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Innovation and Faith by Basil Springer

  • Written by Basil Springer
  • Published in Opinion
"Now faith is the substance of things hoped for, the evidence of things not seen." - Hebrews 11:1. The Barbados Financial Statement and Budgetary Proposals 2008 was presented on Monday, July 7 by the late Hon. David Thompson, then Prime Minister and Minister of Finance (pp 103,106).

Under the heading "Innovation", the Minister of Finance presented a "Vision" and "Action" for a national imperative to grow the size of Barbados' economic cake and increase the net growth rate in order to: (1) induce sustainable economic growth; (2) boost energy and food security; (3) increase foreign exchange earnings/savings; (4) generate employment; (5) reduce poverty; and (6) enhance returns to individuals, commercial banks, private sector businesses, trade unions and Barbadians of the Diaspora.

The essence of his "Vision" was that sustainable development can be achieved through a national focus on developing a family of successful high performance enterprises, one enterprise after another. Indeed, I dare say, this statement is generally sound for countries around the world.

His proposed "Action" was the establishment of the Barbados Quick Response Revolving Seed Capital Fund and the Barbados Quick Response Equity Capital Fund with a mentoring component to contribute to the mitigation of the risk of business failure. The Equity fund would "protect" the Seed Fund and engage in "on-investing" in enterprises similar to how an organization would engage in on-lending money that it has borrowed from other organizations or persons.

These Funds are private/public initiatives to meet the needs of clients that have potentially profitable and sustainable high-growth business ideas but find it difficult, on a timely basis, to access from existing financial institutions all the seed and venture capital finance required to meet their needs. His "Vision" included Government seeding the Revolving fund, providing incentives to the private sector to capitalize the Equity fund and private sector management of the Funds.

The Revolving Fund was established by Government in 2008.

In 2009, the Equity Fund, initially and partially capitalized by Government, was launched by the Minister of Finance. Nine businesses received assistance and many of these businesses are alive today. The demise of the project was because the incentive legislation was not promulgated before the unexpected illness and untimely passing of the Minister of Finance in 2010 and the full capitalization of the fund by the private sector was never realized. Many other potential businesses expressed interest but never got a chance to benefit from the "Action". Both Funds were managed by a private sector Trust.

My experience since then throughout the Caribbean is that there is no shortage of ideas. This is manifested in my own business mentoring practice and by the number of requests that I get to source funding for potentially viable business ideas.

These ideas come from a wide cross section of industries including:

(1) Creative industries - they are becoming increasingly important components of modern post-industrial age knowledge-based economies.

(2) ICTs (Information and Communications Technologies) - a diverse set of technological tools and resources used to create, communicate, disseminate, store and manage information.  

(3) Renewable energy - energy that comes from resources which are naturally replenished on a human timescale such as sunlight, wind, rain, tides, waves, ocean thermal and geothermal heat.

(4) Agriculture, Forestry and Fisheries - the science and practice of producing crops, livestock and fisheries from the land and marine resources of the earth.

(5) Agro-processing - refers to the subset of manufacturing that transforms products originating from agriculture, forestry and fisheries.

(6) Innovative services - the use of innovative technology to improve products or processes.

(7) Innovative manufacturing - the adaptation of global innovative technology to contribute to the transformation of the local manufacturing landscape. 

(8) Textiles and apparel - production of yarn and fabric and the subsequent design or manufacture of clothing and their distribution.

However, seven years after the 2008 Budget speech, potential high performance enterprises in Barbados still suffer the frustration of the lack of timely access to appropriate finance because of the high risk inherent in fledgling businesses. This is a region wide problem and must be addressed aggressively if the economies in the region are to survive and grow.

Here are 10 proposed innovative risk mitigation objectives.

(1) Value chain development which focuses downstream on creating value in the eyes of the consumer.

(2) Food supply chain management which focuses upstream, from product conceptualization to the consumer, on integrating supplier and producer processes, improving efficiency and reducing waste.

(3) Due diligence to assess the need for the entrepreneur's mind-set to be changed to  engender a highly productive business disciplined culture.

(4) Due diligence to ensure that the enterprise's business proposal is robust.

(5) Investment commensurate with the potential to grow the business as determined by realistic cash flow projections.

(6) Flexibility with the hard collateral requirement, since very often there is little hard collateral on offer by the enterprise even though the business proposal is sound.

(7) Financial terms where repayment is linked to fluctuations in cash flow.

(8) Investment Fund development and Fund management which is engaged in "on-investing" to enterprises to spread the investment risk.

(9) Partnership with national governments to strengthen the enabling environment.

(10) Partnership with international institutions in support of government initiatives.

Each of these 10 risk mitigation objectives has a corresponding innovative strategy which I shall be happy to discuss with interested parties. I can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

When I plant a seed in my garden, I have faith that it will grow. How well it grows depends on the nourishment and care that it receives. Let us plant seeds of innovative risk mitigation strategies and have faith that they will be well received by Caribbean financial institutions and that our economies will experience the growth that we desire.

(Dr. Basil Springer GCM is Change-Engine Consultant, Caribbean Business Enterprise Trust Inc. - CBET. His columns may be found at www.cbetmodel.org and   www.nothingbeatsbusiness.com.)