Editorial | Arise, small businesses!
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.