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David Salmon | Mittelstand: The new business model for Jamaica

Singapore is often cited as possessing the ideal development model for Jamaica given the two nations’ location in relation to major trading partners and the similarities of their early post-independence expansion.

While both countries may have started out at similar levels of economic development, the divergent paths they took makes it extremely difficult for the model to be ­replicated in its current form.

On the other hand, Germany presents another alternative for Jamaica as we can learn numerous lessons from their Mittelstand. The Mittelstand is simply the German equivalent of micro, small- and medium-sized enterprises (MSMEs), which serve as the backbone of the country’s economy.

Ninety-nine per cent of all German companies comprise the Mittelstand. They employ over two-thirds of the nation’s workforce and are responsible for over two-thirds of the nation’s exports. These companies are manufacturing oriented, are usually owned by families, and produce products for niche markets.

Immediately, comparisons can be made between Jamaica’s MSMEs and the German Mittelstand.

Dr Lawrence Nicholson, from the Mona School of Business and Management, noted, “Family owned businesses are pivotal in helping to accelerate the Government’s economic growth agenda. We all know that the engine for economic growth is MSMEs, and more than 70 per cent of MSMEs could be categorised as family owned businesses.”

By 2006, over 3,000 of these firms were registered, with the ­figure expected to double up to last year.

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Article from: The Gleaner

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