Increased competition and reduced demand for products are greatly affecting the growth of family businesses in Jamaica, says new research by the Private Sector Organisation of Jamaica.
A survey of 80 family-run companies in the island nation found that the economic downturn – which caused a 15% fall in goods manufacturing and a 50% decline in the mining sector of Jamaica – has not treated family businesses well. Financing troubles, accompanied by high interest rates, is hindering the efficiency of family businesses, said the report.
But despite the low growth rate of family-managed firms – they reportedly contribute around 30% of Jamaica’s GDP – the family sentiment of running the company remains strong.
“There is generally strong family commitment to the businesses, their survival and success; families are strong, committed and loving, but family members sometimes have differing goals and working together can be difficult. Family members are uniquely able to push each other's buttons,” said Robert Blunden, project consultant and professor of family business at Dalhousie University in Canada, in an article published in the Jamaica Gleaner.
The businesses surveyed, as part of a three-year project to determine the efficiency of family companies in Jamaica, had individual revenues of less than J$172 million (€1.5 million). Jamaica has roughly around 3,000 family businesses, according to PSOJ, with around 70% still in the first generation of ownership.