Bahamas must ‘embrace disruptive change’ culture

photo

Julian Brown

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas must “embrace disruptive change” and not permit a minority to derail economic reforms that benefit the rest of society, a BISX-listed company’s president argued yesterday.

Julian Brown, who is also Benchmark (Bahamas) chief executive, told Tribune Business that the Bahamas Electrical Workers Union’s (BEWU) concerns over the increased penetration of solar energy was a prime example of resistance to technology-driven change that can improve living standards for the majority of Bahamians.

Rather than fight the inevitable, Mr Brown urged the BEWU and the Bahamas Power & Light (BPL) workers it represents to push their employer to develop its own solar unit and re-train staff so they can install the technology.

Speaking out following the concerns expressed at the weekend by the union’s president, Paul Maynard, the Benchmark chief said easily-accessible data showed The Bahamas ranks near-bottom in the world on renewable energy usage despite the ample amount of sunshine and other natural resources it enjoys.

Renewable penetration in The Bahamas was pegged at just 1.1 percent of this nation’s current energy mix, worse than all European nations bar Gibraltar, and better than only five other Caribbean competitors.

Mr Brown argued that The Bahamas “should be leading the market in solar transformation”, adding that its failure to more aggressively adopt this and other renewable energy forms illustrated why its economy and living standards continue to lag.

He reiterated that reduced energy costs would lead to “an explosion in entrepreneurial and business opportunities” which could not be further delayed by BPL union concerns about the impact on their jobs and livelihoods.

The Benchmark chief also urged the Government to develop a comprehensive plan to “get out of business” through privatisation of state-owned enterprises (SOEs) such as Bahamasair, arguing that all administrations had shown themselves to be “inherently poor managers” of these entities.

With ample surplus cash in circulation, supported by relatively low interest rates, Mr Brown said a properly-crafted privatisation strategy would further empower local entrepreneurs and give them the space needed to unleash their creative ideas.

Calling on Bahamians to place “national development” above their own narrow interests, he argued that the Government would “continue to change every five years” until an administration realised that this nation’s long-standing economic model will not get it to where it needs to go.

“We cannot look at something that is disruptive to a small part of our economy and ignore it when it is so beneficial to the larger part of our economy,” Mr Brown told Tribune Business. “We believe it is more important to look at the issue of solar energy and its disruptive capabilities in the context of its total benefit to the Bahamian economy and our national development.

“For the Bahamas to succeed in the 21st century we cannot, as a nation, focus our concerns on the benefit of the minority but, rather, the transformational impact for the majority and the country.”

Mr Brown argued that the savings generated for businesses and households by reduced energy costs would be of incalculable benefit, far outweighing any negative impact to BPL and its employees from increasing numbers of customers switching to renewable energy and moving off-grid.

His comments came after Mr Maynard described solar energy as BPL’s “competition”, and a potential threat to his members’ jobs and others at the utility, especially since its best-paying customers in high-end communities such as Lyford Cay were increasingly adopting the technology following the start of its self-generation programme.

Mr Brown, emphasising that he was not trying to pick an argument with the BEWU leader, explained: “I’m saying to Mr Maynard: I understand there is a problem. Perhaps his response should be to convince the Government that they need to create a base within BPL to transition to this new form of energy.

“Maybe the technicians that currently do fossil fuel-based technology can be transferred to solar. We have a disruptive technology that is disrupting the labour force but all the labour force needs to do is be retrained. That’s what they need to do, and what we need to do as a country. We need to embrace the change. Change is here.

“While Mr Maynard is concerned about the disruptive aspects of solar energy, the positive contribution of this new source far outweighs the concerns and, no matter how efficient the after-sales service of BPL becomes it will not - and cannot - stop the wave of renewable energy that has been unleashed,” Mr Brown added.

“Unless BPL adjusts its business model and embraces the change, like the dinosaur it will die. We note that some change in the generation plant of BPL is under way and, while that is significant to the future of the company and the cost of electricity for the Bahamian economy, it still is not the most efficient solution for the company or country. Therefore, BPL will need to make further adjustments to its generation plant over the next decade.”

The Benchmark chief added that “the ripple effect of drastically reduced energy costs” via solar and other renewable forms would result in an “explosion of entrepreneurial opportunities and businesses” - advantages that were impossible to ignore.

“Let’s open our eyes,” he told Tribune Business. “There are many opportunities opening up through the change in the way we do business that will improve the economy, and his [Mr Maynard’s] group will be a beneficiary of it if they embrace the change.

“The failure for us is, if we fight the change we will remain where we are, and the whole world passes us by and we will not be able to catch up if we don’t get with this change that has occurred. Understand the change, embrace it and get on with the adjustment.”

He compared the adoption of solar energy to cell phones, questioning where The Bahamas would be if it still relied on landlines as its primary method of voice communication.

Many observers would argue that The Bahamas has done a poor job in managing, and adjusting to, change since the beginning of the 21st century, instead preferring to maintain the status quo while other countries leapfrog it by embracing new technologies, regulatory reforms and other advances.

The Bahamas has also traditionally placed the needs of workers in state-owned enterprises such as BPL, and their unions, ahead of those of the wider population through what many believe is a strategy designed to secure labour votes at the next general election.

Mr Brown, meanwhile, called on the Government to commit to a well-planned privatisation strategy to divest itself of loss-making SOEs that represent a continual multi-million dollar drain on the Public Treasury and Bahamian taxpayer.

With decades of results confirming that the Government was a poor manager, he added that it was no coincidence that the only troubled commercial bank in The Bahamas was Bank of The Bahamas - the one that was majority state-owned.

“We need to create a long-term plan to privatise all these operations that don’t belong in government,” the Benchmark chief told Tribune Business. “The Government does not belong in the private sector to that degree, and it would free up capital in government.

“BPL, Water & Sewerage, Bahamasair are costing the Government millions of dollars in losses. The Government are inherently poor managers of businesses like that. They’re better off out of it, privatising them, finding other partners to replace it and run it much better.

“When are we going to learn the lesson?” Mr Brown asked. “There’s a lesson to be learned. To my mind, if we learn the lesson we will empower our entrepreneurs and get out of businesses where the Government shouldn’t be, and the economy would be a lot further ahead.

“Until some administration admits this and plans for it to happen, we are - in my view - going to change the Government every five years. We have to get progressive. This is not about politics. This is about national development, national interest. We have to get away from ‘what is good for me’ to ‘what is best for all’.

“Sometimes a few of us are going to get hurt for the benefit of the larger position. It happens. That’s the way the world works. Until we understand it and embrace it, we will continue to make the same mistakes over and over... We’ve done a good job to this point, but the model that got us here is not the one to take us over the hill now.”

Mr Brown said Bahamians needed to have a “national discussion” on these issues, and added: “If there is one thing the twenty-first century showed us when ushering in this new millennium is that change will be a driving force powered by technology.

“I can recall my dad always reminding me that the only constant in life is change. He would conclude by saying: ‘Understand it, embrace it and define how it will impact you so that adjustments can be made, otherwise like the dinosaur you will become extinct’.”

With entrepreneurs “chomping at the bit” and the capital markets primed, Mr Brown argued that this was “the perfect environment” in which to sell-off SOEs to Bahamian investors. “For the Bahamian economy to grow its gross domestic product back to 3 percent we will need to unleash this energy,” he added.