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30 July 08 Family firms ‘vital’ to success of UK economy

Greater emphasis should be placed on the value of family-owned businesses and their contribution to the UK economy, a new report has argued.

According to new research conducted by Credit Suisse, the UK could benefit from replicating the success of family-run enterprises in the rest of Western Europe.

The study found that family firms account for just 8% of British business, while in Germany the figure is significantly higher at 36%, followed by France with 30%.

The report’s authors claim that family businesses suffer lower survivorship rates because they are more likely to adopt a long-term and ‘less aggressive’ approach to the development of the firm.

Michael O’Sullivan, head of UK research for Credit Suisse’s private banking businesses, said the UK should emulate the focus on and support for family firms that is prevalent in neighbouring countries.

Mr O’Sullivan said: ‘Ultimately, one of the reasons for the relative stability of larger economies in continental Europe is the significant presence of family businesses which, at least on a stylised basis, tend to be less leveraged and generally have a longer-term focus on investment and innovation.’