What do family businesses mean for the economy?

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Long-term vision, rootedness, longevity and stability are some of the most commonly cited attributes that define family businesses, but these companies are also crucial to our economy. Do you know why?

It is estimated that in Spain alone there are more than 1.1 million family businesses. More often than not, these companies do not make the headlines in the media, and rarely are they discussed as much as they deserve to be –given their importance in the national economic fabric– in financial or political spheres. In fact, family businesses are crucial to the economic future of any country, especially at times when rootedness, long-term vision and stability are necessary to turn the current social and economic situation around.

We are talking about a type of company that creates 67% of the country’s private-sector employment, a total of more than 6,580,000 jobs, and which generates 57.1% of the private sector’s GDP. Similar figures can be found outside Spain. One example is the European Union, where there are 14 million family businesses that generate more than 60 million jobs in the private sector. Another example is the United States, where this type of enterprise makes up 80% of the business network and generates half of private-sector employment.

Although the numbers speak for themselves, it is sometimes necessary to take a closer look to find out what they really mean, an investigative undertaking that organisations such as the Family Business Institute engage in on a daily basis. As a result of these efforts, we know that for every million euros of turnover, family businesses have a higher employment ratio than non-family businesses, as can be seen in the following chart:

Moreover, family businesses have been leaders in employment generation to date, with higher employment growth rates than non-family businesses. Employment has grown by 9.49% in family businesses with 25-49 employees, as compared with 7.6% in non-family businesses; by 10.18% in businesses with 50-99 employees as opposed to 6.86% in non-family businesses; and by 10.04% in businesses with 100 or more employees, as compared with 5.88% in non-family businesses.

These are the figures that vouch for a type of business whose values go hand in hand with investment in long-term value generation and a commitment to stability, growth and sustainability, terms that are the order of the day. An example of this are enterprises such as Velatia, a family, industrial and technological group which has been operating for over 50 years, comprising more than 3,300 professionals who, through different companies, offer advanced technological solutions in line with the development of smart cities.

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