The Prime Minister has explained that wealth creation through innovation should be a normal return on the investments made in education, and other social services in Barbados. I agree with him. However, the seed capital that one initially uses to fund the development of these innovative products will normally come from one’s disposable income.
The Government must be commended for doing so much to assist the “have-nots” in Barbados. However, as long as they remain have-nots, they will continue to spend all of their disposable income on essential services, and will still require additional assistance from the haves.
The haves are those who “have” enough to help themselves and others. They normally have enough to give to their churches, dependents, professional and social organisations, PTA and Old Scholars associations, the various community and national appeals for assistance, the poor and needy whose income only covers basic necessities, etc. From where do the haves give? They give from their disposable incomes.
There is a third group whom we can call the “have-mores”. They “have more” than enough. However, the principal difference between the haves and the have-mores, is that the have-mores are not vulnerable to high taxes. The high taxes that do not affect the have-mores can easily send the haves into the ranks of the dependent have-nots.
The have-nots are normally exempt from paying taxes on their incomes or property. The have-mores have learnt to use the loop holes in the regulations to avoid paying what Obama calls “their fair share”. Some haves have also learned this skill. However, the tax burden is mostly felt by the haves, who are normally called the “middle class”, or the class between the financially dependent have-nots and the financially independent have-mores.
Many in this middle class have learnt to maintain their position by carefully managing their disposable income. Thus, they are able to pay a home mortgage, feed and clothe their children, and give to others. What they have not generally done is to create wealth. They have not considered that the investments in their education were meant for more than just maintaining a comfortable lifestyle. They have not realized that they have something valuable within them that can benefit humanity.
After working for some time, most people intuitively know how they can be more effective at what they are responsible for. It is Rule No.3 for life on Earth: Only God is perfect, everything else can be improved.
Every experienced automotive mechanic knows how to make an engine run more efficiently. The mechanic does not get the opportunity to capitalise on this knowledge, because the car manufacturing company’s research and development department continuously improves the last year’s car model. However, every manufactured product, service and process can be improved, and the actual innovative idea can be found in any user of the product, including users here in Barbados.
There are three major impediments to innovation. The first one is unbelief. If people do not believe that they can actually innovate, then they most likely will not. That is why it is important that Barbadians are taught the rules of this life governing human behaviour.
The second impediment is lack of compensation. If people believe that they can find an innovative solution, but do not believe that they will derive any benefit from it, then the innovation will likely remain an idea. Government can assist in overcoming this obstacle by allocating $5M annually to provide development grants of $100,000 for the top 50 viable innovative products. I believe that this will usher in a culture of innovation in Barbados.
However, the single greatest impediment to innovation is a lack of personal disposable income, which will be used as seed capital to initially develop the innovative idea. In this regard, the Government should seriously reconsider the high 0.45% and the unconscionable 0.75% property tax rate on single family dwellings.