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Research - 30.04.2015 - 00:00 

Global Family Business Index

The Center for Family Business at the HSG joined forces with the company EY to publish the Global Family Business Index for the first time. The list reveals the world’s 500 largest family businesses. Combined, they employ about 21 million people, i.e. almost as many as live in Australia.
Source: HSG Newsroom

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28 April 2015. Family businesses usually tend to shun publicity. This is likely to be one of the main reasons why we know so little about them. However, their public perception has been on the increase in the last few years. What is known is that in most western countries, the proportion of family businesses exceeds two thirds.

Family Business Index published for the first time

In Switzerland, approx. 88 per cent of all enterprises are considered to be family businesses; in Germany, they exceed 90 per cent; and in Austria, they amount to about 80 per cent. The phenomenon is not limited to German-speaking countries, though. In Europe as a whole, their proportion reaches an average of 70-80 per cent, and the picture is also very striking in the US, where roughly 90 per cent of all companies are deemed to be family businesses.

Most family businesses are small and medium-sized enterprises, but there are also large examples among them. The University’s Center for Family Business has published the Global Family Business Index in cooperation with EY Global Family Business Center of Excellence. The Index lists the 500 largest family businesses worldwide.

Big corporations in North America and Europe
Most large-scale family businesses are based in North America, closely followed by Europe. The US is also home to the family business with the most employees by far, the retail giant Walmart, of which 50 per cent is owned by the Walton family. This giant employs some two million people in the US.

In Europe, the biggest family business is called Volkswagen AG. This company, with its owner family Porsche-Pïech, alone employs more than half a million people worldwide; at the same time, it is the world’s second largest family business in terms of both turnover and the number of employees. Oceania (Australia) and Africa have far fewer family businesses, whilst Asia has more.

If we take all the 500 companies listed on the Index, the family businesses together employ about 21 million people and generate a turnover of USD 6,523bn. By way of comparison, the turnover of these 500 largest family businesses is tantamount to approx. ten times Switzerland’s gross domestic product (USD 685bn in 2013, according to the World Bank), and they employ about twice as many people as Austria has inhabitants, or almost the same number as that of the inhabitants of Australia.

Often, the fourth generation is already at the helm
The Global Family Business Index contains some well-known names, such as the Kamprad family (IKEA), the above-mentioned Porsche-Pïech family (Volkswagen AG) and the Hoffmann-La Roche family (Roche Holding). Many family businesses, however, are largely unknown in public although they have been in operation for a very long time. Family businesses are known for thinking in the long term and they set great store by the succession in their companies; on average, the world’s 500 largest family businesses are headed by the fourth generation.

Incidentally, the oldest enterprise listed on the Index is Japan’s Takenaka Company. This firm has been in existence since 1610 and operates in the real estate sector. Family businesses work in all sorts of economic sectors but are particularly prominent in consumer goods, the wholesale and retail trade and in the automotive industry. Among the world’s ten biggest car manufacturers, three are family-owned, namely Volkswagen, BMW and Ford.

The Global Family Business Index is available at http://familybusinessindex.com/

Bild: Photocase / pontchen

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