Economic Contribution of Family Businesses

Rafael Co, Jae Hyeon Ko, Elisha Soriano, Kaye Sy, Mariel Wong

Global Data Points

Family businesses create an estimated 70 to 90 % of global GDP annually Family businesses in developing countries are often owned by foreign minorities - known as middleman minorities - and tend to be the dominant force in those economies family businesses are active in all sectors of the economy

Global Data Points: Latin America

Brazil o the majority of Brazilian businesses are family owned o family farming is a key sector of the Brazilian economy o Brazilian family-owned farming enterprises employ 77% of the rural workforce and comprise 84% of the rural enterprises in the country Chile o family businesses on the Chilean stock market outperform their non family controlled counterparts o 75% to 90% of all the firms in Chile are family-owned and controlled o roughly 65% of all Chilean SMEs are family owned o family firms in Chile are concentrated in farming, food and beverage, mining, textiles, fishing and fish processing, forestry, and

Global Data Points: North America

Canada o around half of the canadian workforce is employed by a family business creating nearly 45% of Canadian GDP o while many canadian family firms see themselves as competitive in their current markets, 84.2% do not want to invest in global expansion United States o family firms contribute 49% to the total GDP o family firms comprise 80 to 90% of all business enterprises in North America o family businesses employ 62% of the US workforce o more than 30% of all family businesses survive into the second generation. twelve percent will still be viable into the third generation, with 3% of all family businesses operating at the 4th generation level and beyond

Global Data Points: Europe

Across Europe about 70-80% of enterprises are family businesses and they account for about 40 - 50% of employment Family businesses account for about 40% of private sector turnover whereas their share in national GDP or value added ranges from about 20 to 70%a large share of SMEs are family businesses particularly the micro enterprises with less than 10 employees

Global Data Points: Europe

Austria o 80% of all austrian businesses are family controlled, employing between 70 to 75% of all employed austrians

Belgium o about 83% of businesses in the Flemish speaking part of belgium are considered family businesses Croatia o approximately half of Croatias employment is created in family businesses
Czech Republic o 80 to 95% of all businesses operating in the country can be classified as family businesses

Global Data Points: Europe

Denmark o 35 to 95% of all Danish businesses are family businesses Estonia o 90% of all Estonian companies are family owned, creating half of the countrys employment Finland o more than 90% of all Finnish businesses can be categorized as a family business, employing more than 40% of the countrys workforce France o 83% of French businesses are categorized as family businesses employing half of French workforce

Global Data Points: Europe

Germany o 79% of all German businesses are family-owned employing 45% of the country;s active workforce and creating 40% of the national turnover 70% of all Hungarian businesses are family controlled contributing to more than half of the countrys employment

Hungary
o

Iceland

between 70-80% of all Icelandic businesses are counted as family businesses, employing the same percentage of the national workforce and creating 70% of national turnover
almost half of all Irish businesses are family businesses, providing 39% of all employment and producing nearly 30% of national turnover

Ireland o

Global Data Points: Middle East

Greece
o

Families control around 80% of all Greek businesses 85%-90% of all businesses in the divided island state are family owned they created around half of the countrys employment and share of national turnover

Cyprus
o o

Turkey

Global Data Points: Asia

More than 70 % of Asian firms are family owned Philippines o 80% of businesses are family-owned o Most of the big corporations are family-owned or controlled

Global Data Points: Australia

67% of Australian companies are family businesses

Conclusion

Family businesses are the worlds dominant form of business organization They are a major contributor to a countrys economic growth They are the backbone of some of the most vibrant economies in the world today Growth trajectories are quite stable and continuous

References

http://ec.europa.eu/enterprise/policies/sme/files/craft/family_business/d oc/familybusiness_study_en.pdf http://www.ffi.org/?page=globaldatapoints http://www.haygroup.com/Downloads/sg/misc/FOB_Asia_WP2012_sin gles.pdf http://www.dlsu.edu.ph/research/centers/cberd/pdf/bus_focus/Brand_E quity.PD http://quod.lib.umich.edu/m/mfr/4919087.0002.208/--familybusinesses-as-economic-phenomenon?rgn=main;view=fulltext http://www.theatlantic.com/international/archive/2013/05/the-grimreality-behind-the-philippines-economic-growth/275597/