Family businesses account for as much as two-thirds of firms in the UK private sector and employ 40% of private sector jobs, according to a report commissioned by the Institute for Family Business.
The report found that family businesses in the UK are predominately made up of small and medium-sized enterprises, and employ 9.2 million jobs, or two in five private sector jobs.
“To place this in context, this is around 50% more than the entire UK public sector,” said the report, which was prepared for the IFB by Oxford Economics. “This makes family firms the largest source of employment in the private sector.”
The research also found that family businesses generated revenues of £1.1 trillion (€1.28 trillion) in 2010, or 35% of the entire turnover in the private sector. Family firms are also estimated to have contributed £81.7 billion in tax receipts, or 14% of total government revenues in 2010.
The research comes at a time when the UK government is highlighting the importance of entrepreneurship as crucial to the recovery of the economy that has been stuck in either recession or weak growth during the last three years.
Vince Cable, the secretary of state for business, innovation and skills in the coalition government, said in a forward to the IFB research that: “The government is firmly on the side of enterprising family businesses and enterprise more generally.”