Puerto Rico Governor Signs Bill on SME’s

PR SME - Photo 1Go Lean Commentary

This sentence in the news article below about small & medium-sized enterprises (SME’s) speaks volumes for Puerto Rico’s economy and all the Caribbean:

According to government data, 95 percent of companies in Puerto Rico are SMEs with 50 or fewer employees, and they employ around 25 percent of the jobs on the island.

So if there is a plan to grow jobs in Puerto Rico and the Caribbean, that plan must look to impact small businesses or SME’s.

By: The Caribbean Journal staff

Puerto Rico Governor Alejandro Garcia Padilla has signed a bill aiming to boost small and medium-sized enterprises on the island.

The new law has several provisions: it reserves part of government purchases for local businesses, encourages the integration of professional and new entrepreneurs and gives priority to SMEs “in discretionary public funds to subsidize payroll for new jobs or existing ones,” Garcia Padilla’s office said in a statement.

The bill, called the “Support for Microenterprise, Small and Medium Merchant Act” amends the island’s Procurement Reserve Act to 20 percent, and establishes a reserve of 60 percent for SMEs when granting subsidies under the Law of Security in Employment.

“This bill is for SMEs what the Law of Incentives for Economic Development and previous industrial incentive laws were for manufacturing in Puerto Rico. That’s how important it is,” the Governor said in a statement. “The country is undergoing the biggest transformation in its recent history.”

According to government data, 95 percent of companies in Puerto Rico are SMEs with 50 or fewer employees, and they employ around 25 percent of the jobs on the island.

“The path to sustainable economic development will necessarily have to include SMEs,” he said. “Encouraging SMEs is to boost local production and wealth creation that circulates and remains in the country.”

The government said the law also creates a board to support small retailers, among other aspects, and amends the country’s permitting act to grant permits for conditional or temporary activities that “pose no risk to health, the environment or security and conforms to the zoning requirements.”
Caribbean Journal– Caribbean Online News Source (Retrieved 06/13/2014) –

The book Go Lean … Caribbean fulfills that requirement. The book serves as a roadmap to implement the Caribbean Union Trade Federation (CU), and with this effort, create 2.2 million new jobs over a 5 year period. Major consideration is given to entrepreneurship, small businesses (Main Street) and even optimizing existing industries. But Go Lean differs from government efforts, such as Puerto Rico’s as described in the foregoing article, in that it looks to provide complete incubation for SME’s. This includes fund development, technical assistance, coaching, management training and introductions to new global markets; a true public-private partnership.

This directive is embedded in the opening Declaration of Interdependence at the start of the book (Page 13/14), with these statements:

xxi.  Whereas the preparation of our labor force can foster opportunities and dictate economic progress for current and future generations, the Federation must ensure that educational and job training opportunities are fully optimized for all residents of all member-states, with no partiality towards any gender or ethnic group. The Federation must recognize and facilitate excellence in many different fields of endeavor, including sciences, languages, arts, music and sports. This responsibility should be executed without incurring the risks of further human flight, as has been the past history.

xxiv.   Whereas a free market economy can be induced and spurred for continuous progress, the Federation must install the controls to better manage aspects of the economy: jobs, inflation, savings rate, investments and other economic principles. Thereby attracting direct foreign investment because of the stability and vibrancy of our economy.

Whereas the Caribbean region must have new jobs to empower the engines of the economy and create the income sources for prosperity, and encourage the next generation to forge their dreams right at home, the Federation must therefore foster the development of new industries… In addition, the Federation must invigorate the enterprises related to existing industries … – impacting the region with more jobs.

This subject of entrepreneurship has been previously covered in these Go Lean blogs, highlighted here in the following samples:

a.   http://www.goleancaribbean.com/blog/?p=486 – Incubator firm backs Southeast Asia cab booking app

b.   http://www.goleancaribbean.com/blog/?p=398 – Self-employment on the rise in the Caribbean – World Bank

c.   http://www.goleancaribbean.com/blog/?p=214  – LCD versus an Entrepreneurial Ethos

As also depicted in the foregoing article, governments have employed strategies to promote small businesses like set-aside programs. While this is a good start, more is needed for true success. Go Lean relates that progress in entrepreneurship requires a new community ethos, an acceptance that intellectual property is just as essential as any real property requiring protection by government authorities and respect by the general public. This is key, as the book posits that new information-centric economy activities can be equally exploited from an address in the Caribbean or any address in North America or Europe. ICT (Internet & Communication Technologies) has emerged as the great equalizer!

PR SME - Photo 2The vision of the CU is a confederation of the 30 member-states of the Caribbean, including all 4 language groups, into an integrated “single market”, thereby fostering economic growth to raise the regional economy to $800 Billion GDP (from the 2010 base of $378 Billion). This growth would be the cause-and-effect of 2.2 million new jobs projected in the Go Lean roadmap. The following list details the series of community ethos, strategies, tactics, implementations and advocacies necessary to effectuate the change in the region to foster the small business environment:

Community Ethos – Job Multiplier Page 22
Community Ethos – Lean Operations Page 24
Community Ethos – Return on Investments Page 24
Community Ethos – Ways to Impact the Future Page 26
Community Ethos – Ways to Help Entrepreneurship Page 28
Community Ethos – Ways to Promote Intellectual Property Page 29
Strategic – Vision – Integrated Region in a   Single Market Page 45
Strategic – Vision – Agents of Change – Globalization Page 57
Tactical – Fostering a Technocracy Page 64
Tactical – Growing to $800 Billion Regional Economy Page 67
Tactical – Separation of Powers – Homeland Security Page 75
Tactical – Separation of Powers – Interstate Commerce Page 79
Tactical – Separation of Powers – Department of Labor Page 89
Implementation – Ways to Pay for Change Page 101
Implementation – Steps for Self-Governing   Entities Page 105
Implementation – Ways to Deliver Page 109
Implementation – Ways to Benefit from   Globalization Page 119
Planning – Big Ideas for the Caribbean Region Page 127
Planning – Ways to Improve Trade Page 128
Planning – Ways to Improve Interstate Commerce Page 129
Advocacy – Ways to Grow the Economy Page 151
Advocacy – Ways to Create Jobs Page 152
Advocacy – Ways to Foster Technology Page 197
Advocacy – Ways to Impact Main Street Page 201
Appendix – Job Multipliers Page 259

While the Go Lean roadmap is focused on small and medium-sized businesses, it also stresses the importance of protecting the economic engines against crime and emergency scenarios. The roadmap asserts that the economy of the region must be aligned with the security of the region; otherwise “bad actors” will emerge. The CU/Go Lean roadmap calls for “new guards for their future security”, so as to ensure that the regions hard-fought investments are not easily undermined. We must have return on our investments; we must have forward progress.

We do not want “to sow and have someone else reap” – The Bible.

All in all, the Go Lean … Caribbean roadmap posits that the problems of the Caribbean homeland are too big for any one member-state to solve, empowerments in Puerto Rico alone is too-little-too-late, but rather a regional solution is needed. The street-wise expression is so valid at this time: “You don’t bring a knife to a gun fight”. The Caribbean Union Trade Federation is a regional answer – the scope is bigger than just entrepreneurship, small businesses or jobs. While the effort will be fully exerted to promote and optimize SME’s, create jobs and forge every opportunity for success at home, a lot more is riding on these efforts. In addition to economic progress, we also have the whole future “hanging in the balance”, that of the Caribbean youth and their presence in the Caribbean. For this reason, the roadmap considers even more, that of making the Caribbean a better place to live, work and play.

Download the book Go Lean…Caribbean – now!

Share this post:
, , ,

Leave a Reply

Your email address will not be published. Required fields are marked *