ECONOMIC RECOVERY AND GROWTH
“We believe that the attainment of international competitiveness is not only about adjusting production facilities and processes.it is about providing a guiding hand to our children and young people so that they may grow into mature and responsible citizens.” – Excerpt from 2005 Budget Address by St. Kitts & Nevis Prime Minister Hon. Dr. Denzil L. Douglas.
Last week I paid my first stay-over visit to Grenada after the devastation caused by hurricane Ivan in September 2004. On the journey from the airport to the hotel, there was little evidence of the extent of the devastation. A roof was missing here and there but the spectacle of freshly painted red, green and blue roofs on most of the buildings was impressive. The flora was alive and well, the sheep were crossing the road as usual and the spirit of the taxi driver was exuberant. The Grenada Grand Beach Resort, where I stayed, was full, the meals were excellent, the rooms were as good as or better than on previous visits, the staff members were helpful, Grand Anse beach was its usual majestic self, a musical trio exhibited a taste of local culture, Internet access was available – what more could you want?
In the wake of Ivan, there was total dislocation of the country in terms of its tourism plant, its agriculture, its school system, its utilities and its health system. The lead economic recovery initiative is through the Agency for Reconstruction and Development. Much is being done through local, regional and international initiatives and resources, but much more needs to be done. Not the least of the challenges is the repositioning of the economy which leads me to the purpose of my visit.
Venturepoint 2005 was the 6th annual regional business conference hosted by the Venture Capital Incentive Programme (VCIP) of the Government of Trinidad & Tobago. Four of the previous conferences were held in Trinidad and one in Barbados. The main VCIP partner for Venturepoint 2005 was the Grenada Enterprise Alliance. The theme of the conference was ‘Economic Recovery and Growth through Entrepreneurial Development’ and I was honoured to be asked to facilitate the one day meeting of presentations and interactive dialogue, as I had done for the previous two conferences.
On the second day, the Entrepreneurial Showcase was held where Grenadian businesses were invited to showcase their business proposals and projects to a regional team of debt and equity partners with the hope of accessing much needed capital. Venturepoint 2005 was sponsored by RBTT Bank Grenada Limited, USAID, Caribbean Financial Services Limited, the Caribbean Development Bank and the Eastern Caribbean Securities Exchange.
Dr. the Hon. Keith Mitchell, Prime Minister of Grenada, was very upbeat in his support of the case for entrepreneurship as an imperative for change in small island states. There were many interventions from representatives of the host, partner, sponsors, UNECLAC (on disaster recovery programmes), financiers, entrepreneurs and regional institutions. There were over 80 participants at the event.
Having attended four of the six Venturepoint conferences, I have observed an evolution in the understanding, both from venture capitalists and entrepreneurs, of the importance of venture capital to the sustainable development of their businesses in the Caribbean.
Alas, financial capital is not all! As I proposed to the gathering at Venturepoint 2005, successful entrepreneurial development depends on the optimal mix of entrepreneur, money and management. The entrepreneur and money, without management, result in high levels of business failure, not to speak of the waste of financial resources. The entrepreneur and management, without money, inhibit business concepts from ‘seeing the light of day’. Of course, there is no energy and passion to drive a potential enterprise if there is money and management but no entrepreneur.
CBET is currently refining its ‘shepherding’ model where CBET partners with the entrepreneur to facilitate the optimal mix of entrepreneur, money and management at all stages along the journey from business concept to sustainable business success. Under the enterprise development status quo in the Caribbean, it is estimated that upwards of 80% of business concepts either never get off the ground or fail in their embryonic stage. If this were not the case then the Caribbean would be thriving and financial institutions would not be complaining of the lack of deal flow to absorb the dormant financial capital in the region.
The reason for business failure is weak management, either of marketing, operations, human resources, finance or combinations thereof. CBET’s goal is to convert the new business success rate to 80%. Good management will protect against the risk of business failure and hence ‘management as collateral’ will become the theme song of financial institutions.
CBET will establish partnerships with donor agencies as well as financial institutions to access the financial instruments appropriate for each stage of the journey. CBET will partner with institutions or individuals who can provide the appropriate management inputs at each stage of the journey. CBET will introduce the appropriate technologies and processes to enhance the productivity of the model throughout the journey.
If businesses do well then the nation will be on a path of economic recovery and growth. When the nation does well, we all benefit.