Family-owned businesses are vital to Government’s economic growth agenda
Family-owned businesses are the throttle needed for rapid expansion of Jamaica's economic growth projections, says Dr Lawrence Nicholson, head of the Decision Sciences and Information Systems Unit at the Mona School of Business and Management.
Nicholson, who was making a presentation at the Jamaica Exporters' Association's
Family Business Management Workshop in Kingston last week, told The Gleaner that the seat of entrepreneurship is with the family-owned businesses.
"Family-owned business is pivotal in helping to accelerate the Government's economic growth agenda. We all know that the engine for economic growth is MSMEs (micro, small, and medium-size enterprises) and more than 70 per cent of MSMEs could be categorised as family-owned businesses, not only here in Jamaica, but also in the English-speaking Caribbean," Nicholson added.
Just over 3,000 family-owned businesses were registered in Jamaica up to 2006, with projections, according to Nicholson, that the number could double by the end of 2018.
Approximately 81 per cent of these businesses are MSMEs with less than 15 employees. But of that number, 49 per cent are wholesale or retail operations.
Nicholson revealed that revenues generated from family-owned businesses are equivalent to approximately 30 to 32 per cent of gross domestic product in Jamaica.
He pointed out that nearly 80 per cent of all global business operations are family-owned. Wal-Mart is ranked as the world's largest family-owned company with revenues topping US$473.6 billion. according to Forbes magazine.
But while they prosper as big, well-known entities, Nicholson is warning that the focus should not be on a massive expansion in the case of some smaller businesses, as they are needed to fill the void left by companies that were initially designed for a much larger presence.
"I would wish to add that not all MSMEs were designed to be large expanding businesses. And many times, what you find is that many of these businesses come to their demise while seeking to be large, when they are designed to be small," Nicholson said.