A landmark national study has found that while micro, small and medium enterprises account for 98 per cent of Barbados’s private sector businesses and employ more than half the private-sector workforce, a striking imbalance persists — the remaining two per cent making up the largest enterprises carry 45 per cent of all private sector jobs, raising urgent questions about the sector’s capacity to grow, scale and sustain the economy.
The findings of the study, conducted last year by UWI management expert Professor Dwayne Devonish, is the first comprehensive assessment of the small business community in a decade.
Minister of Energy, Business Development and Commerce Kerrie Symmonds, speaking at the Lloyd Erskine Sandiford Centre on Wednesday at the State of the Sector Conference, said the data now provides a critical foundation for decision-making, moving away from what he described as “policy by instinct”.
“We are now able to have a serious discussion on the way forward, which is driven by the data that has been collected, and I think it helps us to demystify the sector. In 2024, we would have had 9 196 enterprises employing 112 595 people in Barbados, whereas in 2016, we had 9 651 enterprises, so the quantity of enterprises in the country has marginally fallen.
“Equally, in 2016, only 100 449 people were employed in this sector as opposed to 112,595 in 2024, so that there is evidence of some minor enterprise shrinkage but greater employment.”
He noted that while MSMEs dominate the business landscape, the study highlighted a significant imbalance in employment.
“Ninety-eight per cent of the enterprises that we call private sector enterprises in Barbados sit within the context of the MSME framework… 55 per cent of private sector employment in this country fits within the MSME sector and that also tells us a story about the imbalance that must be corrected in this country because we have a two per cent of the country’s private sector enterprises that fall outside of the MSME framework but they employ 45 per cent of the people in this country.”m
“Clearly, therefore, we are going to have to look at the expansion of the MSME sector so as to ensure that there is a more equitable balance in terms of private sector employment, because I think we would all agree that there is some cause for concern where two per cent of our private sector enterprises are carrying that level of private sector employment.”
The study, led by Professor Dwayne Devonish, also found that entrepreneurship has surged in the wake of the COVID-19 pandemic, with one in four MSMEs established since 2020.
Symmonds said: “One of the things that impressed me about this particular study was the fact that it allows us now to know that we have had some substantial entrepreneurial growth in the last five years, and the study suggests that 25 per cent of the MSMEs in the country operating today were established since the year 2020.
“We are now seeing an entrepreneurial explosion, if you will.”
At the same time, Symmonds pointed to growth in female-led businesses, while warning that many remain at the micro level and face challenges in scaling.
“Twenty per cent of the households in this country fell at that time below the poverty level, and a substantial portion of that 20 per cent, if memory serves me correctly, was female-headed households. For the policymaker, the intervention must be not only how do we address that large percentage of poverty, which is one-fifth of the country’s households in 2015 to 2016, but how do we also speak to the issue of trying to make sure that those ladies who head those households are given an opportunity to enter the world of entrepreneurship and to be able to stand confidently and safely on their own feet.”
The research also highlighted structural weaknesses among MSMEs, including low revenues and limited resilience.
The minister continued: “I also recognize some structural concerns about which the ministry is going to now have to sit down and apply our hearts and minds because these things have to be corrected. Fifty-three per cent of the micro, small and medium enterprises report revenues which are at or under $100 000 a year, and that is substantially lower than what we would want to see happening.”
Symmonds further identified low levels of digital adoption as a major barrier to growth and export potential.
“More than one half of those entities are operating in a context within which digital adoption is very limited, and what we want to have is a sector which is accelerating its usage of digital technology.
“We have to earn our foreign exchange, and to earn that foreign exchange, therefore we must be adopting the technologies that help us, especially in the services sector where there’s considerable strength in our economic performance and history. We have to be prepared to make sure that our businesses are equipped to provide services in accordance with what they call mode one form of supply, which is by selling those services technologically across borders.”
Michael Hall, financial sector senior specialist at the Caribbean office of the Inter-American Development Bank, said the study will play a key role in shaping future interventions.
Hall said: “We believe that we can achieve this by engaging operations that help to strengthen the enabling environment for private sector development with a particular focus on increasing access to finance and financial inclusion, especially for MSMEs.
“The report provides insights into the impacts. It’s meant to provide empirical evidence that will help us to make informed decisions on how to best approach the challenges that we continue to face.”
