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FBN survey: families' importance to economies

NEWS: FAMILY BUSINESS NETWORK

Family businesses are an integral part of society, but how do they contribute to individual economies? Which countries have the longest-standing family businesses and which ones provide the most jobs? The FBN's new survey has the answers

FBN's first-ever Family Business Monitor survey proves that despite globalisation, most businesses are still controlled by a family, yet rarely receive targeted support from governments.
This pilot edition of the Family Business Monitor, conducted by Gallup Europe for FBN International, surveys eight European countries to reveal that family businesses are predominantly in the manufacturing, construction, wholesale/retail, and property sectors, and on average, provide at least one in three jobs in the economy. 

The report shows that most family businesses are owned, managed or controlled by a single family – often for generations. Across the board, one in 10 businesses is planning to "hand down" control within the next five years.

Despite showing the substantial contribution made to their economies, the report also exposes the relative lack of support offered by governments for family businesses. Only the UK and Sweden have removed inheritance tax on family firms, though Finland and others may follow. Other potential opportunities for targeted support include adapting legal frameworks and providing specialist advice.

Olivier de Richoufftz from the Family Business Network said: "Family businesses are the backbone and engine of the economy. They create and maintain jobs in the long term. Moreover, they have been operating the principles of social responsibility, sustainability and justice between generations for many years – long before they became ethical guidelines in the modern business world. 

"We encourage governments to support the contribution made by family businesses. Tax systems could still do much more to help family businesses increase their productivity and economic output and so benefit the wider economy. The results of our first Family Business Monitor will certainly help us to highlight best practices and advocate for change."

Family businesses by country
Finland – 91% of businesses are family businesses and they account for 41% of jobs. One in three are in the hands of a second or later generation.

France – 83% of businesses are family businesses and they account for 49% of jobs. In 2007 a new "right to succession" introduced an inheritance pact that authorises businesses to give up in advance all or a part of their inheritance to their successors.

Germany – 79% of businesses are family businesses and they account for 44% of jobs. More than three out of four are expected to be transferred inside the family rather than being sold. This compares to only around one in four in France and Spain.

Italy – 73% of businesses are family businesses and they account for 52% of jobs. Nearly one in five have a turnover of at least €2 million. This is around twice the European average for all businesses (based on the 2003 Observatory of European SMEs, published by the European Commission's Enterprise Directorate General).

Netherlands – 61% of businesses are family businesses and they account for 31% of jobs. Business owners who turn 55 receive a letter aimed at stimulating early succession planning and bringing their attention to an information package on business transfer – distributed by the Chambers of Commerce.

Spain – 85% of businesses are family businesses and they account for 42% of jobs. Spanish family businesses are more likely to be involved in the wholesale and retail sector than anywhere else in Europe.

Sweden – 79% of Sweden's businesses are family businesses and they account for 61% of jobs – the highest percentage of employment recorded.

UK – 65% of UK businesses are family businesses and they account for 31% of jobs. The UK has some of the longest established family businesses in Europe with no fewer than 16% in the hands of the fourth or later generation of a family.

Futher editions of the monitor will seek to increase the number of countries surveyed, with an intermediate goal of covering most FBN chapter countries. A full copy of the report is available to FBN members on the FBN website: www.fbn-i.org.

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