How Old Harbour businesses adjusting to the Fourth Industrial Revolution

Heath is a much sort after herbalist known for his natural herbal medicines design to detox and revitalized the body.

On February 8 this year, McCalla with just a click of a button using his credit card made his purchase and two days later had the products delivered at his doorstep.
McCalla was shocked yet impressed that he was able to conduct an online purchase with a small business in his homeland, on par with established global brands.

The online transaction highlights one important step that all businesses irrespective of size must make to survive in the new era of what is known as the Fourth Industrial Revolution. This Fourth Industrial Revolution – also dubbed ‘The internet of Things’ – has been ostensibly hasten by the emergence of the coronavirus (COVID-19) pandemic bedeviling the peoples of the Earth.

From a small manufacturing space along with the right tools, Heath is able to move his products and transact businesses with anyone anywhere on the planet through the use of any smart phone, tablet or computer. 

In an interview with Old Harbour News, Heath tells me “a lot of people wanted my products but because of Covid they can’t fly to Jamaica”.

The heightened demand to make this transition into the dawn of a new age, the entrepreneur forged an alliance with multinational delivery service company FedEx and is now able to deliver his products to clients anywhere in the world within 72 hours of purchase. In the past, Heath said, such a process was carried out through other financial service companies such as Western Union and MoneyGram through which payments are collected before shipping them off to clients overseas.

“People use to say why I don’t launch a website but when I check it out people (web designers) telling me US$3,000, some man telling me J$400,000 out here,” Heath recalled in our chat about the challenges he faced building his business to what it is today.

While those figures quoted seems to be within market range for such services following our own checks, it’s a steep order for plenty small and medium size businesses.
After shopping around the sacrifice was worth it Heath contends.

“More sales have increased since going online,” the Rastafarian businessman told Old Harbour News.

But how other SMEs based in Jamaica’s fastest developing town, are transitioning into a world that is moving more and more into a dispensation that’s becoming fully digitized and automated.

Unlike Heath, Global Laboratories and Health Services is not able to accept online payment just yet, says director Mahalia Watson.

But the South Street-based company is not too far behind into making this important step into the digital divide. At the moment, Watson informed us that her company process all job applications and some level of training exclusively online; and not too far from now appointments and test results will be carried out electronically through its app or website which already exists.

“I continuously update my team to the changes. I continuously redesign our operational procedures,” said Watson before mentioning that they are upgrading their analyzers to do more testing in an efficient manner.

For small businesses cash flow is very crucial to its survival. Therefore, it is critical for SMEs to have almost immediate access to any funds coming in from any sale made online. And that’s the real crux of the issue for a lot of small businesses owners but local banks are seen as major stumbling blocks. It’s a label that the bankers have repeatedly denied.

It’s a gap that local software firm Mobile Edge Solutions is trying to fill, however. “Take using PayPal for example. It is easy for the customers to use and pay. But for you here in Jamaica, this is not a simple process for getting paid. PayPal currently does not facilitate linking to local bank accounts. You therefore have to request a cheque which takes days to prepare and months to clear locally,” it stated on its website.

For SMEs to setup a payment option online via any of the main banks locally the cost to do so is astronomical for the ‘small man’ because of high monthly fees. Fortunately for business owners like Heath, who has a bank account in the United States, that problem doesn't apply to him. 

It’s an area of focus for Jamaica Bedding Limited, renowned for its supreme line of high quality mattresses and other local-made furniture.

But it’s not an immediate priority for the company according to its founder and executive director Errol Lewin, who argued that the cost of setting up an e-commerce platform “is proving to be prohibitive” particularly in the current climate.

“The pandemic has dried up your cash flow,” Lewin said in an interview with Old Harbour News, noting that importing raw materials is very difficult due to the disruption to global trade. “And if you don’t have any cash flow then you can’t pay your bills. That’s a capital outlay right there which we cannot countenance that at all.”

Even after the pandemic it will take many companies to get back up and running to pre-pandemic levels operation-wise.

Businesses in Jamaica, Lewin said, will become more efficient as one of the key lessons arising from this pandemic, but not all SMEs will need to make this switchover to survive into the future.

“It’s not every business will go into this Fourth Industrial Revolution, because sometimes you are better off riding horse and buggy rather than go buy a limousine. The limousine might cost you more than the horse and buggy; and the horse and buggy is achieving what you want to achieve. So it all depends on what you want to achieve and what ones perspective and outlook is,” he said.

“I think it’s a medium term priority right now,” Lewin added referencing the need for having an e-commerce functionality on its website before concluding “our priority right now is just to survive, that’s our immediate priority”.

So while some businesses are prepared to make the sacrifice now, for others it’s a wait and see game.