Government's Role in Building the Small Business sector
The establishment and nurturing of SME's (Small & Medium-size Enterprises) is a vital ingredient in creating a dynamic market economy in the economic and social development of any, but especially developing countries. Entrepreneurs are big drivers of economic growth, innovation – and job creation. So a strong and vibrant SME sector provides a good foundation to increase standards of living and to reduce poverty.
It was therefore very appropriate that the FURTHER initiatives of government regarding ENTREPENEURSHIP and SMALL BUSINESS development got special mention in the recent NATIONAL BUDGET presentation of Prime Minister Roosevelt Skerrit. It was also appropriate when DAIC President Kira Thompson-Aird focused recently on the subject, pointing out the organization's own policy-position some years ago in recommending that government provide a framework (but NOT control!) for the development of that sector
Despite the internationally recognized importance of SME's, they still face major challenges in many developing countries today. The challenges of business entry, then survival and ultimately sustainable growth are considerable, especially in a small and too bureaucratic country like Dominica. Limited financial resources, a general lack of experience which also affects the capacity to handle key management decisions all present major challenges. To mitigate these, a nurturing environment (that includes technical help with marketing, accounting, etc) must be developed by the government that will result in a good entrepreneurial climate. Government's role therefore is to create the enabling environment, but never to over regulate. SME's must always be free to innovate and utilize the principles of the Free Enterprise system
Finally, it should be recognized that almost all private sector development relies on a partnership between the private and public sectors. The competitiveness of an enterprise (especially for exports) may depend as much on what a government does as on what the small business owner does. To maximize the full benefits of small business in the Dominica economy, our policy makers will need to review performance in partnership with the private sector, and continue to improve the general business environment so that MOST new businesses will actually stand a chance to achieve the goals set for themselves and the economy.