FROM year to year, there has been talk of stimulating and expanding small businesses. The State has often placed substantial resources into this sector such as extending banking facilities and training those who may wish to enter business, including small manufacturers.  Many scores, if not hundreds of persons, were helped to make business plans.  But these efforts never fructified into the prosperity and economic impact they were expected to achieve.

All these efforts are guided by the old formula that every productive process and business is the result of what economists term the agents of production – Land, Labour, Capital and Entrepreneurship.  The meaning of these terms are well-known and needs no elucidation.  The only one which may need some slight elucidation is Entrepreneurship.

Entrepreneurship is generally interpreted to mean managerial ability, ability to assess business risks and courage to take them.  The managerial ability would include the ability to successfully deal with labour and the raising of capital.  Marketing and dealing with the markets, though they have a close relationship to entrepreneurship, is often separated from it since it requires a number of distinct professional skills.

The State and private sector have both, over the years, made efforts to help and stimulate small businesses.  For example, the private sector, led by Dr Yesu Persaud, founded IPED in the 1980s as a lending agency for small businesses.   IPED’s successes have been quite impressive and it has been responsible for creating thousands of jobs.  But it has very rarely helped a small business promoter who had very little more than a brilliant business idea but no capital to start up the business.  Over the years, the government has founded such institutions as the Guyana National Co-operative Bank and the Agricultural Bank to try to stimulate small industries, small farms and other businesses and hundreds of millions of dollars were spent in such efforts.  These efforts were never crowned with any notable success.

More recently, the government has established the Small Business Bureau (SBB) under the leadership of Dr Lowell Porter.  Dr Porter has been able to establish “help desks” in all the Regions.  These help desks, in the words of the SBB’s Marketing Officer, are to help “persons access information and to garner assistance with completing bureaucratic forms and other documents necessary to access the services of SBB”.  Dr Porter, when he spoke with the press in December last year, said that small contractors and other businesses would be given 20% of governmental contracts and that the SBB has been facilitating loans from Republic Bank and Guyana Bank for Trade and Industry (GBTI) and that over the last four years, over $1B has been disbursed to small businesses.  The delinquency rate has been very low, that is less than 1%, but the rejection rate of applicants by the Banks has been approximately 50%.  Dr Porter has been asking the Banks to treat small business applicants more favourably.

Despite these and other efforts to stimulate the establishment of small businesses, the level of success has been rather poor.  Paradoxically, these efforts could not be faulted.  Why, therefore, have these efforts not resulted in the expected success?
These efforts, as pointed out above, operated within the paradigm of ‘Land, Labour, Capital and Entrepreneurship’ and it was assumed that once these requirements were satisfied, then success must inevitably follow.  This was the assumption of promoters of small businesses as well as politicians and even economists.

In our view, the missing element in this traditional formula was a human one.  That element could be gleaned from Professor Tawney’s writings on the Industrial Revolution and particularly in his groundbreaking book “Religion and the Rise of Capitalism” which was published over a century ago.  In his book, he pointed out that Protestant groups such as the Quakers, who were prominent leaders of the Industrial Revolution, believed in such virtues as abstemious living styles, saving, hard work, investing and often operated as families in their business ventures.  Their motto was “Heaven did not want the failures of the Earth.”

Professor Tawney’s thesis tended to be given further credence by the experience of 19th century Guyanese:  The Village Movement, as an economic venture, was successful because of the human element.  During the latter years of slavery which permitted “Sunday Markets” and the seven years of Apprenticeship following Emancipation, these Afro-Guyanese freedmen, at great sacrifice, saved their small stipends and when the opportunity came, invested their savings in the purchase of abandoned sugar estates.  As landed proprietors, they began to invest in small farms which generated income and created a village economy when they built several thousand houses.  In these economic efforts, families and close friends were fully involved in investing their small savings and giving of their labour.

The 19th-century indentured immigrants, the Chinese, Portuguese and Indians, had analogous experiences to the Afro-Guyanese freedmen.  They were brought to the colony in semi-slavery conditions and were paid very poor wages.  At great sacrifice and privation, they were able to accumulate some savings which they began to invest in small farms, shops and trades like tailoring.  In all these small economic ventures, or as they are called today “small businesses,” the entire family was involved and contributed.  It was these freedmen and indentured servants who created the non-sugar economy of 19th century Guyana and they did so by personal and unstinted dedication to the small businesses they were starting, risking all their small savings, and families being fully involved in such ventures.  The human element we have described is not encapsulated in today’s “Entrepreneurship”.  In other words, though successful 19th century small businesses in Guyana did have the traditional four elements of production,  they also did have that specific “human” element which we described.

The various socio-cultural groups in the country could usefully socialize their constituents of the “human element” they have to contribute if they expect to go into small businesses.  In other words, the agencies and organizations which are promoting small businesses could help to ensure success by ascertaining that their clients are personally dedicated to personal success, are socialized in saving, that  they would be making maximum investment of their personal funds,  that they are prepared to work long hours and not an eight-to-four day, and that they have family support and involvement.  If this “human element” is there in those embarking upon small businesses with institutional help, the numbers of successes would rise exponentially.