The Foundation for Family Businesses has developed a model that can be used to illustrate the impact of proposed laws on family businesses at an early stage. The objective of the test is for family companies to receive the consideration in the legislative process that they deserve as a cornerstone of our economy.
In a long-term historical study, the Foundation for Family Businesses explains why such fundamentally different business landscapes arose in Germany and the United States. Family companies in Germany have evolved into a strong pillar of the German economy over centuries. But their role in the United States is smaller. The study explores the reasons why.
The punitive tariffs and countervailing customs duties imposed by the USA lead to substantial competitive disadvantages for family businesses in Europe. A study commissioned by the Foundation for Family Businesses draws the conclusion that the trade disputes between the USA and the European Union are meanwhile spilling over to industries that have nothing to do with the original trade conflict. Family companies are affected the most by countervailing customs duties imposed by the USA. “In future, it is likely to be the case more frequently that trade disputes result in collateral damage to uninvolved industries,” the study’s authors warn. For this reason, they recommend the establishment of European compensation funds for companies from the EU.
The European Union needs more ambitious industrial policies to prevent its being completely overshadowed by the economic blocs of China and the United States. For this reason, the Advisory Board of the Foundation for Family Businesses has called for the European Commission to pursue a resolute strategy. “We have to shake off our torpor if we want to avoid being relegated from the Premier League when it comes to global trade,” the board’s members said.
Irrespective of political tensions and concerns about democracy and the rule of law, recent years have seen Turkey, Russia and China expand their attractiveness as business locations. This was one conclusion of the “Länderindex Familienunternehmen – Emerging Markets” (“Country Index for Family Businesses – Emerging Markets”), a study which the Leibniz Centre for European Economic Research (ZEW) carried out for the Foundation for Family Businesses. The study ranks Russia in first place, followed by Turkey and China.
The Board of Trustees of the Foundation for Family Businesses has elected Dr Ulrich Stoll to the Executive Board. A family business owner himself, he will focus on expanding the foundation’s international activities. “In my view, one of my responsibilities is to strongly position the foundation as a leading expert in the area of family companies, including on the international stage,” Stoll says. The non-profit Foundation for Family Businesses is already the largest promoter of research on family companies.
German companies are asking the European Union to improve business conditions in the economic region. Eighty-six percent of the survey respondents from a representative sample of companies comprising all size classes and industries stated that the EU needed to do more to boost the EU’s global competitiveness. That figure even rises to more than 95 percent among Germany’s 500 largest family businesses. New communitised sources of money and social transfers are met with scepticism among German companies.
Family businesses are the job engines of the German economy: in recent years they have created more jobs than those DAX companies with dispersed ownership. This is one of the conclusions drawn in the fifth edition of the study series “The economic significance of family businesses”. Between 2007 and 2016, Germany’s 500 largest family businesses expanded their employment in Germany by 23 percent to 2.54 million people. In contrast, the 27 DAX companies that are not family businesses were only able to increase employment by 4 percent – to 1.55 million. Measured in revenue as well, the top 500 family businesses outpaced the 27 DAX companies, increasing their group-wide sales by 36 percent between 2007 and 2016. The 27 DAX companies increased their sales by only 29 percent.
Listed family companies conduct business in a more stable and successful manner than non-family companies – and this positive performance increases with the family’s influence on the business. This was the finding of a study conducted on behalf of the Foundation for Family Businesses: “Börsennotierte Familienunternehmen in Deutschland” (“Listed Family Businesses in Germany”) was produced by the Center for Entrepreneurial and Financial Studies at the Technical University (TU) of Munich under the direction of Prof. Dr Dr Ann-Kristin Achleitner, Prof. Dr Reiner Braun and Prof. Dr Christoph Kaserer.
Companies are expected to provide more and more transparency today. But some of the planned disclosure requirements extend well beyond the mere exchange of information with government officials. Confidential data from companies and shareholders will no longer be adequately protected if this data is posted on the Internet. The results of several studies conducted by the Foundation for Family Businesses are summarised in the video "Data Protection for Family Businesses".
Family businesses and their shareholders are subject to increasingly stronger social control through the continuously growing number of disclosure requirements. At the same time, many of these regulations infringe unjustifiably upon the data protection rights of family business owners. This is one key result of the first extensive study on the topic commissioned by the Foundation for Family Businesses.
The main reasons for Germany’s slide from twelfth to sixteenth place is a significant loss of tax competitiveness. This is one of the results of the the Country Index for Family Businesses, which evaluates Germany’s attractiveness as a location. The current rankings are led by Switzerland, followed by the United Kingdom and the United States. France, Spain and Italy are at the bottom of the rankings – all of them unchanged from the comparative calculation for the Country Index 2016.
For more than a decade now, the Foundation for Family Businesses has regularly commissioned the Centre for European Economic Research (ZEW) and the Institute for SME research and entrepreneurship in Mannheim (ifm) to conduct studies on the economic importance of German family businesses. Our short explanation video summarises the key statistics.
