“Command the rich to do good, to be rich in good deeds, and to be generous and willing to share. In this way they will lay up treasure for themselves as a firm foundation for the coming age, so they may take hold of the life that is truly life.” – 1 Timothy 6:18-19
My longtime Jamaican friend and colleague Irwine Clare, OD, a champion of the diaspora in New York, recently invited me to join him for an interview on the popular IrieJam Radio. He is familiar with my lifelong interest in enterprise development and economic growth in small states.
He introduced me as an economist and thought leader. I immediately clarified that I was not trained as an economist. However, I am proud of my training as a statistician in statistical science and as an operations research scientist specializing in technical problem-solving.
Irwine posed a fundamental question: How do we ensure that economic growth ultimately benefits people on fixed and lower incomes?
My response was that we must expand our economies through the 3M Shepherding Model — Metamorphosis, Money and Management.
Metamorphosis involves identifying the DNA of “elephant” business ideas — enterprises with the potential to grow beyond small domestic markets, penetrate global markets and earn foreign exchange.
Every Caribbean territory has a ministry or agency responsible for enterprise development. However, the focus tends to be on small- and medium-sized enterprises rather than on directly identifying and nurturing export enterprises with global growth potential.
Supporting SMEs is important, but they should form part of an economic gearing system in which export enterprises drive growth while SMEs provide valuable supporting goods, services and employment. Small states cannot build sustainable economies by circulating the same money within limited domestic markets. We must earn foreign exchange.
Money is provided to these enterprises through an Equity Growth Fund. Investors commit capital to the fund for varying periods in exchange for attractive potential returns. This creates a buffer between the investor and the entrepreneur while providing seed capital without the immediate burden of loan repayments. But money alone does not build successful businesses; people do.
Management means shepherding entrepreneurs by addressing mindset and skillset development through life coaching, while strengthening operations through cross-cultural communication and business mentoring.
The 3M model cannot succeed in isolation. It must be supported by genuine public-private partnership governance. Government provides the enabling environment through appropriate laws, regulations, efficient services and supportive policies. The private sector grows the economy by investing, innovating, producing, exporting, creating jobs and earning foreign exchange. Trade unions consult with employers and the workforce to increase productivity in exchange for fair compensation. These three partners must recognize that they are on the same economic team.
The objective is not growth for growth’s sake. Successful export enterprises earn foreign exchange, create jobs, generate wealth and expand the tax base, enabling governments to provide greater support for essential services and people on fixed and lower incomes.
The challenge is to convert economic growth into shared prosperity.
My prescription is simple: identify enterprises with global potential, finance them with private equity capital, shepherd them to success and support them through genuine public-private partnership governance. That is how small states can think big, earn globally and improve the quality of life for all.
Irwine then asked how the diaspora could participate in the Shepherding Model. I immediately responded that its members could become initial investors in the Equity Growth Fund. In doing so, they could earn a potential financial return while helping to build sustainable enterprises, strengthen Caribbean economies and lay a firm foundation for generations to come.
Dr. Basil Springer GCM is a corporate governance adviser. His columns may be found at http://www.nothingbeatsbusiness.com.
