Winter break: Students explore Cuban commerce

Posted at 6:00 AM, Jan 19, 2016
and last updated 2016-01-19 06:00:44-05

CINCINNATI - Business students from Xavier University visited Cuba recently and came back impressed with the island nation’s entrepreneurial potential.

“The attitude was different than I expected,” said Scott Quertinmont, a junior studying international business at Xavier’s Williams College of Business. “It’s been this socialist regime for almost 60 years now. But just everything we saw, people were finding ways to earn an extra buck.”

From a thriving black-market trade in Internet-access cards to the organic farming techniques that Cubans have refined in the absence of chemical fertilizers, Xavier students saw multiple examples of business innovation that could fit nicely into Cincinnati’s startup culture.

Downtown Havana

The trip to Cuba is the second since 2014 for Xavier’s international business program, which offers about 10 study-abroad options each year. Xavier Marketing Professor Tom Hayes participated in both Cuban excursions. He sees huge potential for Cincinnati companies to learn from and partner with Cuban entrepreneurs.

“Cuba is sort of frozen in 1959,” he said. “Since the fall of the Soviet Union, they basically have no building supplies. It’s amazing to see how people keep things together and make them work. Cubans never throw anything out. They just figure out how to make it work someplace else.”

Vintage cars are common in Havana

Cuba’s potential is rising as an emerging market for U.S. companies, after the Obama administration announced plans to normalize relations with Cuba in December, 2014. A U.S. Embassy opened in Havana last August and some travel and trade restrictions have been loosened, but Republicans in Congress have balked at officially ending a 50-year-old trade embargo that ended business ties between the countries.

Hayes predicts there will be tight restrictions on business relationships even after the embargo is lifted, but his group sensed a definite eagerness on the part of Cuban farmers, accountants and community-development organizers to partner with their neighbors to the north.

“Everywhere we went people would toast to bettering relations,” Quertinmont said.

“Not only do I think we’ll have businesses that will go there, I think there are things we can learn from them as well,” said Heather Hotlosz, a Cincinnati accountant who is pursuing an MBA degree at Xavier.

Hotlosz (left) and Hayes (right) hold the XU flag at University of Havana

Hotlosz is a CPA in the Downtown office of Barnes Dennig. She was fascinated by operations of Scenius, an “economic services cooperative” in Havana that is structured like a farming coop, but runs like a U.S. accounting firm. The 140-employee operation is creating a new job ever three days and has a reward-based compensation system that lets staffers earn up to five times the average Cuban salary.

Hotlosz is talking to leaders of Scenius about establishing a cross-training relationship in which Cincinnati and Havana accountants can learn how their trade is practiced in both countries.

She sees similar potential for idea exchanges in other industries, including organic farming and community development.

The group visited an organic farm that delivers high yields with vermiponics, which involves the creation of a nutrient-rich compost with worms and water. In a country that lacks chemical fertilizers, Cuban farmers developed a more sustainable approach that produces a new harvest every three months.

“They said the hardest workers on their farms are these worms,” Queritnmont recalled. “It was amazing the yields they were turning out when all they were using were worms and water.”

Another example is an experiment in social entrepreneurship that the group visited in Havana. It is a commercial district built around Artecorte, a hairdressing school and museum for stylists that developed with the blessing of Cuba's government in Old Havana. Stylists, restaurant owners, neighbors and activists turned a once-empty alley into an economic engine, with a barber-themed playground for kids, a medical facility and dining hall for seniors and private security and street-cleaning services funded by the businesses operating in the district.

Xavier students on the wall of hair styles at Artecorte

Hotlosz said Cincinnati's neighborhood development organizations could learn from the venture, as the district became a unique tourist attraction that provides employment, job training, social services and recreational activities all within a few city blocks.

“There is such a strong sense of community and taking care of each other in the Cuban people,” Hayes said. “Imagine Over-the-Rhine and imagine entrepreneurs taking care of everything not the government. That’s what it would look like. This would be an example of a social 3CDC. Instead of 3CDC, you would have these people banding together on their own.”