Businessuite News24
State of the MSME Sector in CARICOM – Prospects for the Future
Published
5 years agoon
I want to begin my remarks this morning by thanking Senator Lynette Holder, CEO of the Barbados Small Business Association for inviting me to deliver the keynote address at this year’s State of the Sector Conference.
I also want to congratulate the SBA for its continuing advocacy of micro, small and medium-sized businesses across Barbados, and for organising this important event.
I encourage you to remain steadfast in your mission“to provide effective representation and exemplary development services to and on behalf of micro, small and medium enterprises, nationally” and to continue to play a leadership role in elevating MSME issues on the local policy agenda.
This Conference is a perfect opportunity for all stakeholders here today to exchange ideas and widen their collective understanding of effective ways to catalyse MSME development in Barbados.
By providing a platform for dialogue and exchange of information, fora like this one can deepen the partnership between the Government, the Small Business Association and MSMEs.
I feel especially privileged to have been asked to address this Forum on the topic “State of the MSME Sector in CARICOM – Prospects for the Future.”
This discussion is timely. In 2015, all CARICOM countries became signatories to the United Nations 2030 Sustainable Development Agenda. MSMEs are regarded as an important vehicle for achieving the Sustainable Development Goals (SDGs). Through their significant job creation impact, MSMEs can play a pivotal role in reducing poverty and income inequality, especially amongst women and youth.
The Caribbean Development Bank shares the SBA’s ambition to nurture and unleash the transformation potential of MSMEs and to create a strong, enabling business ecosystem.
Importantly, we, at the CDB, are in the midst of preparing our strategic plan for the period 2020-2024; and the MSME sector is emerging as a critical area for strategic and focused attention in our Region’s ongoing efforts to achieve sustainable and inclusive economic growth, and eliminate abject poverty, and inequality. Based on our almost 50 years of experience working in 19 borrowing member countries, including Barbados, we have come to realise that MSMEs across this Region share similar history, experiences, challenges and prospects.
Our intention, therefore, is to continue to craft programmes of support that are available and accessible to all of these countries.
I must also admit to my own personal and longstanding interest in MSMEs’ potential for contributing to economic growth and development, having myself grown up in a family whose livelihood was sustained by small business.
My colleagues at CDB can confirm that I consistently pore through the clippings of local, regional and international newspapers, and other publications in search of new information on MSMEs. The main objective is to broaden my own understanding of what strategies can galvanise the growth of the MSME sector in our neck of the woods, so to speak!
Even as I thank you for offering me this platform, I also seek your forgiveness for taking the liberty of expanding the scope of my mandate to speak, this morning, on the state of MSMEs and their prospects, largely from a regional perspective.
Interestingly, as I prepared for this event, I was reminded of the relative paucity of in-depth studies of the MSME sector in our part of the world, and hence the need for CDB to commission the study entitled “Micro Small Medium Enterprise Development in the Caribbean: Towards a New Frontier.” That 2016 study examined MSMEs in 12 Caribbean countries.
I assure you, ladies and gentlemen, that there is considerable commonality in the structure, experience, and challenges facing MSMEs across our Region. So too are the lessons which inform the appropriate policy responses for this group.
This morning I propose to draw four general conclusions.
II. MSMEs ARE ESSENTIAL FOR CARIBBEAN LONG-TERM GROWTH AND DEVELOPMENT
First, let me underscore the importance of MSMEs.
They are the backbone of the private sector and are key drivers of economic growth, and social inclusion in Barbados. Their importance for this island’s long-term growth and development is undeniable.
According to a survey commissioned by the Small Business Association in 2016, MSMEs in Barbados accounted for approximately 92% of formal enterprises and over 60% of private sector employment. The bulk of these jobs was in small service companies, which were responsible for 34% of private sector employment. MSMEs also accounted for 39% of total exports. In addition, 34% of enterprises had women as the largest owner, while 6% had equal male and female ownership.
Based on findings published in CARICOM’s 2016 Regional MSME policy and reconfirmed in the CDB-financed study, the situation in Barbados is very typical of the rest of the Region. On average, MSMEs contribute 50% of GDP and create 45% of the jobs in our Region.
But their full potential remains unrealised. MSMEs can do so much better.
What is the basis for my conclusion?
If MSMEs account for such a significant proportion of enterprises, and provide the bulk of employment, should we not also expect them to make a bigger contribution to Barbados’ exports?
Certainly if our MSMEs are operating efficiently, then it would be reasonable to assume that they are competitive and have the potential to export.
Therefore, we have to figure out how to unravel those issues that are preventing them from operating more efficiently, more productively and more competitively. If we understand the constraints, we can design workable solutions to unleash this potential and create a business environment in which MSMEs can grow and flourish in a well-functioning market economy.
Because of the size of its contribution to GDP, the performance of the MSME sector is generally a good barometer of the state of the wider economy. Further, because these countries are small and open, there is a strong nexus between our ability to trade and economic growth performance. Therefore, we must first come to grips with the issues affecting MSMEs, before our Region can expect to overcome the challenges of low growth, weak trade and investment, and persistently high poverty and inequality.
The issues, which are constraining MSMEs from realising their full potential are generally well known. A weak enabling environment; high energy and other production costs; limited and poor product/service quality and standards; and limited access to both loan and equity finance are the principal limiting factors.
III. GETTING THE ENABLING ENVIRONMENT RIGHT
This brings me to my second general conclusion this morning. If we accept these limiting factors, then those of us charged with policy-making must be resolute in our advocacy for giving high priority to creating a business-friendly environment within which MSMEs can develop.
The World Bank’s Doing Business surveys benchmark all countries which participate in the yearly exercise against the regulations that affect business performance. In the most recent survey of 190 countries Barbados ranked 129 and the average for the Caribbean was 126, suggesting that, relative to other countries, much work remains to be done to create an environment which is “good for business.”
In many Caribbean countries, there is ample evidence of inadequate legislative and regulatory frameworks; weak public sector institutions for providing legal protection; and inefficient business support and training services. In some Caribbean countries, for example, property registration continues to be time consuming and expensive because property rights are not adequately defined or protected. Bankruptcy laws are often excessively punitive; and severe penalties can confound the willingness to invest in new business ventures. Also, better enforcement of copyright, patents and trademarks is required to provide appropriate protection for businesses and to avoid litigation and copyright infringement.
Then, our Region suffers from prolonged delays in implementing agreements reached under the Revised Treaty of Chaguaramas. Several issues require urgent attention. For example, market access has not improved despite the removal of over 450 legal and administrative barriers to the free movement of goods, services, capital and labour in most CARICOM countries. The establishment of a single jurisdiction to allow for the equal treatment of business entities across CARICOM is outstanding. And a CARICOM business must still register in every jurisdiction in which it wishes to operate! And alien landholding licensing requirements are still in place.
Then, most of the 12 participating CSME countries have failed to enact the requisite legislation that would allow the free movement, of even the ten categories of persons that now have the right to seek employment in other CARICOM member states without the need for a work permit.
These are restrictions which add to the cost and slow pace of doing business, and hamper the extent to which CARICOM businesses can penetrate regional markets.
In the past 15 months, there has been a renewed focus on the CSME. I remain optimistic that accelerated interest in honouring Treaty obligations will follow shortly.
Our Governments must remain committed to improving the business environment and scale up their efforts to create a policy and institutional framework that responds appropriately to the characteristics and special needs of MSMEs. Are the tax regimes and regulatory requirements making compliance costs too burdensome? Or are they incentivising SMEs to remain in the informal sector? Priority must be given to cutting red tape; increasing the transparency and the cost-efficiency of regulations; collecting data on a systematic basis; and adopting stronger evidence-based policies.
During the Budget presentation earlier this year, Prime Minister Mottley gave notice of her Government’s intention to utilise technology to enhance the quality and speed of delivering services via online platforms for clearing imports, submitting planning and development applications, renewing driver’s licenses; obtaining Police Certificates of Character; and paying of taxes. These measures are encouraging enhancements of the business eco-system.
IV. ACCESS TO FINANCE
My third comment this morning directs attention to the difficulty that MSMEs face in accessing appropriate financing.
Because they drive economic growth and job creation, MSMEs can be one of our most potent weapons in the fight against unemployment, poverty and social exclusion. But to play this role effectively, the conditions must be also be “ripe” for them to grow and flourish. We have to give highest priority to creating an eco-system in which MSMEs become more willing to embrace uncertainty and to take risks.
Key to creating this environment is access to finance and financial services. Limited access to credit; the paucity of venture capital; and the generally underdeveloped nature of our Region’s capital markets are troublesome constraints facing MSMEs in Barbados and the rest of the Caribbean. The issue is not simply that funds are unavailable. In fact, even in situations where the financial system is reporting high levels of liquidity, MSMEs struggle to access resources from the banking system at acceptable interest rates.
Diagnostic studies conducted by the Inter-American Development Bank reveal that only 3-5% of Caribbean micro-entrepreneurs have access to financing. Indeed, financial institutions are generally reluctant to lend to MSMEs, because they lack adequate collateral; they operate in unfavourable business environments; or they have limited access to affordable accounting, legal, auditing and other services. According to the study also, MSMEs prefer informal modes of credit, which are relatively easy and cheap to secure. As a result, the uptake of micro-credit has lagged behind expectations.
This suggests that the mainstream financial system, working collaboratively with Government and the business community, may need to consider redesigning their products and offering special mechanisms for enhanced MSME access. These mechanisms could include:
(a) credit bureaux to facilitate the lending institution’s assessment of credit worthiness;
(b) collateral registries to restrict the possibility of fraudulent re-use of collateral;
(c) guarantee schemes, to reduce the risk spread in the pricing of MSME loans by sharing the risk with retail lenders; and
(d) additional financing channels, such as equity funds, angel investor networks and junior stock exchanges.
Let me make special mention of junior stock exchanges as a financing modality to promote the use of equity financing by MSMEs. Junior markets can be found in Barbados, Jamaica and Trinidad and Tobago. Jamaica, with the incentive of a ten-year tax holiday for listing, has the most active exchange. Important lessons can be learned from the experiences of these three junior markets.
One lesson for those countries without junior exchanges is that the legal reforms which encourage MSMEs to raise equity financing by listing their companies on local junior markets must be implemented to facilitate growth and expansion of small businesses.
I strongly recommend that MSMEs formalise their businesses by keeping proper accounting records and adopting sound business practices. The greatest inhibitor to accessing finance, global competitiveness, or even growth is the failure to adopt good business practices.
MSMEs should also register to be members of business support organisations. Across Europe, this is mandatory when registering a business. These organisations, similar to the SBA, lobby on behalf of their members, bring sector issues to the table, and represent their interests in policy discussions. BSOs are also key in capacity building, PPP engagements and making links in new markets.
V. BUSINESS CULTURE/MINDSET
My fourth point is with respect to changing the business culture and mindset. “The Biggest mistake that a small business can make is to think like a small business.”
I am not sure to whom I should give credit for this quote, but it describes succinctly the mindset needed for successful MSMEs and should be included, alongside effective business planning, good financial management, continuous marketing, and excellent customer service.
MSMEs are simply the incubators for most large businesses. So you must be able to visualise the company having the DNA of an elephant, as the distinguished Barbadian management consultant and newspaper columnist, Dr. Basil Springer would characterise it. Such a company would be capable of operating outside the narrow geographical confines of Barbados. With increased trade we can expect more jobs, higher economic growth and increased prosperity.
“Thinking big” will open up new opportunities for MSMEs to compete on the international market by becoming part of a regional value chain. The theme for this Conference, “Small Size, Big Thinking – Changing the Mindset for Global Engagement” says it well!
The attractiveness of this strategy is substantiated by the achievements of several large, medium and small Caribbean enterprises, which have grown their businesses by moving cross-border to other regional and international markets.
Companies like these become large by embracing behaviours and practices that engender superior levels of production efficiency and cost effectiveness. The regional market alone gives MSMEs immediate access to just over 18 million consumers under the CSME arrangement. Firms which are incapable of competing in the local and/or regional markets and do not employ good international business practices will not graduate to the world stage.
With duty and quota free access for most of our goods and services under the CARIFORUM-EU Economic Partnership Agreement, the European Union still offers a relatively protected market for regional MSMEs to hone their competitiveness skills prior to venturing onto the wider unprotected world market.
VI. CARIBBEAN DEVELOPMENT BANK
I have said quite a bit, this morning, about what needs to be done in the eco-system to support MSMEs in our Region. It would be remiss of me to discuss the development role and impact of MSMEs without mentioning my own institution.
So before I close, let me quickly recap CDB’s own contribution to supporting MSME development.
Our strategic posture is informed by three general principles:
(a) CDB’s operations should increase the flow of capital into BMCs for the benefit of MSMEs;
(b) We should use our interventions to enhance financial intermediation and develop regional and sub-regional capital markets; and
(c) CDB should cooperate and build alliances with other financial institutions, including multilateral institutions, to increase the overall impact of assistance to MSMEs.
Within this operating framework, since 2015, we have committed US$30 million and disbursed US$20 million to over 900 firms for private sector development. Going forward, our focus is on ramping up our engagement with the Barbadian and Caribbean-wide private sector whilst maintaining the high credit quality of CDB’s banking function.
There is scope and need for CDB to continue to intermediate funding to MSMEs through public and privately-owned financial institutions. However, careful attention will have to be paid to the pricing of our funding through the privately-owned institutions, in particular, to ensure that their on-lending rates are competitive.
We are determined to increase our involvement with MSMEs and to play an even bigger role in unleashing their potential. In this regard, we have embarked on some innovative approaches to attract additional financial flows for our MSME programme. In 2018, for example, we launched the multi-donor Cultural and Creative Industries Innovation Fund (CIIF) with start-up capital of U$2.6 million. There is no shortage of demand for CIIF which provides grants and technical assistance to MSMEs in order to encourage innovation and job creation in the creative industries.
Our most recent proposal is to mobilise additional financing which can be used to derisk lending to MSMEs by providing partial credit guarantees to financial institutions. Additional technical assistance will be offered to assist MSMEs in bolstering their creditworthiness by developing suitable marketing and business plans and ensuring that proper accounting systems are in place. This initiative is to be executed through the Caribbean Consultancy Technological Services, our main mechanism for delivering professional services to MSMEs. It is a small programme of direct technical assistance, workshops, and training attachments; but it delivers big results with huge impact!
VII. CONCLUSION
In closing, I wish to point out that the current business environment, while still being difficult because of weak global growth, has presented us with a window of opportunity in the form of increased funding for MSMEs.
CDB remains committed to supporting the development of MSMEs in Barbados and the rest of our Region. We are giving high priority to financing and promoting initiatives that enhance their competitiveness. And we are relying on institutions like the Small Business Association to help us design programmes that are better targeted for MSMEs to drive economic growth and employment creation in Barbados and the wider Caribbean.
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Business Events
The Global Business Leader Charity Golf Tournament – Jamaica November 2025
Published
1 month agoon
October 4, 2024The Global Business Leader Charity Golf Tournament is set to elevate the intersection of business and sport like never before. Golf has rapidly become a favorite pastime among executives, and this event marks the first of its kind in this unique format, debuting in Jamaica in November 2025, with plans to expand globally.
Bringing together top executives from around the world (with special focus on Africa, Asia, Europe and Caribbean), this prestigious tournament will see them compete across three world-class courses over five thrilling days, all vying for the coveted title of “Best Global Business Leader Golfer.” With global bragging rights on the line, this is more than just a game—it’s a chance for companies, employees, and fans to rally behind their business leaders in a high-stakes competition.
Get ready to witness business leadership meet competitive golf on a global stage in November 2025!
For More Information please email info@asterixtourism.com or contact
Roy Page for Player Registration, Accommodation, charter flights and logistics – 876-781-7588
Peter Lindo for Competition execution and management – 876-8159700
Aldo Antonio Muir for Marketing, Promotions and Sponsorship -876-542-3719
Business Insights
Should Social Media Influencers Use Agents to Negotiate on Their Behalf? A Look at Industry Disparities and Best Practices
Published
1 month agoon
October 3, 2024In the fast-growing world of social media influencers, the challenges of negotiating brand deals and securing fair compensation are becoming increasingly evident. Jamie Hamilton’s experience as a style influencer is a case in point. Like many new creators, she negotiated her first big brand deal alone, believing she had secured a good rate. However, she later discovered a fellow influencer on the same campaign, with similar follower numbers, was paid significantly more. The difference? Her colleague had professional representation, while Hamilton did not.
As the influencer marketing industry is projected to hit $24 billion by the end of 2024, with further growth expected in the coming years, the question of whether influencers should hire agents or negotiate independently has gained prominence. While some creators navigate this landscape on their own, others rely on professionals to secure deals, leading to a wide disparity in earnings and opportunities.
The Wild West of Influencer Marketing
Influencer marketing, despite its maturity, remains highly unstructured. Creators act as independent contractors, with no official market rate for content creation or promotion. Pay secrecy is widespread, and there is little transparency in how brands assign value to influencers. This lack of standardization has resulted in significant pay disparities, particularly among marginalized groups.
For example, reports show that plus-size and Black influencers often receive lower compensation than their peers despite similar audience sizes and engagement rates. Hamilton’s experience with pay inequality is echoed by numerous influencers, revealing a consistent pattern of underpayment for creators who do not fit a brand’s traditional image.
The lack of formal structures means that influencers often operate without the legal protections or support systems typical in other industries. Creators frequently face rapid rises and falls in their careers, with little recourse if brands decide to pull back from campaigns or cut budgets. Additionally, child influencers — some of the youngest in the field — face precarious working conditions, with only two U.S. states requiring parents to set aside a portion of their earnings.
The Role of Agents in Leveling the Playing Field
Given these challenges, many influencers are turning to agents and managers to represent their interests and navigate the complexities of brand partnerships. Agencies and management firms provide several advantages, including:
Negotiation Expertise: Agents bring a deep understanding of industry standards, brand expectations, and market rates, allowing influencers to secure more lucrative deals. They can effectively push back on low offers and demand fair compensation for their clients’ work.
Brand Connections: Agents often have established relationships with brands, PR agencies, and marketing firms, which can lead to higher-quality partnerships and more consistent deal flow.
Contract and Legal Protections: With formal representation, influencers can ensure their contracts include clauses that protect their intellectual property, likeness, and creative control. These professionals also help navigate potential legal pitfalls.
Leveling Disparities: For influencers from marginalized communities, agents can help address pay gaps by advocating for equitable compensation based on reach, engagement, and audience influence — rather than appearance or background.
Some agencies, such as Gleam Futures and Digital Brand Architects, have built reputations for representing top-tier influencers and securing multi-million-dollar deals for their clients. These agencies act as intermediaries, positioning influencers for long-term success while handling the complexities of contracts, fees, and negotiation.
Best Case Examples
A notable case involves Chiara Ferragni, a fashion influencer with over 29 million Instagram followers. Ferragni, who is now considered one of the most successful influencers globally, has representation through a top-tier management firm that helped her grow her brand into a multi-million-dollar business, complete with her own fashion line and global endorsement deals. Ferragni’s success is a clear testament to the power of having expert negotiators who can leverage influence for greater financial gain.
Another example is Jackie Aina, a beauty influencer and advocate for diversity in the beauty industry. Aina has consistently used her platform to push for inclusion, and through her representation, she has managed to negotiate higher-paying, more meaningful partnerships that align with her values. Aina’s success in securing deals with top beauty brands demonstrates how professional management can help influencers amplify their impact while ensuring fair compensation.
The Argument Against Agents
Despite these benefits, not all influencers see the need for agents. Some creators prefer to maintain control over their brand and business, fearing that agents might dilute their creative voice or charge hefty fees. While top influencers may find it easier to secure representation, smaller creators might struggle to justify the cost of hiring an agent, especially in the early stages of their careers when cash flow is uncertain.
Additionally, some influencers have successfully built their businesses through direct relationships with brands. For instance, Emma Chamberlain, a YouTube sensation, initially negotiated many of her deals on her own before eventually bringing in professional representation as her career expanded.
The Future of Influencer Marketing
As influencer marketing continues to grow, the debate over professional representation is likely to intensify. With the industry projected to contribute significantly to the U.S. economy by 2027, creators will face mounting pressure to formalize their operations, especially around issues of compensation and intellectual property. As Alicia Clanton pointed out in her extensive report on the industry, influencers are now key players in shaping public opinion, consumer behavior, and even political outcomes. This level of influence demands more structure and accountability.
For now, creators must decide whether to go it alone or seek professional representation. While hiring an agent might not be feasible for everyone, the benefits of having experienced negotiators at the table cannot be ignored — especially in an industry where pay disparities are rampant, and deals can be as unpredictable as they are profitable.
Ultimately, the choice may come down to the influencer’s long-term goals: Do they want to maximize short-term profits, or are they focused on building a sustainable, lasting brand? For many, the answer could well involve an agent’s helping hand.
Businessuite News24
Corporate Movements – September 2024
Published
1 month agoon
September 21, 2024Spur Tree Spices Jamaica Limited (Spur Tree Spices) is pleased to announce the appointment of Mr. Kareem Tomlinson, as a Non-Executive Director with effect from September 15, 2024. Spur Tree Spices also wishes to advise that Mr. Kareem Tomlinson has been appointed to serve as a member of the Audit & Risk Committee as from September 19, 2024.
Wigton Windfarm Limited trading as Wigton Energy (“WIG”) has advised that it has appointed Mr. Norman Naar as WIG’s Chief Commercial Officer effective September 16, 2024. This new appointment comes in the wake of the changes that were made to the leadership and organizational chart in August 2023 and specifically related to the job position of Business Development and Innovation Manager, which job title has been changed to that of Chief Commercial Officer.
iCreate Limited, formally announces the appointment of Dr. Nick Rowles-Davies to the Board of Directors of iCreate Limited, effective September 9, 2024. Dr. Rowles-Davies will also assume the roles of Chairman of the Corporate Governance Committee and Chairman of the Investment Committee. His appointment is a critical part of our planned transition from iCreate Limited to Kintyre Holdings (JA) Limited, as we build a world-class diversified investment holding company.
iCreate Limited is pleased to announce the appointment of Rochelle Burnett as Chief Operating Officer (COO), effective immediately. Rochelle Burnett brings over a decade of experience in the digital and creative industries, with a strong background in operations and project management. Her career has included leadership roles at Tiny Robot Solutions, Muse 360 Integrated Limited, and Toucan Limited, where she managed major projects for leading brands such as Guinness, Heineken, GraceKennedy, and Grupo Campari.
Medical Disposables & Supplies Limited (MDS) is pleased to announce that, effective August 13, 2024, Mrs. Sheree Martin was appointed as a Non-Executive Independent Director of the Company’s Board of Directors. Mrs. Martin has also been appointed as a member of the Audit and Compliance Committee and the Compensation and Human Resources Committee. MDS also wishes to advise that Mr. Christopher Williams has been appointed as Mentor to the Board of Directors, with an effective date of August 13, 2024.
Mr. Ian McNaughton, has joined Fosrich Company Limited’s executive team as Chief Operating Officer, reporting to the Managing Director, overseeing the daily operations of the stores located throughout the island among other responsibilities. Mr. McNaughton holds a Masters in Business Administration and a BSc. in Management Studies. Prior to joining Fosrich Company” Limited, he held senor positions in several. Private sector organizations.
LASCO Distributors Limited (LASD) has advised that Mrs. Hortense Edwards, a Senior Manager resigned from the Company, effective September 13, 2024.
Businessuite News24
The Digital Business Roadmap for Jamaican MSMEs: A Critical Path to Digital Transformation
Published
1 month agoon
September 21, 2024Micro, Small, and Medium Enterprises (MSMEs) play a crucial role in the economic landscape of many countries, including Jamaica. As the global economy continues to evolve, driven by rapid technological advancements, it is important for MSMEs to embrace digital transformation to remain competitive and sustainable. This blog explores the concept of digital business, the importance of digital transformation for MSMEs in Jamaica, and provides a roadmap for achieving this critical transition.
Defining MSMEs in the Jamaican Context
In Jamaica, MSMEs are defined based on their number of employees, annual turnover, and total assets. According to the Ministry of Industry, Investment and Commerce (MIIC), micro enterprises have fewer than 5 employees and an annual turnover or total assets not exceeding JMD 10 million. Small enterprises employ between 5 and 20 people with an annual turnover or total assets between JMD 10 million and JMD 50 million. Medium enterprises employ between 21 and 50 people and have an annual turnover or total assets between JMD 50 million and JMD 150 million.
Understanding Digital Business
Digital business involves leveraging digital technologies to create new value in business models, customer experiences, and the internal capabilities that support core operations. The theoretical framework behind digital business is rooted in the integration of digital technologies such as the Internet of Things (IoT), artificial intelligence (AI), big data analytics, and cloud computing to enhance business processes, improve efficiency, and drive innovation.
Digitization, Digitalization, and Digital Transformation
To understand the journey towards a digital business, it is important to distinguish between digitization, digitalization, and digital transformation:
Digitization
This is the process of converting analog information into digital formats. Digitization in many ways is the first phase of any effort to digitally transform your business. However, it comes with its own set of challenges, especially for MSMEs in emerging markets like Jamaica. The two primary costs MSMEs will have to account for are technology investment and user training. The cost of acquiring the necessary technology (e.g., scanners, computers, and software) to digitize records can be difficult for small businesses, who mostly operate on tight budgets and may find it challenging to allocate funds for such investments. User training often involves upskilling the employees of the to use new digital tools and processes effectively. This training requires both time and money, which can strain the resources of small businesses. These challenges can hinder progress and make the initial steps towards digital transformation more complex and resource-intensive.
Digitalization
If you are able to successfully digitize your business, this increases the likelihood of the next phase of this journey, digitalization. This refers to the use of digital technologies to change a business model and provide new revenue and value-producing opportunities. This involves using digital technologies to change business models and create new value-adding opportunities.
One of the primary challenges with digitalization lies in integration complexities. Many small businesses operate with legacy systems that are not easily compatible with modern digital tools and platforms. Integrating these new digital systems with existing ones can be technically complex and expensive, often requiring specialized IT expertise. Additionally, data stored in different formats or locations can create silos, which make it difficult to establish a unified and streamlined digital workflow. Addressing these silos often necessitates substantial restructuring of existing processes, adding further complexity to the digitalization journey.
Another significant challenge is change management. Employees and management might resist new digital processes, particularly if they are comfortable with the traditional ways of doing things. This resistance can slow down the adoption of digital tools and diminish the effectiveness of digitalization efforts. Moreover, moving from analog to digital processes often requires a cultural shift within the organization. Encouraging a digital-first mindset among employees can be difficult, especially in organizations where traditional methods are deeply ingrained.
The skills gap also poses a considerable challenge during digitalization. This activity typically demands a higher level of technical expertise than digitization. Employees may need to acquire new skills to effectively use digital tools, analyze data, and manage digital workflows. However, finding or developing these specialized skills can be a significant hurdle for many MSMEs, particularly in regions where access to advanced training and education is limited.
Digital Transformation
This is a comprehensive, strategic approach that leverages digital technologies to fundamentally change how an organization operates and delivers value to its customers. Achieving digital transformation in a business requires a holistic approach that involves integrating technology, people, processes, and culture. To successfully achieve digital transformation, a business must start by developing a clear vision and strategy. This involves defining what digital transformation means for the organization and setting measurable goals that align with overall business objectives, such as improving customer experience, boosting operational efficiency, or expanding into new markets. Creating a detailed roadmap with specific timelines, milestones, and resources is essential for guiding the transformation process.
Fostering a digital-first culture is equally important. Leadership must drive the initiative, committing to the transformation and promoting a digital mindset across the organization. Engaging employees early in the process through training and development opportunities is crucial to help them adapt to new tools and encourage a culture of continuous learning and innovation.
Investing in the right technology is another critical step. Businesses should choose scalable solutions, such as cloud-based platforms, data analytics tools, and automation technologies that can grow with the company and streamline operations. It’s essential to select technologies that integrate well with existing systems to ensure a smooth transition. Optimizing processes is also key to successful digital transformation. Before implementing new technologies, businesses should assess their current processes to identify inefficiencies and areas for improvement. Automating repetitive tasks can save time, reduce errors, and allow employees to focus on more strategic activities.
Collaboration is vital in this journey. Digital transformation often requires cross-departmental collaboration to identify challenges and develop solutions. Encouraging teams to work together ensures that digital initiatives are aligned with business needs. Additionally, forming external partnerships with technology providers, consultants, and other businesses can accelerate the transformation process by providing access to new technologies and expertise.
Ensuring data security and compliance is critical as the business becomes more digital. Investing in robust cybersecurity measures protects data and systems from threats, while compliance with relevant regulations, such as data protection and privacy standards, is necessary, especially when handling sensitive customer information. Monitoring and adapting the transformation process is essential for success. Businesses should continuously track their progress using data and analytics to measure performance against goals. Being flexible and ready to adjust strategies based on feedback, new developments, and changing market conditions is vital for ongoing improvement.
Leveraging government and private sector support can also provide significant advantages. Many governments offer grants, tax incentives, or other support for businesses undergoing digital transformation. Collaborating with industry associations and private sector partners can offer valuable resources, training, and networking opportunities, helping businesses stay informed about the latest trends and best practices. Engaging customers in the transformation process is another important step. As new digital tools are implemented, businesses must ensure that customers understand how to use them by providing clear instructions, tutorials, and support. Regularly collecting customer feedback allows businesses to continuously improve their digital services, ensuring they meet customer needs.
Finally, planning for continuous improvement is crucial. Digital transformation is not a one-time project but an ongoing process. Regularly reviewing and adjusting the digital strategy helps businesses stay competitive and responsive to changes in the market. Staying informed about the latest trends in technology and digital business enables companies to anticipate changes and opportunities, ensuring they remain agile and innovative in a rapidly evolving digital landscape.
The Need for Digital Transformation in Jamaica
Jamaica’s Vision 2030 aims to make the country the place of choice to live, work, raise families, and do business. Achieving this vision requires a robust digital economy where MSMEs can thrive. Digital transformation is essential for MSMEs to improve efficiency, expand market reach, and enhance customer experiences. According to the Global Competitiveness Report 2019 by the World Economic Forum, Jamaica ranks 80th out of 141 countries in ICT adoption, highlighting the need for significant improvements in digital infrastructure and capabilities.
The Way Forward for MSMEs
Crafting a digital business roadmap requires careful planning and a thoughtful approach to several key factors. First, it’s essential to understand and address the evolving needs and preferences of customers in the digital age. Ensuring that digital initiatives can scale as the business grows is also critical, allowing for adaptability and responsiveness to market demands. Sustainability should be a central focus, with continuous updates and optimization of digital technologies to support long-term success. Collaboration is another crucial element, as leveraging partnerships and alliances can significantly enhance digital capabilities.
In conclusion, the digital business roadmap for MSMEs represents a vital strategy for achieving sustainable growth and competitiveness in today’s economy. By embracing digital transformation, MSMEs in Jamaica can unlock new opportunities, improve efficiency, and deliver enhanced customer experiences, ultimately contributing to the broader goals of Vision 2030.
© Germaine A. Bryan, 2024
Germaine Bryan is a business developer and startup coach supporting startups and MSMEs. Germaine is a skilled tactician in strategic business planning and has helped hundreds of entrepreneurs build their capacity to operate at scale. Germaine is the Managing Principal of Gerbry Business Ltd. For enquires. please email: germaine@gerbry.business
Businessuite News24
Jamaica Successfully Concludes 18-Month IMF Programme
Published
2 months agoon
September 14, 2024Jamaica has successfully completed the 18-month International Monetary Fund (IMF) programme under the Precautionary and Liquidity Line (PLL) and Resilience and Sustainability Facility (RSF).
Economic Programme Oversight Committee (EPOC) Chairman, Keith Duncan, said the IMF Executive Board concluded the third and final reviews on August 30.
“The PLL continues to be treated as precautionary and the completion of the reviews allow for an immediate disbursement of US$980 million under the PLL and US$258 million under the RSF, which was drawn on by the BOJ (Bank of Jamaica) on September 4, 2024,” Mr. Duncan explained.
He was addressing Friday’s (September 13) EPOC Quarterly Press Briefing, which was held virtually.
Mr. Duncan said that all structural benchmarks were achieved and the BOJ exceeded the indicative target for net international reserves.
“A target that was narrowly missed due to a smaller-than-expected surplus at March 31, 2024, had a negligible impact on the debt consolidation plan,” he noted.
Meanwhile, Mr. Duncan said the Fiscal Commission is to commence operation in the calendar year 2025.
The Commission, which will be the guardian and interpreter of Jamaica’s fiscal rules, will monitor compliance with these, report on outcomes and keep the public informed by providing independent analysis on fiscal policy developments.
In March 2023, Courtney Williams was sworn in as Jamaica’s first Fiscal Commissioner.
By: Judith A. Hunter, JIS
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