Small Business from Small Islands: General Conclusions … and More Questions

General Conclusions … and More Questions


We start with a sobering note: NOT A SINGLE ONE of the entrepreneurial men and women showcased in these case studies has entered the world of business after following an entrepreneurial programme at school. The only candidate close to doing so is Shireburn’s John De Giorgio; but even then his entrepreneurial education was only embarked upon when he was already mature and out of school for some years. These facts confirm that entrepreneurship is more likely to be developed out of school than in school. The question, therefore, naturally arises: is it a contradiction in terms to seek to foster entrepreneurship via the formal educational system? How innovative and formative can schools be in developing persons who are genuinely keen to start their own businesses?

What follows are a series of reflections, and yet more questions, that call for further research:

1 – The nature and origins of entrepreneurship (including the mix of local and global experiences; any influence of schooling or of state support measures).

What are the particular human qualities predisposing an individual to entrepreneurship? What is the key role of returning emigrants with skills and experience abroad in boosting the stock of entrepreneurs in the home country? Are entrepreneurs born or made? It seems that there is a fairly long incubation period. There is a gradual, summative set of experiences and learning, partly from formal schooling but also from conventional employment and incidental learning. Unemployment can be a trigger; but also a casual encounter with a potential buyer; or a chance discovery. The entrepreneur then weans away from employment into self-employment: there is no dramatic bursting on the scene. Growth is slow, measured, tentative… investments are often as low as possible, guaranteeing that control remains firmly in the hands of the founder/ideator.

2 – The nature of the material product (including links with island “brand”).

An easy way to start is to develop naturally available raw materials into products that are geared towards a tourist market. But issues of quality, packaging, display and consistency soon emerge, enabling some sifting of the myriad producers. Is there a consistent island brand? Who certifies that a product is genuinely local? Is there a concerted effort by local producers to cooperate in sourcing off-island markets (co-petition), or are they engaged in internecine conflict and rivalry? The use of the factory as a museum is also helpful, combining production and consumption, and thus hopefully boosting sales. Do we teach how to look at natural products as potential commodities? Do we have a disposition for quality, packaging, display and consistency on our products? Do we encourage innovative approaches to ‘common’ things – like stone, wood, wool, glass? Do we teach a combination of manufacturing and service? Do we teach a combination of sensory stimuli in island branding and product consumption?

3 – The nature of the virtual product (including the advantages of virtual manufactures sold from small islands).

Software and virtual products offer obvious advantages to ALL producers, avoiding transport and insurance costs – but island based producers reap the largest potential advantage, since they suffer most from transport handicaps. Developing a product (and a market) from scratch helps immensely. The ‘exotic’ link with an island can help in relationship marketing, but not too close a branding with the island is preferred. Do we encourage the development of web-products or software?

4 – Export or perish – the search for markets and niches beyond the small domestic base.

Successful island entrepreneurs quickly develop an appreciation of how crucial ‘off island’ sales are to preserve and grow their business. Tourism is one easy route; but exportation is another step. The identification of distributors, dealers or agents is a common strategy, with close communication with the entrepreneur. Once again, the approach is wary, in small steps. State support can facilitate participating in a trade fair, from where good contacts can start. The `export’ of workers (emigrants) can also be a major source of income and foreign exchange via remittances.

5 – Human resource strategies (recruitment, resourcing and motivational issues; the pros and cons of low labour turnover).

People are crucial resources, especially to small businesses. Family labour is one route, especially where technological inputs are not as challenging. In the case of hi-tech firms, however, the best is not usually a relative. The unitary, team-based, labour relations in a small firm are enhanced by operating in a unitary island framework. This solidifies bonding, reducing labour turnover; but it may also make it difficult to discharge long-serving employees; or for discharged employees to avoid being black-listed. Any specific labour market segment will be tight. So: hard to recruit; tempting to poach; important of training in-house; few opportunities for skilled employees to find alternative employment – unless they decide to become self-employed and compete with their former boss! It is vital to offer possibilities of professional development, including stints off-island. What is the occupational culture of young people? Is it likely that they will look for work in a SME? How many of them will actually consider self-employment? How will they eventually treat their workers? Do they consider training and professional development a cost or an investment?

6 – The gender dimension: profiling successful men and women.

The NISSOS Cases tend to show a remarkable level of entrepreneurship by both men and women, even if men are more often in the public eye. Control is transferred to, or shared with, members of the immediate family in many cases. The presence of women at the helm – like Wilma (Shetland Designer), running a dynamic operation with some 30 sub-contracted knitters – is inspiring. The top-position at the cod liver oil processing company (not a very feminine sounding industry!) in Iceland is now occupied by Katrin, the founders’ grand-daughter. Joseph Said’s daughters in Malta are likely to take over Mdina Glass completely in the near future. Both Maj Lindberg (Krister’s wife); Bjorg (Fridrik Skulason’s partner) and Merle (Mark Muru’s wife) act as the right-hand of the business operation, supporting administration and accounting. How many young men and women in vocational training? How many men and women start own businesses? If so, how many are organized in accordance with gender stereotypes? Are there any role models to help cultural change?

7 – Strategy and serendipity (the judicious combination of rational and fortuitous circumstance (luck and chance!) in developing a winning product).

Life is a series of planned and unplanned events. Every person has a unique story, but usually there is a combination of chance and expectation. What character features allow a person to first perceive and then seize a business opportunity? Are we trained or educated to organize our lives? Do we allow ourselves to be surprised by life’s unexpected offers? Are we trained to exploit departures from the expected? Is risk mistaken for hazard?

8 – Outside supports: their diversity and their impact (at a national and regional level).

Small businesses from small islands tell different stories about external supports. Some are very enthusiastic; others disappointed; many indifferent and frustrated by what they claim is ‘red tape’ and paperwork. Is a one-stop shop that difficult to do? Why are island bureaucracies not exemplars of ‘small is beautiful’? Or are island entrepreneurs simply suspicious of ‘outsiders’, whoever they might be? What are the best forms of support that could be offered to a small business? By whom should they be offered? How do you go about looking for support? How do you make sure that you get the right kind of support, at the right kind, and while maintaining full control? Government bureaucracy/ regulations can strangle private enterprise. A judicious process of deregulation and liberalization can do wonders for promoting entrepreneurship and business. Appropriate forms of official assistance can be vital in such key areas as credit, training and marketing. How can Aid donors support the process via, for example, funding training and providing micro-credit?

9 – The development of local expertise (how to adopt and then adapt or develop technology).

New Technology can be adopted, adapted or invented outright. Successful small businesses excel at adaptation. The gradual modification of an existing technology at a certain point becomes a new technique. Moreover, the disposition to become technologically innovative comes also from exposure to ideas and models developed off-island. How do we ensure the opportunity to young islanders to visit or operate in locations where ideas are generated?

10 – The link between the formal and informal sectors (including networks, politics and social capital).

Social capital is very strong amongst small communities. Many small island entrepreneurs operate between the formal and informal sectors; as do many employees. Governments are often misled into believing that the informal sector acts to disguise productivity and therefore is a site of tax evasion which must be destroyed and formalized. Should not the informal sector be recognized as a strength and major support for entrepreneurial behaviour? Do our post-secondary and vocational training institutions have any harmonious relations with nuggets of informal (but powerful) social capital – like neighbourhood groups, cooperatives, voluntary associations, parish committees?

11 – The link between small business, academic research and public policy on small islands.

Small businesses want markets to make profits; academics want students and research topics to publish; politicians want ideas and recipes for sustainable economic development which will help re-elect them into office. Do these 3 worlds ever intersect? Do we have role models who have operated in 2 or all 3 of these circuits – theoretically easier to find in small communities? How does an academic become a relevant player in the policy world without being merely used to justify existing policies? How does a business person find a positive role to play within an educational institution? Should educational institutions produce workers? Does, for example, a NISSOS training manual stand a good chance of being a useful learning tool on/to a small island community?

12 – The effective teaching of entrepreneurship.

Do we conceive and teach that entrepreneurship can develop in slow stages? Are there any idea hot-spots or nurseries or incubators on the island? Can our polytechnics and universities serve this purpose? Are the teaching staff and faculty prepared to condone and encourage innovation? Or does their behaviour actually stifle creativity? Do young students in vocational education enjoy the challenge of off-island markets or are they afraid of them? Are they helped to work at ease in off-island environments (e.g. soft skills, languages, listening skills, autonomy skills…) How will they learn to negotiate deals with agents, distributors, bankers, etc?

Small Business from Small Islands – NISSOS Project 

Overview | Acknowledgements | Introduction | The NISSOS Project and its Partners | Showcasing Successful Manufacturing Firms | Research Methodology | Discussion: Raw materials | Discussion: High-tech | General Conclusions

© 2021 Institute of Island Studies, University of Prince Edward Island. All rights reserved.