Business owners in the Dutch Caribbean are severely hit by corona but expect a brighter near future
These results indicate that businesses are not viable in the long run if sales or net margins do not change. Business owners endure above average stress, with a quarter of them at extreme levels. At the same time staff employment hardly decreased in Q2 of 2021 and business confidence for the third quarter of 2021 is high. This is due to the expectation that sales will rise considerably, but also investments and on time payments.
"It surprised me that the composition of the entrepreneurs is very different compared to the Netherlands"Professor Research Group Financial Economic Innovation: Lex van Teeffelen
Comparing the Caribbean and the Netherlands
‘It surprised me that the composition of the entrepreneurs is very different compared to the Netherlands’, according professor Lex van Teeffelen. ‘SME entrepreneurs in the Caribbean are considerably younger and the majority are women, while in the Netherlands the largest group of entrepreneurs are between 40 and 55 years old and are men. That is why we immediately decided not to compare the figures for Aruba, Bonaire and Curaçao with the figures in the Netherlands. Then you are comparing apples with oranges and are not doing justice to the local situation.’
Differences between Bonaire vs Aruba and Curacao
Another interesting result is the difference between Bonaire on the one hand and Aruba and Curacao on the other. You would expect Bonaire to have a lesser starting position. Entrepreneurs are more often starters and are less educated. That basically makes them more vulnerable to disaster and strong economic fluctuations. The opposite is true on Bonaire. ‘We saw that the continuity of those entrepreneurs was better. On Bonaire, unlike Aruba and Curaçao, entrepreneurs can make use of Dutch tax deferral and corona support measures.’ This also explains that entrepreneurs with staff have a harder time than entrepreneurs without staff in Aruba and Curaçao. ‘Our advice is to also make these arrangements available in Aruba and Curaçao, which are separate countries within the Kingdom. At least it can increase the survival rate of entrepreneurs on Aruba and Curaçao,’ according Lex.
"It is important to make your policy specific so it fits better with the unique differences that exist."Professor Research Group Financial Economic Innovation: Lex van Teeffelen
What does this mean for policymakers?
Policymakers should look carefully at the population of their entrepreneurs. ‘We have known for some time that there is no such thing as the SME or the family business, according Lex. ‘There are major differences between regions, industries, company size and between individual companies as is shown in this SBI. Therefore, it is important to make your policy specific so it fits better. In addition, I have been arguing for some time to execute intervention research to test the effectiveness of the taken measures. For this you need control groups with entrepreneurs who (temporarily) do not make use of the measures. In this way, scientists and policymakers can quickly find out which measures will help in which situations. Current measures are often too generic, leading to many entrepreneurial groups that are unintentionally left out.’
About the Small Business Index
The SBI is monitored quarterly by Hogeschool Utrecht, Qredits and ONL in the Netherlands with additional specific research such as the SBI for the Dutch Caribbean. Within the SBI the HU is responsible for scientific content and analysis. Many of the items and topics stem from previous scientific research. ‘Just like the HU, Qredits and ONL are constantly introducing new topics when compiling the list. We always force ourselves not to ask too many questions. The questionnaire must be completed within five minutes. This means that we sometimes have to make some sacrifices in the scientific field, but we gain in relevance.’
Want to know more?
The report Small Business Index for Aruba, Bonaire and Curacao is digital available on ResearchGate.