By K.C. Soares, Contributor IN DAYS gone by, many businesses flourished even though the owner or proprietor had little or no education. Some may say that this is true even of today. It is not unusual to find operators of businesses, particularly small businesses, who cannot read or write. How do these businessmen and businesswomen get by? Well, they use basic intelligence and rely heavily on the integrity of bankers. Even the 'village lawyers' had roles to play. In transactions involving legal documents, a bank manager, for instance, just has to point to the space where the individual should sign, and without reading or any questions asked, the document is executed. If the business operator cannot read or write he or she is asked to make an 'X' where a signature should be affixed. If the person being asked to execute the document cannot make an X his or her hand is usually held and moved around to form the X.
FORMAL EDUCATION ESSENTIAL
However, these type of businessmen and businesswomen are fast becoming extinct. Today's global economy demands that there has to be some formal education of the managers of businesses in order for such businesses to be competitive. The removal of trade barriers will facilitate fierce international competition and even companies whose products target only domestic markets will have to change their ways of doing business. The lack of formal education will prove to be a stifling handicap.
Are we equipped to meet the challenges of globalisation? Is the formal education of our businessmen and businesswomen and the people who work in these businesses up to standard? Recent figures released showed that only 3.5 per cent of the population have university degrees, 15.4 per cent have passes in CXC or its equivalent and almost 75 per cent have no academic qualifications at all.
While I do agree that businesses can be, and have been, successful even though the principals are not academically qualified, the incidence of such success stories are becoming fewer and fewer as the days go by.
In view of this, it is my firm opinion that businesses will not succeed in the future if the principals, in particular, and workers in general are not academically qualified. For those who may misunderstand this statement, allow me to clarify. I am not suggesting that all businesses should be run by university graduates nor I am suggesting that even the bearer/messenger of a business establishment should be academically qualified. What I am suggesting is that key persons (such as managers and supervisors) must be academically qualified if the business is to succeed in a globalised market environment.
The need for qualified personnel is particularly in respect of small and micro-enterprises (SMEs). Micro-creditors, for instance, are largely centred in the inner cities where the people are mostly not educated. In this regard, as I have suggested before, the disbursement of funds to micro-enterprises should be accompanied with some educational upliftment. Subjects such as bookkeeping, economics and mercantile law should be considered.
Small businesses are expected to grow and in order to do so proper records (financial statements) must be kept and reasonable management practices enforced. As the financial sector becomes more sophisticated it is less likely for business loans to be granted without the presentation of financial statements. Without educating the uneducated, the small business sector will continue to shrink. This will result in significant increases in unemployment as there will be no sector to absorb the redundancies brought about by technological advancements in other sectors. As larger companies become more capital-intensive there will be lay-offs, and if the small business sector cannot absorb these people, where will they go?
SECTOR IN TROUBLE
The performance of the small business sector over the past five years is indeed frightening. The sector in 1998 accounted for 36.1 per cent of the total employed labour force. Since then there has been a steady decline in this figure with only about 31 per cent of the total employed labour force being accounted for by the sector in 2002. This steady decline is against the background that more than 50,000 jobs were lost between the years 1999 and 2002. Where will the unqualified unemployed gain employment?
The small business sector has long been recognised as one of the means of achieving poverty reduction, increased employment and growth. For the sector to grow, we must tackle the education problem as part of an overall strategy. And the time is now.
K.C. Soares is a former banker and
is now a business consultant with Soledad Financial Services Limited.
E-mail: soledad@netcomm-jm.com.
