Despite the big role family businesses play in employment generation and economic activity in countries worldwide, governments are doing little to support the sector.
This is one of the main findings of PwC’s annual survey of family businesses, which looked at a host of issues affecting the sector from succession to government policy. Out of the 27 countries surveyed, only family businesses in three – Singapore, Malta and Turkey – felt their governments were doing everything they could to help them.
Family firms in all the other countries surveyed were dissatisfied with their government’s policies towards them. Some were very dissatisfied, including those in Australia, Denmark, France, Romania, the US, Italy, South Africa, Russia and Greece.
Family businesses often felt that government policies tended to favour big multinationals, partly because of their threats to relocate if they aren’t given tax breaks or other incentives. But there is no need for governments to make the same effort for family-owned groups, said the report. That’s because most of them have strong local ties, meaning that they are highly unlikely to move to a more advantageous jurisdiction.
The report said family businesses want to see more targeted support for their sector from governments, including better tax incentives to make it easier and less costly to pass their business to the next generation. Family businesses also want more financial incentives and tax reliefs for start-ups, and additional grants and incentives to support research and development. They also want more access to long-term finance.
Despite their concerns with government policy, family firms were bullish about their prospects and many of them were achieving strong growth. The survey said 65% had grown sales in the past year, compared with less than half in 2010. And more than 80% of the 2,000 family businesses surveyed said they anticipate steady or aggressive growth in the next five years.
“Given the low levels of confidence in other sectors of the economy, we believe this is powerful proof of the significant role family businesses can play in creating jobs and stimulating recovery,” said the report.
Among other issues looked at in the survey were size and the family business, succession issues and skill requirements.
The full survey is available here.