Promotion of MSMEs in Cuba: a compass book for policy creation

Promotion of MSMEs in Cuba: a compass book for policy creation
Promotion of MSMEs in Cuba: a compass book for policy creation

With more than 11 thousand micro, small and medium-sized businesses (MSMEs) in less than three years, the growth of the private sector in Cuba is an undeniable fact.

Although the Government has given the green light to the creation of the so-called “new economic actors”, there are contradictions that hinder the development of these businesses.

The inconvertibility of the currency, the absence of an exchange market, sustained and growing inflation, as well as the lack of legal clarity about its operation, are some of the problems pointed out by Professor Ileana Díaz, leader of the Entrepreneurship and Innovation Network from the University of Havana.

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This reflection is part of the introduction of the digital book Promotion of micro, small and medium-sized private companies in Cuba: Notes for a policy, coordinated by Díaz, which brings together ten other experts to address not only the problems that MSMEs face in their operation but also the public policies necessary to solve them.

The text, published this year by the Editorial Ciencias Económicas, belonging to the National Association of Economists and Accountants, recognizes the enormous dynamic potential of private businesses to generate employment and increase the supply of goods and services, as well as their flexibility and rapid adaptation to market demands.

The authors agree that to achieve takeoff, policies to promote MSMEs in Cuba are required; government support for the growth of these companies, allowing them to develop all their capabilities.

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The volume offers the country’s public decision-makers proposals for actions, based on science, to promote productive transformation, innovation, internationalization, business development and financing of these economic actors.

Additionally, it explores how to promote technology-based MSMEs, socially responsible businesses, as well as ventures that benefit impoverished communities.

Ileana Díaz, consulted by OnCubabelieves that the main value of the book is that it shows Latin America’s experience in promoting micro, small and medium-sized businesses as a guide for the development of Cuban MSMEs, which are expected to play a dynamic and disruptive role in the economy.

The Entrepreneurship and Innovation Network, led by the academic, is a multidisciplinary research and training space that benefits entrepreneurs in their professional growth and contributes to the construction of public policies with the result of scientific studies.

Some proposals

Among the suggestions included in the book to promote the development of micro, small and medium-sized businesses in Cuba is the creation of business clusters, taking the experience of Latin American countries.

These are groups made up of businesses from the same sector and geographic location. They are cooperation networks that take advantage of regional factors and fiscal policies to improve the competitiveness of entities.

In the field of business development, the creation of territorial centers to support MSMEs as supporting institutions and with the function of being a bridge with state entities, local governments and academia is proposed.

In this way, the demand for specific state training and advisory instruments that meet the needs of the new economic forms would be responded to.

On the other hand, the text promotes the financial inclusion of these actors for their sustainable development. This intention rests on four pillars: offering of differentiated products, services and financial incentives; broad and effective use by MSMEs of the possibilities already existing in banking; consumer protection; and promotion of financial culture.

Bet on corporate social responsibility

According to the authors, much remains to be done in terms of regulations and recognition of corporate social responsibility (CSR). In Cuba there is a legal vacuum and a lack of training in this regard, which impacts the promotion and adoption of responsible practices by MSMEs.

What is corporate social responsibility? The text explains that it is a multidimensional business management mode (ethical, social, economic, legal, environmental, participatory) that implies the commitment to generate value in coherence with the development of sustainable, verifiable and intentional practices.

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The proposals regarding CSR establish, first of all, compliance with legal and fiscal commitments, as well as the company’s social responsibility.

Added to the above is the well-being of the company’s workers and partners and the promotion of actions in the community with an impact on the improvement of infrastructure, vulnerable groups, saving resources and caring for the environment.

The authors consider that this change requires a transformation in the corporate or business management plan, with implementation and measurement tools to make corporate social responsibility effective.

On the other hand, the Government would have to encourage this transformation. The mechanisms to achieve this include differentiated tax and price treatment for socially responsible economic actors, as well as rewarding the most outstanding in terms of CSR.

Why is a book like this necessary?

“In so many years of entrepreneurship experience with self-employment, the country has never adopted any promotion policy, it is therefore necessary to raise awareness of how essential it is to assume it so that these entrepreneurial actors grow and contribute, with better conditions, to the economy of the country,” explains Ileana Díaz in the introduction of the book.

The expert affirms that most governments, even in countries with other levels of economic development, have adopted a strategic approach to their MSME policy.

This judgment is validated in the prologue of the text by the official of the Economic Commission for Latin America and the Caribbean (ECLAC), Felipe Correa-Mautz, who presents the experience of eight countries in the region in supporting these business forms for their impact on the economic and social development of those nations.

“A good relationship with MSMEs is always a good relationship with the population in general, and in particular with those employed who work in this business segment,” he assured.

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Adjusting regional good practices to the national context and, on that basis, proposing public policies, is the greatest achievement of the volume, which focuses on prioritized sectors such as food production, exports, technology-based companies and the manufacturing industry. , as recognized by its coordinator.

Furthermore, Díaz indicated that this study is also applicable to any enterprise, state company or self-employed worker.

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