Maybe You’re Better Off in the Family Business
The world’s 500 largest family businesses account for a combined USD 6.8 trillion in annual sales, enough to be the third-largest economy in the world (surpassed only by the US and China) and employ nearly 25 million people. These and other findings were released in the biennial Global Family Business Index compiled by the University of St. Gallen, Switzerland, in cooperation with EY. The study highlights the 500 largest family businesses in the world by revenue.
Peter Englisch, EY Global Leader, Family Business Center of Excellence, says: “Behind a successful family business there is usually a story of hard work, dedication, inspiration and sacrifice. It may even be a tale of someone achieving great things and superior growth against incredible odds. Family businesses have the potential to be better, to differentiate themselves in the market, to be more agile in a changing environment, to invest more in innovation and to have superior attractiveness to talent. Family businesses in the US and Germany succeeded in realizing their full potential and became home to more than 2/3 of all Top 500 largest family businesses in the world.”
The index reveals that by geography, Europe leads with 44.8% of the index companies calling the continent home, followed by 27.8% of family businesses domiciled in North America.
Thomas Zellweger, Chair of Family Business at the University of St. Gallen, says: “The prevalence of large family businesses in the US and Europe challenges the idea that the widely held and manager-run company should suppress all other forms of economic organization. Family businesses are thus a future-oriented way of organizing economic activity, and the businesses on the list may tell us how this is best achieved.”
Consumer Products & Retail companies make up the largest share of the index with 40%, followed by Automotive & Transportation (10%) and Diversified Industrial Products (9%). Of the top 10 automakers, 4 are family-controlled companies. In contrast, only 3 family businesses on the list are predominantly active in banking.