A NEW analysis of business in the Republic has found a yawning gap between the productivity levels of family-owned firms and that of their non-family-owned counterparts.

The analysis of Annual Services Inquiry 2005 data by the Central Statistics Office (CSO) found labour productivity - measured by gross value added (GVA) per worker - of non-family owned firms was more than twice that of their family-owned rivals.

The gap was greatest between companies in the transport, storage and communication sectors where non-family owned firms generated GVA of € 134,000 per person compared to € 48,000 per person for their family-owned rivals. In the hotel and restaurant trade - where the gap was at its smallest - non-family-owned firms produced GVA per person of € 28,000 compared to € 22,000 per person for family-owned peers.

The report uncovered willingness to adopt so-called information and communication technology (ICT) - such as e-mail and having a website - as a major distinguishing factor between family-owned and non-family-owned companies. Higher levels of Irish ownership, lower levels of capital spending (family-owned firms accounted for 33 per cent of spending compared to a 46 per cent share of the total services sector) and a negligible share of overall service exports also appeared to hold back family-owned firms when compared with their non-family rivals.

However, research presented alongside the CSO study yesterday suggested family-owned firms are catching up. "Family firms have increased productivity growth rates in [ the] retail and wholesale sectors...there is evidence of some closure of the productivity gap between 2004 and 2005," according to Mary Keeling, managing consultant at the IBM Global Centre for Economic Development Research.