jwala rambarran : venture capital financing in the caribbean – its relevance to the economic transformation agenda opening remarks by mr jwala rambarran, governor of the central bank of trinidad and tobago, at the 3rd caribbean business executive seminar “ venture capital financing in the caribbean – its relevance to the economic transformation agenda ”, port of spain, 4 april 2014. * * * good morning ladies and gentlemen, let me first thank the caribbean centre for money and finance ( ccmf ) for inviting me to deliver opening remarks at its 3rd caribbean business executive seminar on venture capital financing. i commend ccmf for bringing together a wide cross section of c level executives from finance and government as well as academic experts to share experiences and best practices on the policies to promote venture capital finance in the caribbean. this seminar is particularly timely, since it is taking place against the backdrop of a global environment that is likely to be less favorable than in the recent past because of tighter financing conditions as well as slower growth in some advanced economies and major emerging markets. caribbean policymakers, in their search for new sources of development finance, are rekindling their interest in venture capital to help spur innovation, create jobs and support economic growth. i say rekindling interest because the regional venture capital landscape is, at best, in an embryonic stage. in caribbean economies, venture capital fundraising ( as a percent of gdp ) is negligible, or at zero. several venture capital funds have closed since 2008. in fact, in trinidad and tobago, the venture capital industry has collapsed. and most venture capital investment, even when finally deployed, has financed start - ups of small to medium enterprises without any discernable positive economic impact. ladies and gentlemen, for a region discovered some 525 years ago thanks to venture capital financing, the caribbean has failed to develop a vibrant and indigenous venture capital industry. think about it. christopher columbus created a model for the modern caribbean entrepreneur to follow. columbus spent seven years pitching his business plan to genoese bankers ( the world ’ s first angel networks ) before convincing king ferdinand and queen isabella of spain ( institutional investors at heart, if not in name ) to fund his risky start - up venture in 1492. his business plan called for using three ships to discover a faster sea route to india and china by sailing west into the atlantic. columbus persuaded ferdinand and isabella that a new route to asia would disrupt portugal ’ s monopoly on asian exploration and give spain vast riches such as silk

offers several contrarian prescriptions for starting an entrepreneurial revolution, all of which, i believe, are relevant to the caribbean economic transformation agenda. i would like to highlight three key lessons for caribbean policymakers. the first lesson is to stop attempting to duplicate silicon valley. many governments have the near universal ambition to develop the next silicon valley, which is home to a veritable “ who ’ s who ” of hi - tech giants such as apple, ebay, google, intel, linkedin, and oracle. yet, ironically, silicon valley could not even replicate itself today if it tried. its ecosystem evolved from the convergence of a unique set of circumstances : a large pool of skilled engineers and scientists from major universities in the area ; the laid - back but driven for speed california culture ; generous funding from a strong aerospace market with the defense department ; development of an efficient network of venture capital firms ; the institutional leadership of world - class stanford university ; and pure luck, among other things. in 2008, the government of trinidad and tobago decided to create its own version of silicon valley by investing an estimated us $ 150 million in the caribbean ’ s first science and technology park, known as the tamana intech park. the principal purpose of the tamana intech park was to drive economic diversification in trinidad and tobago through the establishment of technology intensive, knowledge - driven industries in the non - energy sectors. the park would be home to major technology players and the place where groundbreaking and innovative ideas would emerge. one of the park ’ s largest tenants, the university of trinidad and tobago ( utt ), would provide the necessary synergy between industry and academia in bringing emerging technologies to market. unfortunately, despite several expressions of interest, tamana intech park is yet to sign one tenant. ladies and gentlemen, this brings me to my second lesson. trinidad and tobago ’ s experience with tamana intech park shows that governments cannot build ecosystems alone. governments should engage the private sector, ideally from the start, and let it keep or acquire a significant stake in the ecosystem ’ s success. one way the government of trinidad and tobago could avoid problems such as the empty buildings in tamana intech park would be to seek matching funds from private investors, either locally or overseas. bis central bankers ’ speeches the government can directly approach technology investment firms and technology researchers to determine what they need to develop a world - class industry. if the private investor then offers to match say half of the funds,