“Big business” is no longer being seen as the main driver of the Barbadian economy, as more family-owned enterprises are emerging as the “main plank on which the modern economy hinges”.
Minister of Industry Donville Inniss noted that between 65 per cent and 85 per cent of all businesses in the world were family controlled, including many of the largest companies in Europe and the Americas, with Wal-Mart, Ford Motor Company, and Samsung being prime examples.
He was speaking this morning at the opening ceremony of the FINPYME Family Business Workshop in Barbados: Governance for Competitiveness and the Continuity of Family-Owned SMEs in Barbados, at the Cave Hill School of Business, Cave Hill, St. Michael.
Inniss noted that these types of businesses, whether identified as the village shop or any other community enterprise, have educated the children and extended family of their owners or in many cases provided credit to ensure a reasonable quality of life to the average Barbadian.
Acknowledging that Small Micro Enterprises are important to almost all economies in the world, the minister noted that this specifically applied to those in developing countries, and, within that broad category, especially to those with major employment and in distribution challenges.
Creation of decent jobs
“On the ‘static’ front, SMEs contribute to output and to the creation of decent jobs; on the ‘dynamic’ front, they are a nursery for the larger firms of the future; and as the next step up for expanding micro enterprises, [as] they contribute directly and often significantly to aggregate savings and investment while being involved in the development of appropriate technology,” he added.
He pointed out that while each family had its own dynamics, it was not uncommon that “as the family structure shrinks or expands, the business could change commensurately, particularly with the start of the second and third generations”.
“Changes instigated by new generations can either improve or harm the business. While for example, success stories can be drawn from the Elcocks, Leacocks, Seales and Goddards of our local landscape, we know only too well of the horrendous stories of business failure … international research states that while 15 per cent of family-owned businesses continue to survive to the third generation, 85 per cent either disintegrate or completely vanish before the fourth generation.”
He maintained that “the days when genetics were seen as a qualification for an executive job are long gone”, and stressed that while leadership will come from within the family unit, this could not be to the detriment of the business.
The minister told those gathered that he also wanted to expose another misconception about family business which had sometimes negated its advancement. This, he said, was the notion that when people think of family business they think of small businesses which are expected to remain small. He cautioned that such thinking was myopic and noted that small business should never be intrinsically linked to small-mindedness.