Osman M. Badat: “We need to breed entrepreneurial minds”
Managing Director of Harel Mallac Global and well known Business Commentator, Osman Badat believes that the SMEs will always be a key contributor to the Mauritian Economy. He believes that it is high time misconception between SMEs and micro-entities are cleared.
How is the Small and Medium Enterprise (SME) sector doing currently?
The SME has been and will always be a key contributor to the Mauritian economy. The real questions we need to ask are: How can this contribution be enhanced? How can we make new SME ventures more sustainable (over 50% of new SME fail within one year)? How can we better support SMEs financially? How can we open access to new markets for SMEs? How can we make SMEs more innovative?
Can we still say the SMEs are our economy’s backbone?
Definitely. There are more than 100,000 registered SMEs which contribute 40% of GDP and employ more than 280,000 people. There is a general misunderstanding between SMEs and micro-entities. This perception needs to be corrected.
Today, what are the pitfalls for SMEs?
To start with, not doing enough market research, not having a proper plan and not getting proper advice from professionals like accountants. Too many entrepreneurs get bogged down in details and don’t focus on their core competencies and business. Poor financial management, poor customer service and neglecting technology and innovation are other common pitfalls.
In other societies, students work during their school holidays, they learn how to save money and they are exposed to work life, finance and entrepreneurship at a relatively young age. Unfortunately, we don’t have this culture here."
The government has been encouraging young blood to open up their business. Is it a right decision to encourage young graduates to open up a business when they have no experience?
Yes, definitely. But you need to breed entrepreneurial minds. We need to inculcate the entrepreneurial blood at school level. In other societies, students work during their school holidays, they learn how to save money and they are exposed to work life, finance and entrepreneurship at a relatively young age. Unfortunately, we don’t have this culture here. We need to build a whole eco system. What the government is doing is good but we need more.
In what fields, do you think, young graduates can launch a small business if they have the will of being an entrepreneur?
FinTech and Artificial Intelligence are the ones that spring to mind. I often say that SME is not a ‘sector’ per se. It’s more an enabler. What I mean by this is that we can have an SME component in the Healthcare sector or in the Educational Sector or in the Transport Sector. By looking at it this way, it’s easier to study the whole supply chain in a specific sector like Healthcare, Educational & Transport and see where the potential to enhance productivity and efficiency in these sectors is. This could encourage SMEs to come up with a new tool, application or process.
Mauritius has already a small market but we see entrepreneurs opting for fields which are quite saturated like making snacks or pickles. Which fields have remained untapped so far?
Again we should differentiate between SMEs and micro-entities. Fintech and Artificial Intelligence, as mentioned earlier, are untapped sectors. We need more innovative ideas.
What we are not doing are SME Fairs where SMEs showcase their products exclusively to larger organisations who can engage SMEs for certain processes rather than doing it inhouse."
Much emphasis is being put on innovation and creativity. Do you think our SMEs are innovative?
Not enough. There is much work to be done. There is a lack of direction on how businesses should innovate. SMEs are unsure of how they should innovate their work processes, business model, company culture and other areas. Innovation should serve a purpose or solve a problem.
How, according to you, can we make our entrepreneur more innovative and creative?
By creating a culture of innovation. By thinking out of the box. By giving more incentives like tax holidays and credits. Affordable loans for innovative ideas. Kaffeeform is a German company that turns coffee grounds into coffee cups when most people would only think of throwing the grounds away.
Is it not time to review the way of carrying out SME Fairs and “Salon des PME”?
It’s too much of the same thing year in year out. What we are not doing are SME Fairs where SMEs showcase their products exclusively to larger organisations who can engage SMEs for certain processes rather than doing it inhouse. Fairs should be used as platforms to promote ideas and products rather than just sell their products.
On the other hand, do we have the ideal platforms to launch start-ups that rely on new technologies such as artificial intelligence or 3D printing?
We need to start somewhere. 3D printing and AI are not technologies that just fell from the sky. There has been momentum created for some time. We need to catch the train at the right time. This is what I meant earlier by saying we need to create the right eco-system. We need the educational component which has to start from school, we need input from the government, we need financing from banks, among others.