Developingthe Aruban economy through sustainable entrepreneurship

March 1st , 2011Edward Erasmus MA

National Integrated Strategic Plan (NISP)

What we will do in the next 60 minutes…• Have a conversation about sustainability

& corporate social responsibility (maatschappelijk verantwoord ondernemen)

Approach• Generate interactive discussion• Explain some concepts• Spark off your thinking

Before we start….

Please watch this short video….

Getting started… Three key questions…

1. What is sustainability?2. What is corporate social

responsibility (CSR)?3. Why is CSR so important nowadays

for business and social development?

In your own words…….

Sustainable Development

“Development which meets the needs of the present, without compromising the ability of future generations to meet their own needs.”

- The Brundtland Commission Report

Today, we are painfully beginning to learn that environmental resources are limited and are quite sensitive to everything that we do. We are starting to experience the effects of the actions of generations that came before us. To make sure that future generations will not experience worse, we need to be aware of the ideals and requirements of sustainability.

Why is sustainability important?

“We are living on this planet as if we had another one to go to.” - Terri Swearingen

Sustainability: key actors….

•Government•Community/NGO’s•Businesses

Neither government, nor NGO’s, instead…Empirical research reveals that

entrepreneurs are the key drivers of innovation and social progress.

“…they [entrepreneurs] act as engines of growth, harnessing opportunity and innovation to fuel economic advancement.” [Skoll Foundation, 2009]

Corporate Social Responsibility(maatschappelijk verantwoord ondernemen)

…..the integration of business operations and values, whereby the interests of all stakeholders including investors, customers, employees, the community and the environment are reflected in the company's policies and actions.

Also known as: sustainable entrepreneurship

Why practice CSR?

Companies have learned the hard lesson that without a sustainable society, there is no sustainable business….

So in instead of focusing on short-run financial returns….

Companies focus on contributing to long-term societal well-being in which everybody can develop and grow….

Some CSR success stories

• Reduced packaging materials for products• Reengineered its logistics by rerouting trucks and

save 100 million miles

• Helped save $200 millions in costs, while reducing fuel consumption (and emission) and lowered disposal costs to landfills

Some CSR success stories

• By investing in employees wellness programs, the company helped save $250 million is health care costs

Nos Aruba 2025Abo dicidi awe, nos Aruba di mañan

National Integral Strategic Plan (NISP)

Developments past decades

• Huge economic growth• 35% of workers not born on Aruba• 70% of economy tourism-driven• Challenge to the environment, culture,

identity• High quality of life for all citizens at stake• Carrying capacity question• Lack of vision to formulate priorities

Why Nos Aruba 2025?

To build a National Integral Strategic Plan (NISP) for Sustainable Development of Aruba

Mission: To involve the broad community in creating together a vision for Aruba’s future using a participatory approach.

Principles• We integrate economic, social, community and environmental

priorities.• We respect and live within the natural resources and limits of our

island.• We must achieve a diversified and dynamic economy (beyond

tourism).• We honor our culture and values • We make decisions based on meeting the present needs without compromising the needs of future generations.• Everyone — individuals, families, communities, businesses and government — has accountability for achieving a sustainable

Aruba.

The Sustainability Challenge….

Some economic sustainability statements

• Economic diversification into high value areas;• Sustainable, high value, responsible and balanced

tourism;• Improved flexibility, efficiency, productivity and

equity of markets and economy;• Opportunities for new business ventures both within

and outside existing industries;• Develop a national innovation system through

knowledge based capabilities

Four commissions (design phase)

• Socio-economic structures• Nation of Innovation• International Financial Center (IFC)• Sustainable Tourism

Shared goal: to focus on agendas and opportunities to promote sustainable economic growth and diversification…

Some aspiration quotes for 2025

• “Increased quality of life based on a balance in the socio-economic sustainability...”

• “Smart people + smart ideas = nation of innovation”

• “The financial sector has become the 2nd largest GDP driver of Aruba…”

• “Un Aruba Dushi Pa Biba ta un Aruba Dushi pa Bishita”

Socio-economicstructure

Commissions

Desiredoutcomes

Strategies

• Economic productivity• Quality of life• Spatial planning• Financial sustainability

• Economic productivity• Quality of life• Spatial planning• Financial sustainability

• Innovative economic environment

• High-developed human capital

• Sustainable technology & ICT

• Sustainable society

• Innovative economic environment

• High-developed human capital

• Sustainable technology & ICT

• Sustainable society

• New economic pillar• Advanced

infrastructure• Highly educated people• Excellent int’l network

• New economic pillar• Advanced

infrastructure• Highly educated people• Excellent int’l network

• Create vision sustainable tourism

• Tourism environment• Quality physical

infrastructure• Enriched visitor experience• Travel facilities• High desirable global brand

• Create vision sustainable tourism

• Tourism environment• Quality physical

infrastructure• Enriched visitor experience• Travel facilities• High desirable global brand

Arubain 2025

Increased quality of life

• Sustained socio-economic development• Developing a nation of innovation = Smart people + Smart ideas• Enabling the international financial center• Sustainable tourism development

High productivity Innovation-friendly environment

Nation of Innovation

InternationalFinancial

Center

Sustainable Tourism

High-end tourism destination

Well-developed new economic pillars

Sustainable society(synergy & ‘win win’)

Focus of Strategic Economic Growth

• Promoting capital-intensive and technology-driven activities.

• Increase efficiency in the labor force and develop/ attract highly skilled workers in such sectors as services, transshipment and/or assembly of high-value, time sensitive goods.

• New industries should be in harmony with the tourist industry where the quality of the environment and the attractiveness of the island will attract both tourists and visitors to combine business and relaxation when visiting Aruba.

Focus of Strategic Economic Growth

• The growth in the tourism industry should match the needs of the local population (education, labor, social, infrastructure, environment and culture)

• A diversified and balanced constellation of accommodation

Awareness programs

Innovative mindset

Highly educated workforce

Regulations

Focus on quality tourism (curbed

hotel rooms)

Excellent international

networks/relations

Foreign Investment

Platform

Incentives

Key elements for sustainable economic growth

Adequate social safety net

Tax treaties and TIEA

Spatial planning

Safe and secure environment

Improved infrastructure

Marketable global brand

High level of productivity

Efficient & non-bureaucratic government

Technological know-how

Sustainable economic

growth

Healthy community

Entrepreneurship on Aruba

Aruba entrepreneurs

• Competition oriented (no differentiation)• Comfort zone (same products on same

market)• Fear of trying out new things• Lack of stimuli• Technically challenged (so much more out

there)

Aruban entrepreneurial realityToo much of the same….

Basic conclusion

A change in the fundamental entrepreneurial thinking on Aruba should happen quickly, otherwise the small and medium business sector will autodestruct itself through far-going cannibalization…

Innovation and sustainable entrepreneurship is the key…

“Change will not come if we wait for some other person or some other time. We are the ones we’ve been waiting for. We are the change that we seek.”

- Barack Obama

And yes, there is hope….Some positive developments within

the concept of CSR initiatives:

• Windpark Vaderpiet• Waste Separation Plant (Barcadera

Free Zone)• Project solar panels (Parke Arikok)• Hotels are requesting ‘green

certification’• Young entrepreneurs experimenting

with eco-products / services

Waste separation and export of recyclable products (paper, plastic, aluminum, etc.)

Waste separation plant Barcadera Free Zone

Example of CSR…..

Key areas in Aruba that require entrepreneurial innovation• Green energy provision• Internet-based services (e-business)• Financial services• Export-oriented activities (goods & services)• Sustainable food supply• Healthcare• Culture (?)• …….

Examples of business opportunitiesARUBA INTERNATIONAL BUSINESS CENTER

A showcase and commercial center to attract internationally renowned companies to display their products to visitors and business contacts in the region.

Attracting investors to make use of our financially and fiscally attractive regimes combined with a stable and well functioning legal system and market-oriented regulations

SUSTAINABLE FOOD SUPPLY PROJECTS

Agriculture &Aquaculture

Examples of business opportunitiesRETAIL SOLAR AND WIND ENERGY

Provision of domestic solar and wind energy solutions

Multi-functional institutions providing high quality and demand-driven learning, research and development programs to the benefit of the community

LEARNING, RESEARCH & DEVELOPMENT FACILITIES

Final observations• The government should introduce

policies and regulations to create the environment for tourism and other industries to develop and flourish, however…..

• Entrepreneurs and the business community are the key drivers for innovation and progress.

• Preparing the next generation of entrepreneurs and professionals is a prerequisite for future success

“The real source of wealth and capital in this new era is not material things… it is the human mind, the human spirit, the human imagination, and our faith in the future.”

- Steve Forbes

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QUESTIONS?

THANK YOU

I wish you all a pleasant day