Business Page – October 21st, 2001


Entrepreneurship - The Engine of Growth

 

Introduction

Anyone familiar with the economic difficulties through which Guyana passed in the seventies and eighties would not be surprised at the success of Guyanese business persons in the Ernst & Young Entrepreneur of the Year 2001 Programme. For close to two decades so-called informal entrepreneurs were demonstrating true entrepreneurial grit by taking all kinds of Guyanese products abroad and returning with "banned items" of which flour, bread and toilet paper became a negative symbol. Unfortunately in that period the policy was not only to discourage but to penalise and criminalise entrepreneurship, treating its practitioners as enemies of the State and worse than drug dealers.

State Dominance

Meanwhile the State - usually the least enterprising sector in any economy- took charge and under the concept of party paramountcy, the country's leading companies and sectors came under the control of politically dominated boards with the CEO's often operating at best at the level of middle managers. To compound the problems "profit", the lifeblood of a business was considered a bad word, eliminating one of the most important incentives and measures of business success. Through all sorts of devices including misguided economic policies, stifling bureaucracy, bungling and incompetent management and soul-destroying corruption, a band of entrepreneurs comprising what was then regarded as the parallel economy, took it on themselves to keep the economy afloat if not moving forward.

Entrepreneurs Of Necessity

With no foreign exchange available through the official banking system, America Street responded by providing money-changers from whom US Dollars in particular could be acquired delivered here in Guyana or at an address abroad. Interestingly, those arrangements were invariably honoured certainly by the more reputable dealers, many of whom now operate licenced Cam bios.

The collapse of the road transportation system spawned the advent of the mini-bus and it may escape our memory that one of the country's top businessmen began his path to success and honed his entrepreneurial skills with two buses on the West Demerara. With a decreasing range of items on the stores shelves, a number of women in particular turned to trading and for better or worse set up shop on the pavements and then onto the streets, often directly in front of long established trading houses. The unfortunate result in many cases was that a number of these trading houses went into decline and eventually disappeared.

Another remarkable piece of modern entrepreneurship made Business Page possible. David DeCaires, a leading corporate attorney gave up a lucrative law practice to set up the Stabroek News when former President Hoyte, following the death of his predecessor, introduced his brand of perestroika to Guyana. To have successfully established two separate businesses makes Mr. DeCaires one of this country's truly remarkable entrepreneurs.

Support

Business Page makes these points to emphasise the importance - both negative and positive- of government policies. Even in the poorest country, there will be opportunities for the truly enterprising person. But a country needs not only a few outstanding entrepreneurs but a strong economy driven by policies that allow many businesses to thrive. Former Vice-President Al Gore recognised this in his letter to the Chairman of the Ernst & Young Entrepreneur of the Year Institute when he wrote "Providing effective support for the entrepreneurial economy has been a key component of our Administration's policy over the past six years. Thousands of new businesses and hundreds of thousands of new jobs that entrepreneurs have created during this period have contributed significantly to the economic revival of communities across the country"

Notables

Entrepreneurship of course is not new to Guyanese and we have excellent examples of men who have demonstrated vision, courage, determination, adaptability and business judgment in establishing businesses that last. The name that comes immediately to the fore is the late Peter D'Aguiar, the founder of Banks DIH who also set up a highly successful brewery in Barbados. The John Fernandes empire which began in the earlier part of the last century continues to expand creating opportunities for second and third generation Fernandes.

Mr.Yesu Persaud who celebrated his seventieth birthday several months ago, combines leadership and entrepreneurial skills and in launching new initiatives including the Demerara Bank Limited he demonstrated the same restive energy that makes DDL such a successful company. Some would ask if Mr. Persaud is indeed so good why did GA2000 fail so soon after he led a group of Guyanese investors into the venture. The real reasons are yet to be clear but there is no doubt that the airline was woefully under-capitalised and could not survive the setbacks for which this highly volatile industry is well known. It also underlines the fact that not all initiatives will succeed and that entrepreneurs do make mistakes.

Mr. Kayman Sankar, the Ultimate Rice Magnate, whose pioneering efforts revolutionised the rice industry and made him into an icon courted by politicians and bankers alike, provides is an example of the proverbial rags to riches story. The problems which his legacy are now going through are well known and it is a matter of speculation whether those have anything to do with the issue of succession planning or cyclical difficulties facing the sector.

The forestry sector too has been characterised by entrepreneurship while in gold the pioneering spirit of the pork-knocker is legendary. Times have changed and many of our first generation entrepreneurs are no longer around while in the case of the forestry sector and mining, the increasingly high standards demanded by the marketplace leaves little room for the small entrepreneur.

Misconceptions

One of the misconceptions about the entrepreneur is that he is a maverick: a wild risk taker who is more of an individual than a team-player but our group does not conform to that inaccurate stereotype. When we take a look at these persons, who are without doubt la crème de la crème of our business class, it can be seen that like all entrepreneurs they have been forced to overcome obstacles that would deter the average individual. This is the true essence of entrepreneurship which when linked with vision, unswerving commitment to quality and single-mindedness of purpose produces the legacies left by these persons. They have built businesses which, while bearing their mark, have long left the realm of the sole trader and have evolved into entities of substance.

The real entrepreneur is not a gambler but one who seeks out opportunities and pursues them with evangelical favours. Where the risk lies is the fact that starting a business is generally only feasible in industries where there are usually no barriers to entry, no brand or other proprietary asset and where failure could be costly if not fatal. In Guyana we have a very unsophisticated financial market and unlike the USA and even some of Caribbean territories there is no venture capital. With their commitment to protect depositors, commercial bankers have little interest in supporting or forgiving mistakes.

Another fallacy is that entrepreneurs are born not made. While successful entrepreneurship does require strong personal qualities, many of the tools and techniques including business planning, management and organisational strategy, can be acquired. Since its inception IPED has been running training programmes mainly for very small entrepreneurs but opportunities for the medium size operations are very scarce.

Programmes

Many tertiary institutions in the US offer programmes in Entrepreneurship and some of the more successful entrepreneurs in that country hold MBA's. Not only are such programmes not available in Guyana but many of our entrepreneurs treat formal training as a waste of their time and money. Regrettably, only a few of the entrants in the recent EOY Programme found it possible to attend the E&Y sponsored Conference in Trinidad & Tobago which would have exposed them to some of the region's top consultants and businesspersons.

Entrepreneurs are often seen as loners but the truly successful one builds a team of talented individuals and provides them with leadership and inspiration. Entrepreneurs usually have very strong personalities and sometimes too much confidence in their own ability. They have to allow each member of the team room to exercise their talent, initiative and skills to the fullest.

Conclusion

While the world reads with amazement of the mind-boggling wealth of some of America's top entrepreneurs, money is not the sole focus of this breed. Indeed, they recognise the importance of giving something back to the community. That endears the community to them and comes in useful when the business faces difficulties, as it inevitably will.

Entrepreneurs are necessarily hard workers, some say they work too hard but then that is the price of success. With few staff, inadequate finances and no brand to rely on, the entrepreneur inevitably finds that he has to combine several roles which consume the better part of twenty-four hours. In the early stages of the business, he has no choice but as the business expands he has to balance his commitments to work with those to his family, the community and to himself. Life is clearly not only about money and work - what is the value of success if you do not have time to stop and smell the roses or at least enjoy the rewards of your efforts?

Whilst there is no manual on entrepreneurship, next week Business Page will look at some of the practices that can improve the entrepreneur's chances of being successful.