Expert: Need to plug small business leaks
TOO MANY ENTREPRENEURS are falling by the wayside after only a few months in operation.
This was one of the findings of the Global Entrepreneurship Monitor (GEM) 2011 Social Report released recently at the Cave Hill School of Business (CHSB).
The research was conducted in Barbados, Trinidad and Tobago, Jamaica and Colombia and compared with Latin America, factor-driven, efficiency-driven and innovation-driven economies.
Presenting the findings, and speaking on the topic Entrepreneurship in the Caribbean – with Specific Reference to Social Entrepreneurship, Rodrigo Varela of ICESI University in Colombia said Caribbean people generally believed that entrepreneurship was something good.
“One of the problems I want to talk about today is that we need to take care of the leaks. Maybe we are pushing too many people to get inside but too many of them are leaking from the system. And at the end we get very few effective results to provide the growth and development that we need,” he said.
“So there are a lot of people starting companies and working up to a three-month period but there are very few going from that stage,” added Varela.
The data, which looked at the year 2009 and in some cases 2011 and 2012, showed 13.7 per cent of businesses in the Caribbean are start-ups but only 5.7 per cent of them survive past three months. While about 10.8 per cent of businesses in Barbados were start-ups, only 1.8 per cent survived over three months.
“In the case of Barbados, it is very disturbing,” he said.
One new business is grown out of every 6.1 start-ups, he said, “So we are doing a tremendous effort in the first stage but we are not able to get to the second stage. All the Caribbean countries, we are not very good at that.
“The only one that looks good is Trinidad and Tobago,” said Varela.
He said despite having a wealth of information and an environment conducive to successful business, there were still some “leaks”, and gave two main reasons:
“It could mean that we are getting to the people who are not ready and do not have the entrepreneurial confidence or maybe our programmes are not providing the required support so that entrepreneurs will be able to do the transition,” he said, adding that it was important for entrepreneurship to be taught in schools.
“Maybe we need to teach more of the people how to survive and grow. Too many enterprises are dying in the process and we need to improve the head of the system. We need to worry because we are wasting resources and people. So we need to improve,” he added.
Varela said they also found that only one per cent of entrepreneurs were doing something to improve their business and a number of people who were setting up new businesses lacked the passion to develop it. (MM)