The Institute for Family Business (IFB), an organisation supporting and promoting the UK family-owned business sector through events, networking, representation, leadership and analysis, has recently released a report which showcases the vital role family firms play in the east of England’s economic growth and development of the UK economy, particularly in London. According to the annual UK Family Business Sector Report, compiled by Oxford Economics for the Institute for Family Business Research Foundation, family firms seem to be fundamental for the east of England, where they make up over 90 per cent of all private sector firms. There are almost 480,000 family-run firms in the east of England, while nationwide the sector has expanded to 4.7 million businesses.
With an estimated 800 new jobs created each day in 2015, the UK’s family business sector seems to be a driving force of economic progress. Data provided by the research shows there are almost 780,000 family run firms in London, of which 100,000 new businesses were created in 2015, making up almost one in five of all family businesses across the UK. London-based family firms employ 2.1 million people, the highest region in the UK. According to the study, the 2015 annual turnover in family firms increased by six per cent reaching £1.4 trillion nationally.
Speaking about the new report, Elizabeth Bagger, the Executive Director of the Institute for Family Business said: “This year’s report really reinforces the immense contribution family firms make to our economy and communities – especially here in London, which has a buoyant and thriving family business network. Their stewardship and clear commitment to a strong and sustainable future is hugely inspiring, and the growth of the sector demonstrates that the strong values within family firms continue to deliver real social and economic benefits.”
The economic figures included in the report demonstrate family businesses have innovative and sustainable potential. Their continued investment and commitment to growth has seen the creation of 300,000 new jobs since 2014, boosting the overall family business sector’s employment figure to 12.2 million, almost half (47%) of all private sector employment and more than a third (36%) of the UK’s entire workforce. Whether large or small, local businesses seem to demonstrate an increased role in the UK’s economic advancement and it may be essential their value is recognised and championed. In addition, family businesses seem to be incubators of entrepreneurial and innovative talents, which continue to invest, grow and create jobs. Long-term thinking appears to be at the heart of family businesses and their continued success may be directly linked to access to appropriate and stable finance.
The recent change in the UK’s government seems likely to result in a plethora of new initiatives, many of which may have a direct impact on family businesses and their owners. The Pound Sterling fluctuations since the June Brexit vote has created a potential for British exports to become more affordable and therefore more attractive to foreign buyers. Provided the foreign demand for British goods increases and may be sustained, the British firms producing these goods, including family businesses, may see an opportunity to expand and grow abroad.
Based on the established importance of family firms for the overall British economy, governmental as well as independent organisations such as IFB seem to play a pivotal role in supporting such ventures and providing a trusted environment for business owners to share their experience, learn lessons from their peers and work together to ensure their family businesses have a bright and successful future.
How may family businesses help the UK’s post-Brexit economy thrive?