National ICT Strategic Plan Government of St Kitts and Nevis (e) High cost of infrastructural services relative to the population and the tax base. (f) The rising cost of fuel 2. Lack of economies of scale and scope: Our small size has made it difficult to realise economies of scale and scope especially in industry and agriculture. Relatively high labour and operating costs also act as a constraint on doing business in St Kitts and Nevis. 3. Market imperfection: There is a high incidence of monopolistic and oligopolistic behaviour in our domestic markets. Financial markets, in particular, are narrow and shallow and, as such, limited in their capacity to absorb domestic and external shocks. These market imperfections suppress efficiency and competitiveness, leading to higher production costs and prices, suboptimal quality of service delivery and reduced consumer welfare. 4. Public Sector bureaucracy: the Public Sector is characterised by over-centralisation and over-dependence on rigid regulations. 5. Limited capacity in the Public Sector: The St Kitts and Nevis Public Sector is operating within the same modalities as it has for over the last 30 years while the economy has grown significantly and society has become infinitely more complex. In addition, this has contributed to general tardiness in the implementation processes. 6. Weak entrepreneurial culture: There is a low level of entrepreneurship, with Kittitians and Nevisians generally disinclined to take business risks and to turn innovative ideas into enterprises. In addition, there is limited institutional capacity. 7. Paucity of research, development and innovation: There is a general lack of intensity and continuity in research and development in the areas of enterprise development, product development and ideas development. 8. Weak management tradition: Managerial practice and technology lag behind international standards in the private and public sector. Ministry of Finance, Sustainable Development, Information and Technology November, 2006 12