Critical role for MSMEs in regional economies

A Caribbean Development Bank (CDB) official is warning authorities in Barbados and the rest of the Caribbean that to ignore the plight of micro, small and medium-sized enterprises (MSME) sector is to miss out on desperately needed sustained economic growth.

This caution has come from Director in the Projects Department of the CDB Daniel Best, who said it was also critical that countries in the region fully embrace technology to help their struggling economies.

Speaking at the closing ceremony for the second cohort of the 2018/2019 Caribbean Tech Entrepreneurship Programme (CTEP) at the Accra Beach resort on Wednesday, Best said, “For the region to accomplish the ambitious goals it has set to improve the lives of Caribbean people it will need to fully and capably embrace digital innovation,” as he lauded CTEP for its efforts in helping to develop companies in the region.

“This is critical when we consider that most of our regional economies are struggling to achieve meaningful and sustained economic growth above two per cent. We must decide on the most effective inclusive and appropriate way to stimulate our economies,” said Best.

He said the CDB has strategically positioned itself to support greater use of technology by MSMEs so they could help to break the cycle of sluggish economic growth that has plagued the region for too long.

However, he called on leaders in the region to stop procrastinating when it came to addressing the challenges facing the small business sector.

“The importance of MSMEs is undeniable and as such we cannot continue to ignore or defer addressing issues that affect the sector and impact their survival and by extension their competitiveness,” he warned.

Best said some of the issues affecting the sector included limited access to finance, a weak enabling environment; limited administrative support from business support organisations; high energy and production costs; limited human resources and entrepreneurial skills; lack of quality market information; poor product and service quality and standards, and lack of cutting-edge technology.

He said that while the CDB was doing what it could through various private sector development initiatives to help address some of the issues throughout the region, small firms also had a role to play.

Best recommended that they prepare their products and services for the international market and form clusters to lower their production costs and benefit from economies of scale.

He also urged them to establish strategic partnerships that would help them control quality, secure routes to markets and drive down distribution costs.

“This is what I think your role will be in the regional value chain,” Best told the CTEP participants, as he pledged the bank’s continued support for business development in the Caribbean.

Of the more than 180 firms that entered the incubation stage of the programme, 22 of them made it to the finals, and nine firms eventually emerged winners in three different categories – ideation, validation and scale-up.

Permanent Secretary in the Ministry of Small Business, Entrepreneurship and Commerce Elsworth Reid called on the entrepreneurs to do more market research, warning that they were operating in an era where changes were taking place rapidly and in some cases, radically, and that technology was driving the process of production in many industries.

“Many MSMEs in the Caribbean fail in the first two to four years of start up, or sooner, due to complacency and lack of engagement in meaningful marketing research and development, which otherwise would have helped them to be competitive in a global marketplace,” said Reid.

“The lesson I urge you to learn is that there is no enterprise that is too small to engage in meaningful research. It is so for the one man who works from home and it is so for the small business that employs 25 people or less,” he said.
(MM)