In this current era of tech driven startups and new trends of entrepreneurship the cornerstone of family business has often been overlooked. In this post, I want to delve into the significant influence family businesses wield over both local communities and the global economy, emphasizing practical insights and real-world examples.
Family businesses represent a substantial segment of the global economy. According to the Family Firm Institute, these businesses account for two-thirds of all businesses around the world, and they create an estimated 70-90% of global GDP annually. In the United States alone, family businesses contribute over 50% of the GDP and employ 60% of the workforce.
A compelling example of the potential of family businesses can be seen through my recent visit to Jinju, South Korea. This city is not only steeped in history but also the starting point for many of Korea’s most successful enterprises, such as Samsung, LG, and Hyosung. These companies began as small family ventures and have grown into major players on the international stage, showcasing the scalability potential of family-run operations.
These companies succeed not merely through commercial prowess but through a commitment to quality and community—a theme that resonates with the founding principles of Premo, which I started with my father. We strive to embed humane entrepreneurship principles into our business model, focusing on the well-being of our team and community engagement.
The journey of family businesses is fraught with unique challenges. For example, succession planning, maintaining family harmony amidst business pressures, and modernizing business practices without losing the essence of the family legacy are common issues these businesses face.
However, solutions and support mechanisms are evolving. Educational programs specifically designed for family business owners can offer immense value. For instance, the Family Business Network and the Wharton School of the University of Pennsylvania offer courses and workshops that help family business owners navigate complex issues from governance to global expansion.
Governments can also play a supportive role by offering tax incentives, simplifying regulatory processes for family-owned SMEs, and providing grants for adopting sustainable practices. Such measures not only help sustain business operations but also encourage these businesses to be stewards of environmental and social governance.
Moreover, institutions like universities and community colleges are crucial in fostering the next generation of family business leaders. They can offer specialized courses that focus on balancing traditional business practices with innovative, modern strategies.
Globally, family businesses are not just economic entities but custodians of heritage, culture, and community spirit. For example, the Tata Group in India not only plays a significant role in the country’s economy but also in philanthropy, focusing on areas like education, health, and rural development, reflecting the group’s commitment to giving back to the community.
To summarize, family businesses form the backbone of our global economy. They are more than just businesses; they represent a way of life that promotes resilience, community involvement, and mutual respect.
Let’s recognize and support these key institutions. By doing so, we ensure that family businesses continue to thrive and inspire future generations, contributing to the growth and stability of economies worldwide.
By:Skye Blanks, Chief Operating Officer at the International Council for Small Business and Co-founder of Premo
