New research on Caribbean MSMEs

BY BALFORD HENRY Senior staff reporter balfordh@jamaicaobserver.com

Tuesday, April 18, 2017

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Micro, Small, and Medium Enterprises (MSMEs), especially family-owned businesses (FOBs), account for about 70 per cent of private sector employment in the Caribbean.


However, very little research exists about this sector in the region, leaving a wide vacuum for data needed to sustain the growth and development of the sector, which is so critical to the success of these Caribbean economies.


But with the advent of a new book, "Understanding the Caribbean Enterprise: Insights from MSMEs and Family-Owned Businesses", co-authored by Lawrence A Nicholson and Jonathan G Lashley, and published by Palgrave Pivot last July, some light has been shed on this previously unexplored area within the Caribbean.


The book draws on data collected in Jamaica, Barbados, Trinidad and Tobago, and to a lesser extent Guyana, and compares the development and trajectory of FOBs within these territories as opposed to those in developed countries.


The ground-breaking research unearthed a number of revelations about the nuances of FOBs in the region, which could revolutionise the way in which Caribbean governments engage with FOBs to ensure their continued viability and contribution to local economies.


Nicholson is a senior lecturer, head of the Decision Sciences and Information System Unit and deputy executive director at the Mona School of Business and Management (MSBM) on the Mona Campus of the University of the West Indies (UWI) in Kingston. Much of his work focuses on supply chain management and FOBs.


Jonathan Lashley is a Fellow at the Sir Arthur Lewis Institute of Social and Economic Studies (SALISES) at UWI, Barbados. His research has primarily focused on issues of sustainable socio-economic development. He has been published both regionally and internationally.


The different cultural and ethnic components contributing to the operation of FOBs are exemplified by data collected in Jamaica. As Jamaica is a multicultural country with representation from various ethnic groups, the research explained the profound differences in the way that Jamaican families from different ethnic backgrounds conduct business — perhaps the most significant being the contrast between FOBs owned by individuals of African descent and their Chinese counterparts.


Nicholson and Lashley explained that due to slavery’s disruptive effect on culture, FOBs owned by blacks were usually started to "take their children through school", rather than for wealth creation, unlike their Chinese counterparts.


But the latest set of data has shown a shift in the attitude of blacks, where being educated and creating wealth are no longer seen as mutually exclusive processes.


Understanding the Caribbean Enterprise also identifies biased approaches in the education system, which often dissuaded high-performing students from entering the field of business.


"In Jamaica, the brightest students have traditionally been encouraged to enter medicine, the sciences and law, while the lesser-performing students were steered towards business. As a result, business was considered to be somewhat of a second-rate profession, to be considered only if one were perceived not to have the capacity for the sciences or law. This practice has proven damaging to the economy, as it is often starved of some of our best minds," says Nicholson.


Given global statistics, which show that only 30 per cent of FOBs survive to the second generation, while a mere 15 per cent continue into the third generation, Nicholson and Lashley offer some prescriptions to be utilised by regional governments to improve the longevity of FOBs in their respective countries.


The first of these is ensuring that specific statistical data on the presence and performance of FOBs is collected and kept current by national statistical institutes, such as STATIN in Jamaica. This would not only allow for governments to monitor the performance of one of the most important business types in the region, but it would also give FOBs greater lobbying power when they have statistics to support their importance to the regional economies.


Nicholson and Lashley also encourage FOBs to engage in prudential succession planning, as a means to ensure that not only do FOBs remain in the hands of family members, but that management of the business is handed down to the most capable relatives to ensure continued success and longevity.


The genesis of the research is attributed to the interest shown by numerous owners of family and women-owned businesses, and the wisdom of Professor Gordon Shirley, former principal of UWI, Mona, and Dr Maxine Garvey, to respond to the call in 2004.


Special acknowledgement is also given to business owners, policy makers, librarians, research assistants and other individuals who helped make publication of the book possible. These include James Moss-Solomon, former Director of Corporate Affairs at GraceKennedy Ltd, and Professor Densil Williams, Executive Director of the Mona School of Business & Management.

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