Visiting Professor at the School of Enterprise and Business Innovation (SEBI) at the University of Guyana Dr. Leyland Lucas is advocating more robust support from the commercial banking sector for startup business ventures “in their greatest time of need” as one of the building blocks for the creation of an “entrepreneurial ecosystem” in Guyana.
In an article written for publication in the forthcoming issue of The Guyana Review, Professor Lucas argues that while “regulatory demands” place constraints on banks’ lending practices, this does not remove them from “the realm of responsibility” for promoting entrepreneurship and supporting the ecosystem. Commercial banks, Lucas contends, must “find ways to embrace entrepreneurship and the creation of new entities.” He says that “special programmes must be designed by banks to meet the needs of entrepreneurs, such that the ecosystem can thrive and become self-sustaining,” adding that “banks cannot survive by simply lending to established businesses…if banks are not there for entrepreneurs in the embryonic stage and their greatest time of need, then how can they expect to be embraced later? Such behaviour is tantamount to the absentee parent who, upon a child’s rise to a position of prominence, suddenly emerges and seeks to benefit.”
Lucas, meanwhile, is also calling for credit unions, which, he says, “are the guardians of significant financial assets” to play their role in the entrepreneurship system “as enablers of economic activity rather than guardians of savings,” a position which he says can be realized with “enlightened management and not much risk” and which can contribute to the creation of a new group of “wealth generators.” Such a move, Lucas says, requires personnel with the necessary knowledge to effectively perform the duties associated with the “new duties” of the credit union in terms of providing support for programmes designed to aid entrepreneurship.
According to Lucas, if an enabling entrepreneurship is to be created state policies must be designed to make it easy for entrepreneurs to access public sector systems and laws enacted to help promote entrepreneurship. Additionally, he writes that “regulatory frameworks must be developed to facilitate access to critical information, incentives created to support entrepreneurial ventures and effective enforcement mechanisms must be established.”
And while government has tagged the Guyana Office for Investment (Go-Invest) and the Small Business Bureau (SBB) as critical players in attracting both local and overseas private sector investment and supporting local small and medium-scale entrepreneurial ventures, respectively, Lucas opines that these alone are “not sufficient for entrepreneurship to grow.” The Ministries of Business, Trade, Communications, and our foreign missions, he says, “have particularly important roles to play in the development and sustenance of an entrepreneurship ecosystem.” And Lucas says that while the one-stop shop system which facilitates access to all government services has been the focus of government’s promotion of the country’s openness to foreign investment, what is seldom emphasized is “the importance of trust” to the smooth operations of this system. “Unfortunately, within our own society, this is a scarce commodity, Lucas adds.
In adding his voice to those that have already bemoaned the absence of supporting physical infrastructure for the creation of a convivial entrepreneurial ecosystem Professor Lucas alludes to the need for products created and ready for market to be supported by “effective logistics systems, reliable power supplies, and communications networks”. He says, “National resources must be devoted to creating an exceptional road and air transportation system, a reliable power grid, and a telecommunication system that is dependable. Products must be delivered on time to customers; delays in production due to power outages must be minimized; contacts between producers and customers must be reliable.” These support mechanisms, he says, are particularly important “within the context of business opportunities associated with the discovery and production of oil and gas. Entrepreneurship cannot thrive if these essential support systems are not dependable.”
Part of an enabling support infrastructure for an entrepreneurial ecosystem, Lucas says is a stable environment in which prospective entrepreneurs can work in which context he is advocating the creation of “regionally clustered entrepreneurship parks” within which various services should be provided to enhance the prospective entrepreneur’s experience, with the nature of these parks varying from one region to another.