Arise, small busi­nesses!

Jamaica Gleaner - - @ISSUE -

THE BIL­LION-DOL­LAR life­line thrown to small and medium-size tourism busi­nesses may just be the stim­u­lus needed to en­er­gise com­mer­cial ac­tiv­ity in Ja­maica as the clam­our for growth and de­vel­op­ment in­creases.

It was an up­beat Tourism Min­is­ter Ed­mund Bartlett who an­nounced ear­lier this week that these busi­ness op­er­a­tors will be able to ac­cess up to $25 mil­lion at five per cent in­ter­est over five years un­der a fi­nan­cial ar­range­ment be­tween the Tourism En­hance­ment Fund and the Na­tional Ex­port-Im­port Bank of Ja­maica.

Pre­sent­ing a bright out­look for the sec­tor, Mr Bartlett pre­dicted that ac­cess to cap­i­tal guar­an­teed by this agree­ment would un­lock the true po­ten­tial of small busi­nesses by en­abling them to up­grade their plants and be­come more pro­duc­tive. Hope­fully, this is a sig­nal that Gov­ern­ment has raised the sta­tus of small busi­nesses in the scheme of de­vel­op­men­tal plan­ning.

It is in­ter­est­ing that some de­vel­op­ment ex­perts no longer sup­port the no­tion that eco­nomic growth should rely on at­tract­ing large firms by hand­ing them in­cen­tives like tax breaks. In­stead, they are now point­ing to the small and medium-size busi­ness sec­tor as the back­bone of eco­nomic de­vel­op­ment. In Ja­maica, the sec­tor is un­der­tak­ing a va­ri­ety of en­tre­pre­neur­ial ac­tiv­i­ties in ar­eas such as agri­cul­ture and agro-prod­ucts, leisure, cos­me­tol­ogy, trans­port, food prepa­ra­tion, en­vi­ron­ment and al­ter­na­tive medicine.

One of the great­est chal­lenges faced by the sec­tor is rais­ing cap­i­tal from fi­nan­cial in­sti­tu­tions at favourable rates. The re­sult is that cash-flow pres­sures have be­come com­mon­place to op­er­a­tors of small busi­nesses. And when there is no cash, the busi­ness is un­able to source raw ma­te­rial, in­sti­tute cre­ative man­age­ment, and in­tro­duce new tech­nolo­gies. In­stead of growth, there has been stag­na­tion.

GOV­ERN­MENT’S STRAT­EGY KEY

So what will en­sure that in­no­va­tive small busi­nesses are not sti­fled be­cause of lack of cap­i­tal? This has ev­ery­thing to do with Gov­ern­ment’s at­ti­tude to­wards the sec­tor and its strat­egy for growth. It is the in­ter­ven­tion of Gov­ern­ment and its re­lated agen­cies that will help to equip the sec­tor with the req­ui­site tools to help it climb to the next level and be­come a gen­uine plat­form for fa­cil­i­tat­ing eco­nomic de­vel­op­ment.

While small busi­nesses can­not em­ploy the num­bers or gen­er­ate the rev­enues that large cor­po­ra­tions do, they do not al­ways re­main small and of­ten serve as build­ing blocks that ex­pand over time into ma­jor play­ers in lo­cal and some­times in­ter­na­tional mar­kets. To its credit, the small-busi­ness sec­tor has ex­hib­ited re­silience and for­ti­tude, and even in the face of strong com­pe­ti­tion, con­tin­ues to fight back.

In an en­vi­ron­ment of retrenchment and shrink­ing job op­por­tu­ni­ties, many young school leavers are not able to find that elu­sive white-col­lar job they have been dream­ing about through­out their school years. The re­sult is that many are forced to use their ed­u­ca­tion to start some­thing on their own. The fact is that start-ups and as­pir­ing en­trepreneurs also need sup­port to suc­ceed.

Note is taken of the fact that this bil­lion-dol­lar fa­cil­ity tar­gets small en­ter­prise in tourism and linked in­dus­tries, but the small and medium en­ter­prise sec­tor is ex­tremely wide, so there ought to be an over­all as­sess­ment of the sec­tor to de­ter­mine how the great­est needs can be sat­is­fied.

Small and medium-scale en­ter­prises have great po­ten­tial for de­vel­op­ing the do­mes­tic econ­omy and pro­vid­ing sta­bil­ity for small and marginal com­mu­ni­ties. The cru­cial role small busi­nesses play in in­no­va­tion and cre­at­ing op­por­tu­ni­ties for new en­trants into the eco­nomic main­stream of so­ci­ety can­not be over­looked or min­imised.

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