Minister of Finance, the Honorable Winston Jordan, echoed this important role of small businesses during his 2018 Budget Speech “Small businesses represent a vital component of our economy and getting more out of them , at the time the government is rebuilding the governance structures of our public institutions, is critical to boosting productivity and achieving greater economic growth and sustainable development”.
- Small businesses are the backbone of any economy. For example, there are 28 million small businesses in America. These businesses employ 55% of the workforce and account for 54% of transactions throughout the year. Since the 1970s, small businesses have been responsible for 66% of all net job creation within the economy. In addition to privately owned small businesses, franchised businesses have grown significantly in the past decades. Today, the nearly 600,000 franchised small businesses such as restaurants, gas stations, coffee shops, and retail outlets across the country provide 8 million jobs, and account for nearly 40% of retail sales.
- Guyana is a country of small businesses. Even the largest indigenous companies are small. Guyana has very few international companies and no multinational or global companies. To fully transform Guyana’s brown economy into a sustainable green economy, small businesses in Guyana need international and domestic partnerships to turn Guyana’s incredible patrimony from a state of comparative advantage to a stage of competitive advantage. Although Guyana’s small businesses use most of the productive inputs, they contribute less than 10% of Guyana’s GDP.
- Entrepreneurs drive small businesses. Guyana needs to become an entrepreneurial business environment driven by innovation because Guyana’s local market is too small to absorb its great production potential. In small markets such as Guyana, there are no real economies of scale locally and hence growth can only be obtained through exports. Guyana needs to nurture bigger and more competitive businesses as larger businesses provide an anchor of economic stability in a community. They provide large numbers of jobs that create the disposable income small businesses depend on. Moreover, big businesses depend on the goods and services small businesses provide their employees. Together, they create a symbiotic circle that both require for their viability.
Governments use industrial policy to promote the development of new industries and the creation and adoption of new technologies. Types of industrial policy include tax credits, input, output and R&D subsidies, minimum use requirements, standards, and trade restrictions. One of the outputs of this event is for the Government of Guyana to announce a small business green economy framework that will be catalytic for small businesses and their growth along a green economy pathway.