Introduction
W. Arthur Lewis, Caribbean Nobel Laureate in economics, writing in the 1950s, suggested that the region needed to industrialise to survive, as small size and population growth meant that agriculture alone could not sustain the development of the region (Lewis 1950). The belief was that a lack of entrepreneurship and risk-averseness would mean that the region needed to look to the metropole for investors, who, in Lewisâ vision, would then pass on the âtricks of the tradeâ of doing business to indigenous entrepreneurs (Downes 2004). This has not occurred, at least not in the mode of Lewisâ vision, and over six decades later, one could argue that the regionâs business landscape is one dominated by a domestically focused micro, small, and medium enterprise (MSME) and family-owned business (FOB) private sector. The need to âindustrialiseâ, in its widest sense, still applies to the region, but first we need to understand the reality of the Caribbeanâs MSMEs and FOBs. To this end, this book seeks to provide insights into the historical development of these businesses in the region; how they plan and operationalise succession; and how they finance, grow, and develop their markets. We are of the view that it is only with such a holistic understanding we will be able to develop a pathway to sustainable enterprise development in the region. Indeed, the lessons for âindustrialisationâ does not have to come from outside, but can be honed from the accumulated lessons from successful businesses in the Caribbean region.
Far removed from the 1950s and the articulation of different development models, such as Lewisâ industrialisation by invitation (IBI), declarations such as âMSMEs are the engines of growthâ and âfamily-owned businesses form the economic foundation of many economiesâ have become common lines in speeches by persons in both the private and public sectors across the Caribbean. The formulation of MSMEs policies in Caribbean countries such as Barbados, Jamaica, and Trinidad and Tobago could be interpreted as points of convergence in mobilising their citizens around a common vision of MSMEs. This is not difficult to understand, since the literature on both concepts seems to converge in shared characteristics, such as centrality of owner/manager, informal structure, resource constraints, vulnerability to externalities, limited product/service range, and internally focused (Daily and Dollinger 1993; Gersick et al. 1997; Stokes and Wilson 2010). It is clear from the utterances of politicians and policy-makers across the English-speaking Caribbean (ESC) that FOBs fall into the category of MSMEs. In the case of Jamaica (Jamaica-MIIC 2013), FOBs are categorised as a subset of MSMEs, while the views expressed by Barbadosâ Industry Minister might capture the sentiments of many across the ESC:
âBig businessâ is no longer being seen as the main driver of the Barbadian economy, as more family-owned enterprises are emerging as the âmain plank on which the modern economy hingesâ. (Blackman 2013, para. 1)
âWhat are family-owned businesses?â and âhow do we define micro, small, and medium enterprises?â are natural outflows from the foregoing. These are critical questions in the current discourse, in the journey towards an understanding of the Caribbean enterprise, informed by insights from FOBs and MSMEs. But these questions are not necessarily easy to answer, since there is no consensus on a definition for either FOBs or MSMEs. This lack of consensus is puzzling, given the stated importance of both FOBs (The Economist 2014) and MSMEs (Beck et al. 2005) in the economic development of many countries. This lack of consensus could also be linked to the different contexts in which FOBs and MSMEs operate. That is, though there is similarity in the structure of FOBs and MSMEs, they cannot be considered homogeneous, as expressed in the following:
Clearly, it is inappropriate to view private family firms as a single homogeneous entity. Family firm researchers should be aware that the failure to recognise contrasts between âtypesâ of family firms might impact on the validity and the generalizability of research evidence. Policy-makers and practitioners should consider the specific needs of different âtypesâ of family firms. (Westhead and Howorth 2006, 194)
In short, context matters and national policy choices are the ultimate determinant of economic growth (Rodrik 2007). So, while there might be a single economics, there are many recipes. We contend that the appropriate recipe for the ESC region must be context-specific, informed by history and by data from the region. Many have joined in helping to provide this in the area of family business research (Nicholson 2010; Rahael 2006; Williams and Jones 2010). But despite the growing significance of FOBs in the Caribbean region, the poverty of scholarship in the area of family business research continues (OâNeal 2014). This book uses the insights gleaned from an examination of MSMEs and FOBs in the ESC,1 in helping to understand the Caribbean enterprise.
As we seek to provide insights and be as accessible as possible, we take a basic approach to the analysis with respect to the production and presentation of data. When we speak of âsignificanceâ, we use basic test statistics such as the t-test and Chi-squared test to demonstrate that it is probable that the results are representative of the general population; we leave the higher-level statistical analyses for other forums, since the purpose of this book is not to engage the reader in specialised areas such as finance or marketing, but to provide a general understanding of the Caribbeanâs MSMEs and FOBs. We also use a number of real-life examples to provide contextual relevance, although we anonymise the identities of firms and personnel.
The rest of the chapter provides the context of the discussions throughout the book, followed by discussions of definitions for MSMEs and FOBs and a justification for a study of both. A global view of both MSMEs and FOBs, especially to provide a context for comparison, is followed by a discussion on the current landscape of MSMEs and FOBs in the ESC.
Context
The Caribbean region is made up of 26â30 countries, depending on definition, and one that is dominated by small island developing states (SIDS), which are exposed to the twin vulnerabilities of economic and environmental exposure. The region is a rich melting pot of different cultures, languages, and ethnicities. The ESC, formerly referred to as the British West Indies, is a subset of the block of countries that form the Caribbean region, and the focus of this book. For the purpose of the current discourse, the 12 countries that make up the ESC are Antigua and Barbuda, the Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica, St Kitts and Nevis, St Lucia, St Vincent and the Grenadines, and Trinidad and Tobago.2
With independence commencing in Jamaica and Trinidad and Tobago in 1962, the countries of the region are mostly young states, with the challenges of self-governance, and a growing, vibrant, and independent private sector, as they move from an era of preferential trade agreements for its primary products to one of open trade liberalisation and the emergence of services. These particular idiosyncrasies of the Caribbean suggest that the reality of âdoing businessâ in the region is different from what exists in North America or Europ...