures of return on investment. Those tools help organisations maximise whatever they value most-usually earnings. But the tools are only as good as the information that goes into them. The calculations require estimating both inputs and outputs. Many things that can create (or destroy) value either don’t have a price or are not included in the calculations. These items fall into two buckets: (1) what economists call externalities, or benefits or costs incurred outside the company, and (2) everything else that indirectly drives profits and value within the company but cannot be measured easily.

Externalities include pollution and damage to natural resources on the negative side of the ledger, and everything a company does for society but doesn’t get paid for, like job and wealth creation, on the positive side. At the same time, nature provides society and business many services that go unpriced in the marketplace, including clean air and water, a relatively stable climate, plants and animals to use for food and medicine,

and much more. These assets are called natural capital, and businesses mostly ignore their value.

Basic economics predicts that when the value of a resource is unmeasured, businesses will systematically underinvest in protecting it. Or worse, when a valuable resource costs nothing, it will be consumed aggressively and can abruptly become scarce. Consider the way the global economy is using the atmosphere as a free carbon dump. It’s promising, however, that companies like Dow Chemical and Puma are now attempting, along with partners such as the Nature Conservancy, Trucost, and PwC, to assess how natural systems create value for their businesses. But for now it’s hard for most firms to justify spending time and money managing externalities. More pertinent to day-to-day operations are the indirect and unpriced value creators (or destroyers), often given the shorthand “intangibles.” Woefully underappreciated, these include the ability to attract and retain talent; support from the community and the license to operate from society; reduced risk and enhanced resilience; customer loyalty; and all brand equity. A firm’s environmental and social performance can enhance or diminish all these assets. And while they’re mainly off the books, they now account for the majority of corporate market capitalisations.

Because ROI tools calculate only the returns that companies can easily put a number on (typically, cash payoffs), they discourage investments in things that create harder-to-measure, indirect benefits. Take capital outlays for onsite renewable energy projects that may not deliver a payback fast enough to meet internal hurdle rates. These initiatives won’t get funded, and companies will forfeit all the cost-resiliency benefits of reducing dependence on expensive fuels or on the grid. Traditional tools also overlook indirect costs. Consider a natural capital example: Dredging and developing coastal wetlands makes sense as a real estate investment, but only because the flood protection that the lands provide is priced at zero. Their loss undermines resiliency by making all coastal assets, from refineries to homes, more vulnerable to extreme weather. If that cost were valued, it would greatly reduce the ROI of developing the land.

Companies need methods to gauge the value of the longer-term and indirect benefits of investment decisions. Such tools are now being adapted from industries that place bets further out, like pharmaceuticals and utilities, and applied to environmental and social initiatives. While those

methods are evolving, managers can still modify how ROI is currently calculated to better reflect value that is unmeasured but that they know is not zero.

Some companies, such as 3M, IKEA, and Intel, simply lower the hurdle rate for investments in areas like pollution prevention, renewable energy, and green buildings. Others dedicate a portion of the capital expense budget to green investments: Johnson & Johnson allocates $40 million annually solely to energy and greenhouse-gas-reduction projects.

Another method, which GE and Diversey (the cleaning products division of Sealed Air) have used, is to create a portfolio of efficiency projects. Some initiatives, such as energy-related projects, are quick wins and easily meet the internal hurdle rate, while others take longer to pay off. But in aggregate, the projects meet the hurdle rate. It’s similar to a basket of equities in your 401(k)-your account may beat the market, but not every stock you own will.

Finally, some companies are getting ahead of the regulators and putting prices on the unvalued themselves. According to the New York Times, the Carbon Disclosure Project recently reported that 29 of the world’s biggest companies are incorporating prices on carbon emissions into their long-term financial plans. Most use so-called “shadow prices,” which exist only in spreadsheets, to estimate investment returns over time in a world where carbon will cost real money. Anticipating that carbon will be priced at some point, these companies are helping managers see the risks inherent in long-term investments-like coal plants-that may suddenly become much less valuable or turn into liabilities. A small subset of the 29 companies, including Microsoft and Disney, even charge their divisions real fees for every ton of carbon emitted by their operations. They then invest the collected funds in energy-efficiency or carefully selected carbon offset projects, like reforestation.

None of these methods for valuing hard-to-measure benefits is surprising. Companies have long made significant investments without an exact ROI calculation in areas such as R&D and marketing and when entering new regions. What’s new is that this mind-set is being applied to initiatives that address environmental and social challenges-projects that have always faced harsh internal scrutiny.



BY DAREN DHORAYCyber Safe Trinidad and Tobago

When however, do we draw the line, or do we even know how too? That seems to be the problem we face with the proliferation of technology and easy to use apps which in just one snap and two clicks, we expose what used to be our deepest thoughts and innermost secrets. Instead, it is posted out there for the world to see; and guess what, the world is watching.

With over 450,000 Facebook user accounts registered with the residing country as Trinidad and Tobago1, it is safe to say that we cannot get away from online social interactivity or pretend that it does not exist. At some point you will have to contribute to this expanding virtual universe that is Cyber Space. As employers, we

1 TATT Digital Divide Survey 2013

would like to put an end to this black hole of productivity but that same environment can be the lead to generating the next business deal or attracting the best employee for the job.

We must therefore understand the pros and cons of maneuvering in Cyber Space and use this to our organisation’s advantage. Here are some helpful hints that should help you along this journey:

As an employer many of us love to hate social media. The Washington Post2 reported that in 2011 Facebook cost some $28 billion a year in workplace productivity. And while it was in its most popular stage, the highly addictive Angry Birds game caused another $1.5

2 h t t p : / / w w w. w a s h i n g t o n p o s t . c o m / b l o g s / w o n k b l o g /wp/2013/07/06/here-are-all-the-things-that-supposedly-cost-the-u-s-billions-in-lost-productivity/

billion. On the other side of the coin, however, Facebook’s IPO currently stands at $16 billion3 with a net worth of over US$100 billion and in 2013, gamers spent more than US$1.5 billion4 in games on Facebook alone. Facebook and by extension Social Media has everything to do about business as much as it doesn’t. What can you do to make it work for you?

The first thing to do is own your online presence, before someone else does. Whether you intend to hire a full time social media analyst to update your blogs, feeds and posts or have an employee post product specials and the latest company news every month, your first step is to get connected. That does not mean you have to register with the myriads of social media platforms that exist, just choose the ones that work for you.

Next, you may want to manage social media use at the office by developing a social media policy that clearly outlines the appropriate use of social media in the workplace. Most (if not all) of your employees already have their own Facebook profile and smart phones. In this age of “bring

your own device” to work, even if you block social sites on the company’s network and you’re planning on moving the office to the Gasparee Caves, where the Internet coverage and cell reception is far from the days of dial-up, there isn’t much you can do about smart phone/device usage. There is already a pre-existing network of networks in your office with your employees and their online connections (friends). So set up your LinkedIn, Facebook page or Twitter accounts and invite your employees to join in.

3 http://www.nasdaq.com/markets/ipos/company/facebook-inc-673740-69138

4 http://games.on.net/2013/11/facebook-games-revenue-up-18/

SOCIAL MEDIA AND THE WORKPLACE

SOCIAL MEDIA HAS BECOME SYNONYMOUS WITH INTERNET USAGE. SOME PEOPLE EVEN BELIEVE THAT FACEBOOK IS ‘THE INTERNET’. WHETHER WE LIKE IT OR NOT, FACEBOOK, TWITTER, INSTAGRAM PLUS MANY OTHER SOCIAL APPLICATIONS HAVE BECOME AN INTEGRAL PART OF OUR DAILY LIVES. WHETHER IT IS AT HOME OR AT THE WORK PLACE, THESE APPS ARE PLAYING A ROLE AND SOMETIMES DEFINING WHO WE ARE AND HOW WE DO WHAT WE DO. WE ARE SHARING EVERYTHING ONLINE, THE BEAUTIFUL YELLOW POUI TREE ON THE HIGHWAY TO THE FIVE CAR SMASH UP; FROM OUR BABY’S FIRST STEPS AND EVERYTHING IN BETWEEN UP UNTIL SHE GRADUATES FROM UNIVERSITY AND WALK DOWN THE AISLE!

BUSINESS TIPS

FOSTERING COMPUTER LITERACY — OR CREATING AN UNPRODUCTIVE GENERATION OF TIME WASTERS?


Once you include social media as part of your marketing strategy, be clear on who is authorised to speak on behalf of the business online. Training will be important, especially when it comes to dealing with negative comments and feedback. At some point, you should explore services offered at openDNS.com, which can be set up by your IT team, to help monitor, track and even block sites depending on the situation at hand. Additionally, tools such as Google Alerts5 can email you once your company’s name shows up on the web. It’s free and it works!

As employees, on the other hand you need to manage your online reputation more than ever before. As we become more liberal with what we post, we often let our guard down and let our emotions do the posting, which can become your worst nightmare when applying for that new job for example. As much as you might want to forget that drunken night with friends, the Internet isn’t that forgiving.

5 http://www.google.com/alerts

As individuals, you should Google your name on a periodic basis. If you are a public figure at any level, you can also set up Google Alerts for your name to be notified by email whenever it appears on the web.

Next, you need to decide how you are going to use the various social media platforms out there. You may want to keep LinkedIn strictly professional and updated with employment and educational information while your Facebook and Instagram accounts can remain personal. Twitter still holds a balance between personal and professional and you may want to decide how this is approached. In the end, the distinction should be made about what is personal and what is professional.

Find out if there is a social media policy for your work place and know and understand the terms of use. Remember you don’t need to be caught in the act as all social media activity has a timestamp associated with it so be aware of what you post and when.

Once you do get involved with multiple platforms, ensure that you are aware of their privacy settings. Do a dry run to see what a member of the general public can find out about you without being ‘friends’. You can then adjust the privacy settings based on your findings.

Finally, think before you post. Do not let emotions get the better of you. A heated argument in the conference room can be contained and forgotten but a negative post can be shared with hundreds within seconds and will remain online forever.

As our addiction to the internet grows exponentially and the trend continues to incorporate the virtual cyber space in our organisation and personal lives, social media at some point will play a role in each of our lives. Rather than letting it overwhelm you, learn about it and embrace it, the Internet of everything is here… smart phones, smart appliances, smart homes, smart cars, smart watches and the list goes on.

BUSINESS TIPS


WHAT IS CSR?The President and Fellows of Harvard University

(2008) define Corporate Social Responsibility (CSR) as encompassing how companies obtain their profits and how they make them. It goes beyond philanthropy and compliance and addresses how companies manage their economic, social, and environmental impacts, as well as their relationships in all key spheres of influence; the workplace, the marketplace, the supply chain, the community, and the public policy realm.

BY DEBORAH MAHARAJ-NEWLINGProfessional Institute of Marketing and Business Studies

EVERYBODY TALKS ABOUT CSR, BUT LET'S BE FRANK—HOW MANY OF US REALLY KNOW THE INS & OUTS OF IT? OR EVEN WHERE TO LOOK THINGS UP? HERE'S HELP!

HOW MANY DEFINITIONS ARE THERE FOR CSR?

There are several definitions. The table below presents selected theoretical papers on CSR and their perspectives by arguments.

SHOULD ALL COMPANIES HAVE A CSR PROGRAMME?

Internationally, studies have shown that companies who “behave responsibly toward the

environment experience a significant stock price

increase, whereas firms that behave irresponsibly

face a significant decrease.” (Mc Williams et al. 2006). Interestingly however, in Trinidad and Tobago, there are a limited number of companies that trade on the stock exchange. Recently, The Trinidad and Tobago Chamber of Industry and Commerce, Trinidad and Tobago Stock Exchange and the recently formed Caribbean Corporate Governance Institute have come together to lead a project to develop the Trinidad and Tobago Corporate Governance Code so that small and medium enterprises (SMEs) in Trinidad and Tobago could get themselves ready to trade on the stock exchange. However, recent

TABLE I. SELECTED THEORETICAL PAPERS ON CSR

Author(s)Nature of theoretical

perspective(s)Key argument/result

Friedman (1970) Agency theory CSR is indicative of self-serving behaviour on the part of managers, and thus, reduces shareholder wealth

Freeman (1984) Stakeholder theory Managers should tailor their policies to satisfy numerous constituents, not just shareholders. These stakeholders include workers, customers, suppliers, and community organisations

Donaldson and Davis (1991) Stewardship theory There is a moral imperative for managers to ‘do the right thing’, without regard to how such decisions affect firm performance

Donaldson and Preston (1995) Stakeholder theory Stresses the moral and ethical dimensions of stakeholder theory, as well as the business case for engaging in CSR

Jones (1995) Stakeholder theory Firms involved in repeated transactions with stakeholders on the basis of trust and cooperation have an incentive to be honest and ethical, since such behaviour is beneficial to the firm

Hart (1995) Resource-based view of the firm

For certain companies, environmental social responsibility can constitute a resource or capability that leads to a sustained competitive advantage

Jennings and Zandbergen (1995) Institutional theory Institutions play an important role in shaping the consensus within a firm regarding the establishment of an ‘ecologically sustainable’ organisation

Baron (2001) Theory of the firm The use of CSR to attract socially responsible consumers is referred to as strategic CSR, in the sense that firms provide a public good in conjunction with their marketing/business strategy

Feddersen and Gilligan (2001) Theory of the firm Activists and NGOs can play an important role in reducing information asymmetry with respect to CSR on the part of consumers

McWilliams and Siegel (2001) Theory of the firm Presents a supply/demand perspective on CSR, which implies that the firm’s ideal level of CSR can be determined by cost-benefit analysis

McWilliams et al. (2002) Resource-based view of the firm

CSR strategies, when supported by political strategies, can be used to create sustainable competitive advantage firm

Waldman et al. (2004) Theory of the firm/strategic leadership

Certain aspects of CEO leadership can affect the propensity of firms to engage in CSR. Companies run by intellectually stimulating CEOs do more strategic CSR than comparable firms theory

THE INS & OUTS OF CSR

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research (Paul and Newling, 2013) has indicated that the practicality of SMEs implementing these measures may have its challenges. So the issue of share increase may not be attractive to many companies and hence the implementation of a CSR programme may not be attractive to this market.

There is tangible evidence that CSR has been profitable to many companies. For example, Coca-Cola has increased its sales, by implementing new eKOfreshment coolers, vending machines and soda fountains that are more environmentally friendly. By eliminating the use of hydrofluorocarbons the innovation increased energy efficiency by up to 35 percent. The company highlighted this benefit to its retailers, especially the financial savings from energy efficiency, and in return, Coca Cola benefitted from getting prime space in their outlets.

Dow Chemicals has also used innovation to achieve breakthroughs in four areas: an affordable and adequate food supply, decent housing, sustainable water supplies and improved

personal health and safety. The company has already made progress in its Breakthroughs to World Challenges initiative, by utilising its understanding of plastics and water purification to supplement its venture capital investment and loan guarantee support to a social entrepreneur in India who has developed an inexpensive community-based water filtration system. The initiative’s ultimate goal is a new business model to sell new products at a reasonable price, meeting social needs, while contributing to Dow’s bottom line. (Mc Kinsey Quarterly, Feb. 2009). These examples show tangible and financial rewards to businesses that engage in Corporate Social Responsibility.

SHOULD CSR BE SOMETHING SPECIAL OR A MATTER OF COURSE?

The International Organisation for Standardisation's strategic advisory group on CSR describes it as “a balanced approach for organisations to address economic, social and environmental issues in a way that aims to benefit people, communities and society.”

CSR activities impact on a wide range of organisational activities including:

¥ Reducing and limiting litigation – Recently, pollution issues affected a major local oil company. Their good corporate reputation and excellent exhibition of Corporate Social Responsibility, resulted in minimising the effect on this company.

¥ Protecting brand image – West Indian Tobacco Company is the main producer of cigarettes in CARICOM. They more than doubled their net profits between 2007 and 2012 despite challenges in the regional economy, high commodity prices internationally and an increasingly aggressive anti-smoking lobby (Trinidad Guardian, 2012). This was achieved through implementing environmental measures and restating property values on the balance sheet.

¥ Improving consumer satisfaction – Telefonica developed a new product to serve customers over the age of 60. To

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THE INS & OUTS OF CSR (CONTINUED FROM PAGE 39)

A COMPANY SHOULD DEVELOP A CORPORATE SOCIAL RESPONSIBILITY PROGRAMME AS A MATTER OF STANDARD BUSINESS PRACTICE.

help overcome what the company calls a “knowledge barrier”, it has collaborated with associations of older people in an effort to teach them to communicate with their grandchildren living abroad. The company meets a social need by helping this population use modern technologies and services while building a customer base

in an underpenetrated market. The result is greater sales and more loyal customers.

¥ Reducing absenteeism and employee turnover and increasing the ability to retain talented employees In 2006, Best Buy launched the Women’s Leadership Forum (WoLF) in an effort to reduce employee turnover, particularly amongst

women. The activity encouraged women to participate in company innovation. The net effect of this was an enhanced customer experience for women by the employees altering the look and feel of the Best Buy stores and modifying their product assortment – having significant effect on boosting sales to women without decreasing sales to men. Within the first two years, the employee turnover amongst women decreased by more than 5 % annually.

IS IMPLEMENTING CSR WORTH IT?The overwhelming answer to this question is

“Yes”. A company should develop a corporate social responsibility programme as a matter of standard business practice.


Perhaps most startling of all, in 2013, the United States produced more oil and gas combined than any other nation on earth, ahead of both Russia and Saudi Arabia (see chart below). All of the above makes it abundantly clear that the United States is in the midst of an energy revolution. However, this revolution is taking place elsewhere in the Americas as well.

CANADA

Canada’s proven oil reserves of 173 billion barrels are the third largest in the world after Venezuela’s and Saudi Arabia’s reserves. Oil production started to grow rapidly in Canada beginning in 2007, as the chart below from the Canadian National Energy Board indicates. Oil sands production from Alberta province began adding significantly to production in 2011. The latest data show that in 2014, oil production will exceed 4 million barrels per day. According to the EIA’s most recent “International Energy Outlook,” Canadian production is projected to grow to 6.6 million barrels per day by 2035, due largely to increased production from the oil sands.

The EIA also reports that Canada ranks third in natural-gas production and is the fourth-largest exporter of natural gas, behind Russia, Norway and Qatar. Overall, Canada is the world’s sixth largest crude oil producer and also the largest crude oil and petroleum products supplier to the United States.

Led by Canada and the United States, the Western Hemisphere has the potential to become both energy self-sufficient and a world-class exporter of oil and gas. The key factor in this energy revolution has been the advance in technology. New technologies, coupled with ever more powerful computers, have unlocked billions of barrels of oil and trillions of cubic feet of gas trapped in shale formations in North and South America, as well as the oil sands of Canada and Venezuela. The heavy and extra-heavy oil in these latter two countries constitute the largest oil deposits in the world.

Ten years ago few thought it possible to profitably produce shale oil. Today, billions of dollars are being invested in its production. Since 2010, North Dakota's crude production has surged 177%, and as shown in the following chart, in 2014 the state’s Bakken shale region produced its 3 billionth barrel of oil, mostly from shale.

North Dakota is not the only state to see a dramatic surge in oil and gas production. In Texas, oil production alone has grown 119% since 2010. According to the U.S. Energy Information Agency (EIA), Texas produced an average of over 2.9 million barrels per day of oil in the first quarter of 2014, making it the eighth largest producer of oil in the world, just ahead of the United Arab Emirates (UAE) and Kuwait.

In its June 2014 “Short-term Energy Outlook,” the EIA predicted U.S. crude oil production would average 8.5 million barrels per day this year and 9.3 million barrels per day in 2015, the highest level since 1972. This is two million barrels more than the 2013 average of 7.4 million barrels per day.

THE GLOBALISATION OF THE WESTERN HEMISPHERE ENERGY REVOLUTION

BY EDWARD GLABProfessor of International and Public Affairs, and Director of the Global Energy Security Forum, in the School of International and Public Affairs (SIPA), at Florida International University in Miami. Previously, he worked for ExxonMobil for more than 25 years, holding positions in public affairs, business development, media relations and emergency response, among others. Dr. Glab has consulted for numerous government agencies, international organisations and the private sector on energy, political risk and emergency response.

PERSPECTIVES ON THE AMERICASA Series of Opinion Pieces by Leading Commentators on the Region

THE WESTERN HEMISPHERE IS THE DRIVING FORCE BEHIND A TECTONIC UPHEAVAL IN GLOBAL ENERGY. DRIVEN LARGELY BY NEW TECHNOLOGY, OVER THE PAST SEVERAL YEARS THE AMERICAS, FROM CANADA TO ARGENTINA, HAVE BEEN UNDERGOING A DRAMATIC INCREASE IN THE DISCOVERY AND PRODUCTION OF OIL AND GAS. THIS HAS PROFOUND GEOPOLITICAL, ECONOMIC AND NATIONAL SECURITY IMPLICATIONS FOR THE ENTIRE WORLD THAT COULD ULTIMATELY PROVE TO BE AS SIGNIFICANT AS ANY DEVELOPMENT IN THE FOSSIL FUELS AREA SINCE THE DAWN OF THE OIL AGE 155 YEARS AGO.


2011-2014/151989-20111951-1989

1 billionth barrel 2 billionth barrel 3 billionth barrel

NORTH DAKOTA’S CRUDE PRODUCTION

Source: ExxonMobil “Perspectives,” May 2014.


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MEXICO

Mexico has over 10 billion barrels of proven oil reserves, the most in Latin America after Venezuela and Brazil. However, Mexico’s total resource base of oil and gas is far greater. According to the Mexican national oil company, Pemex, there are an estimated 27 billion barrels of oil in the Gulf of Mexico alone, while the EIA estimates the country’s recoverable shale oil resources at 13 billion barrels and shale-gas at 545 trillion cubic feet. Those are the eighth-largest shale oil and sixth-largest shale gas resources in the world, according to the EIA. Mexico’s shale gas is the energy equivalent of 97 billion barrels of oil. In sum, Mexico possesses the equivalent of approximately 147 billion barrels of oil.

Although rich in resources, Mexico’s oil production has been declining for the past ten years, per the chart below, due to a lack of technology and proper investment in the oil sector. Recognizing the need to reverse this trend, Mexico has approved historic legislation to end the monopoly of Pemex in the oil business and to open the Mexican energy sector to exploration and production by foreign companies.

Before the reforms can take effect, however, Mexico's legislature must finalise the secondary laws detailing the fiscal regime, including contract terms for the exploration and production models and local content requirements. The reforms will include model contracts for exploration and development, service contracts, production-sharing agreements and licensing. Pemex will be allowed to reserve some of the best acreage for itself, but it will also have to compete with other firms during future bid processes. Although Mexico will retain

ownership of its oil, companies will be allowed to book reserves so the values can be registered on a company’s balance sheets.

If the reforms are successful, Pemex CEO Emilio Lozoya and Pemex Board member Hector Moreira estimated they could generate 50 billion dollars in new investment over the next decade and by 2025, oil production would grow from the current level of approximately 2.5 million barrels per day to over 4 million barrels per day, boosting annual GDP growth by 1 percent annually by 2018 and up to 2 percent annually by 2025.

BRAZIL

According to the EIA, Brazil has 13 billion barrels of proven reserves, second after Venezuela in Latin America. Most of Brazil’s oil is very heavy and 90% is located offshore, where it is estimated that there are another 50-60 billion barrels in the very deep-water, pre-salt areas discovered by the Brazilian national oil company (Petrobras) several years ago.

Brazil’s proven gas reserves are 13.7 trillion cubic feet, or the equivalent of approximately 2.4 billion barrels of oil. In addition, the pre-salt area is estimated to have significant gas resources that will undoubtedly add the energy equivalent of billions of barrels more oil to Brazil’s reserves as the pre-salt area goes into production. In sum, between its oil and gas, Brazil has the equivalent of between 65-75 billion barrels of oil. According to the Renewable Fuels Association, Brazil also produces on average 411,000 barrels of ethanol per day and, although seldom mentioned, Brazil has coal reserves equal to the energy equivalent of 110 billion barrels of oil. In sum, Brazil is a supremely

energy-rich nation.

Drilling began in Brazil’s offshore Santos basin in 2004, with the first discovery in 2006. Others followed, and in 2011, nineteen additional discoveries were made including seventeen in the pre-salt area. The country was euphoric with its newly-found oil bonanza and then-president Inâcio “Lula” de Silva declared

Brazil had “won the lottery.” The country’s ten-year energy plan predicted production of 6 million barrels per day by 2021, but this was later reduced to 5 million and more recently to 4.2 million by 2020 due to delays in development. For several reasons, it remains open to question whether or not Petrobras can hit its 2020 production target.

First, in 2010, when Petrobras made one of the largest share issues in history, the company predicted its oil production would rise 50% to 2.98 million barrels per day by 2014. In the first quarter of this year it was only 1.92 million barrels per day, with the pre-salt area contributing about 500,000 of those barrels. In fact, instead of increasing production for export, Brazil has been headed in the opposite direction over the past few years. For example, according to the Agencia Nacional de Petróleo (Brazilian Petroleum Authority), Brazil imported nearly 470,000 barrels of refined products per day in 2012 and by the first quarter of 2014, was importing 793,000 thousand barrels per day. Brazil has not built a new refinery in three decades and will likely have to keep importing refined products.

Second, investor interest in the pre-salt has slowed to a crawl due to many challenges, from technical and financial to political and regulatory. First, pre-salt areas are excluded from foreign concessions, with Petrobras having exclusive access. As a result, Brazil’s 2013 bid round for new exploration acreage was a total failure and there is no real market competition in the Brazilian upstream oil sector. In June 2014, the Brazilian government handed Petrobras a no-bid production agreement, awarding the company an additional 10-15 billion barrels of offshore reserves in exchange for a payment to the government of $6.8 billion dollars.

Third, there are disagreements among Brazil’s states about how oil revenue should be divided and many political groups are against increased private-sector involvement in oil and gas development under any circumstances, reflecting a widespread sense of resource nationalism. Brazilian environmental regulations are also very strict and the approval process is slow.

Fourth, Brazil needs an estimated $175 billion in capital over the coming decades to develop the pre-

Estimiated U.S., Russia and Saudi Arabi petroleum and natural gas production

Source: U.S. Energy information administration

Note: Petroleum production includes cude oil, natural gas liquids, condensates, refinery processing gain, and otherliquids, including biofuels. Barrels per day oil equivalent were calculated using a conversation factor of 1 barrel oil

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Mexico total liquids production (1994-2013)

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million barrels per day

Source: EIA


WESTERN HEMISPHERE ENERGY REVOLUTION (CONTINUED FROM PAGE 41)


salt area, but the country’s most recent bond issue raised only 8 billion dollars. Unattractive investment terms, such as domestic content rules as high as 60% according to the Petroleum Economist, have also slowed development of the Brazilian oil sector along with traditional concerns such as corruption and lack of transparency, among

others. Petrobras’s profits were down 30% in 2014 and the company is worth less than half of what it was when it went public in 2010. Investor confidence is also not helped by Brazil’s subsidised gasoline prices that cost the country $2.5 billion per year.

Finally, according to the International Resource Journal, there are also serious technical and economic challenges related to commercial recovery of the pre-salt oil many thousands of feet below the ocean floor. With pre-salt oil around twice as expensive to extract compared to conventional oil recovery today, these great depths demand technological investments and a strong focus on exploration.

In sum, investor interest in Brazil has shifted substantially since the big pre-salt discoveries due to the country’s investment climate. At the same time, this shift is due to the dramatic change in the global energy outlook and competition for investment dollars and technology from many other countries in the Americas and elsewhere in the world. Hydraulic fracturing has also made oil from pre-salt less critical to global supply. While the resources are in place for Brazil to be a world-class major oil producer, it remains to be seen if the country can actually hit its production target of 4.2 million barrels per day by 2020.

ARGENTINA

Argentina has 2.7 billion barrels of proven oil reserves, according to the EIA, as well as an estimated 27 billion barrels of recoverable shale oil (fourth in the world) and approximately 802 trillion cubic feet of shale gas (second only to China). Argentina’s shale gas is the energy equivalent of 143 billion barrels of oil. This easily makes Argentina’s shale oil and gas resources the largest in Latin America.

Argentina has historically been blessed with abundant energy resources, but not the political skills to properly develop them for maximum benefit to the country. Argentina’s oil and gas sectors have been nationalised and privatised on a number of occasions over the past several decades, something that has discouraged investors, along with a lack of transparency, political instability, poor financial management, an inadequate regulatory system and corruption. Nonetheless despite these challenges, Argentina has gotten off to an excellent start in attracting investors to its shale oil and gas resources.

A number of things have encouraged investors. One was the five billion-dollar settlement with Spanish oil company Repsol over Argentina’s 2012 nationalisation of Repsol’s 51% ownership of

YPF. In addition, as reported in the Buenos Aires Herald last year, oil companies investing in shale oil and gas development will be allowed to export tax free up to 20 percent of the oil and gas they produce and those investing at least $1 billion over five years will be exempt from foreign-exchange controls and be allowed to retain export earnings outside of Argentina. The most important factor of all, however, is the size of the prize in Argentina. International gas and oil companies are willing to take enormous risks when the prize is one of the biggest shale oil and gas plays on the face of the earth.

Last year Chevron announced it would be investing $1.2 billion in a joint venture with YPF to develop shale oil and gas deposits in the “Vaca Muerta” formation in Neuquén province and this year announced it would be investing an additional $1.6 billion. ExxonMobil also acquired about 900,000 exploration acres in the same province and in May 2014 made its first discovery. Shell, Total and other companies are also active in the shale oil and gas plays in Argentina.

VENEZUELA

The EIA estimates Venezuela’s proven oil reserves at around 298 billion barrels and its conventional gas reserves as the second biggest in the Americas after the United States. The U.S. Geological Survey estimates the country’s recoverable oil reserves at 513 billion barrels. In spite of having more oil resources than any other nation in the world, Venezuela’s oil sector has been in steady decline for the past several years. Oil output at the Venezuelan state oil company, PDVSA, has fallen 25%, from 3 million to 2.4 million barrels per day, since 1998.

Former Venezuelan President Hugo Chávez and current President Nicolás Maduro have done great damage to the oil sector. After firing over 20,000 employees a decade ago, PDVSA has been featherbedded with 110,000 employees. By comparison, ExxonMobil operates the largest and most profitable private oil company in the world with fewer than 80,000 employees and has revenues nearly four times greater than PDVSA and oil production nearly two times greater.

Venezuela’s policies have greatly weakened the economy and oil sector by feckless spending and statist intervention in the economy, resulting in inflation, capital flight and shortages of everything from food and water to consumer goods and foreign exchange. The government’s policies have also driven off major investors such as ConocoPhillips and ExxonMobil. Finally, oil subsidies to Cuba cost Venezuela $2 billion per year.

If Venezuela hopes to play a major role in the developing global energy revolution, it must undertake major political changes and dramatically improve its investment environment in order to benefit from its abundant oil and gas resources over the coming decades.

SUMMARYLatin America’s proven oil reserves are

approximately 335 billion barrels, or 68 billion barrels more than Saudi Arabia’s proven reserves. If we add to that total the probable offshore reserves of Brazil and Mexico, plus the estimated shale-oil reserves in the region, Latin America possesses about 465 billion barrels of recoverable oil. That total does not include the U.S. Geological Survey’s estimate of Venezuela’s mean recoverable oil reserves of 513 billion barrels. If we include Canada and the United States, proven reserves of oil in the Americas are approximately 541 billion barrels. Estimated U.S. shale oil reserves would bring the amount of recoverable oil in the Americas to 600 billion barrels.

Gas resources are equally impressive throughout the Americas. Latin America has the energy equivalent in gas reserves of an estimated 268 billion barrels of oil. The gas reserves of Canada and the United States would add the energy equivalent of another 74 billion barrels for a total of 342 billion barrels of oil. In sum, the total oil and gas reserves for the Americas is almost the equivalent of 1 trillion barrels of oil. To put that number in perspective, most authoritative sources, including the Oil Depletion Analysis Center (ODAC) in London, estimate that the world has consumed a bit more than 1 trillion barrels of oil since the dawn of the oil age over 150 years ago.

It is clear that the Americas have the necessary oil and gas resources to become a major producer and exporter of energy and, in the process, have a profound impact on the regional and global geopolitical environment. The challenges facing development of Latin America’s energy resources are above ground, not below. The resources, technology and capital are there. The challenges that must be overcome revolve around issues such as political instability, resource nationalism, corruption, legal uncertainty, regulatory red tape, contract stability, environmental objections and misguided economic policies.

The EIA has estimated that to meet future energy demand, Latin America must invest a total of between $3-4 trillion in energy infrastructure needs between today and 2035, with nearly $2 trillion in the oil sector alone. According to an Organisation of the Petroleum Exporting Countries (OPEC) estimate, Latin America needs to invest $100 billion in refining alone over the next generation. It is by no means certain that the needed investment will be forthcoming.

Today’s energy revolution is global and so is the competition for investment dollars and technology to develop not only traditional fossil fuels, but also, the next generation of alternative energy sources such as solar, wind and biomass, among others. In this global competition, capital and technology will flow to those countries that provide the most attractive investment environments. How many nations in the Americas will benefit from investment in the next generation’s energy future remains an open question.



SPECIAL FEATURE: DATA AND INFORMATION TECHNOLOGY

How much do you know about AmCham T&T’s Services & Products?Did you know? Our strong mix of formidable local and

international member companies, strong networking links, close association with the U.S. Embassy and alliances with the Association of American Chambers of Commerce in Latin America and The Caribbean (AACCLA) all ensure rapid access to what you need to compete effectively both in local and overseas markets. We can therefore secure for members strategic information on doing business in a particular country as well as set up introductions to the right business organisations or companies in the U.S. and throughout the western hemisphere.

As your door to opportunities in a globalised environment, some of AmCham T&T’s services are listed below.

AmCham T&T U.S. Business Visa FacilitationYou are eligible to use this facility for renewal of visas from

the U.S. Embassy for business. In addition, when the automated visa appointment services areas are ‘backlogged’, AmCham T&T may facilitate expedited visa appointments for business travel and training for company personnel. This is available at no cost to the employees of member companies.

AmCham T&T IntroductionsYou may already be in contact with a company with whom you

would like to do business or make an alliance. AmCham T&T will send a letter of introduction for member companies, which will include details such as the length of time your company has been a member of AmCham T&T and your company’s involvement with Chamber activities etc. AmCham T&T will encourage the setting up of a meeting for you to promote your products and services, but will not endorse an individual company product or service, as we represent several competing companies in any one industry.

Access to AmCham T&T Membership DatabaseListed AmCham T&T executives may request at any time from

AmCham T&T the most updated version of our membership database highlighting companies’ names, addresses and executives’ contact information. An excel version is also available.

AmCham T&T Executive Info SessionLaunching a new product or service?AmCham T&T’s InfoSessions are an excellent way of niche

marketing to the decision makers of our 297 member companies, as well as to the wider business community. AmCham T&T will be responsible for sending out notices of the session to our members

WHAT YOU ALWAYS WANTED TO KNOW AND NEVER DARED TO ASK ABOUT AMCHAM T&T ...

AMCHAM T&T ON THE INSIDE

AMCHAM T&T COMMITTEES:

• Communications Committee

• Health, Safety and Environment (HSE) Committee

• Legislative Committee

• Membership Committee

• Programmes and Events Committee

• Security Committee

• Trade and Investment Committee

To join a committee, please contact The AmChamT&T Secretariat

[email protected] Tel: (868) 622 4466/0340

and the wider business community, registration, organising the room and refreshments as well as any other administrative duties that may arise.

One-on-One Appointments Through our local and international connections as well as the

international AmCham network, AmCham T&T can arrange one-on-one appointments for companies who are seeking to expand their business in Trinidad and Tobago and the Americas.

Incoming & Outgoing Trade MissionsInformation is available upon request.

AmCham T&T Monthly MeetingsYou will receive notices of our Monthly Meetings, which usually

begin at 8:15 a.m. and end between 9:30 and 10:30 a.m. AmCham T&T business is usually the first item on the agenda, followed by a guest speaker and a discussion session. Occasionally these meetings may take the form of a Luncheon or Dinner. This may be the case if there is a special event or an important overseas visitor. Your company may also choose to become the corporate associate of a particular meeting for a sponsorship fee.

AmCham T&T Board Room Rental

AmCham T&T’s conference room is available for meetings, training sessions and board meetings. Send the particular details regarding meeting needs in terms of seating, catering, equipment, etc. and we will arrange it for you.

AmCham T&T Organsing Your Event

(Event must be trade or business-related) AmCham T&T can arrange the logistics of your event, all arrangements including sending out invitations via email or otherwise, and special invitation to ministers / diplomatic corps, following up for responses, coordination of logistics at venue before and after function.

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(Product, seminar or service must be trade or trade-related) EEMS is an email service which gives you the opportunity to detail your event (e.g. conference, seminar, etc.) to the executives listed on the AmCham T&T database (over 1000 executives).

Please note that some of AmCham T&T services & products carry a nominal fee.

HAVE YOU EVER THOUGHT ABOUT JOINING

AN AMCHAMT&T COMMITTEE?All AmCham T&T's financial members are encouraged

to have representation on the committees in order

to voice their issues and to provide feedback for

the lobbying effort of the AmCham T&T’s Board of

Directors. Committee meetings are another forum

where members can share invaluable experiences and

information with each other. See list of AmCham T&T

Committees.

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