WELLESLEY, Mass., Oct. 26, 2020 /PRNewswire/ -- Seventy-five
percent of entrepreneurs and 81% of established business owners
co-own and/or co-manage their businesses with family members.
Additionally, 62% of established business owners state that the
majority of their current employees are members of their family.
These are among the findings of the first 2019/2020 Global
Entrepreneurship Monitor (GEM) Family Entrepreneurship Report,
produced and released today by Babson
College.
Families Own and Manage Majority of Businesses Worldwide, According
to New Family Entrepreneurship Data
"Family business scholars and practitioners have long argued
that discussions of entrepreneurship should include family
entrepreneurship," said Babson Associate Professor Matt Allen, co-author of the report and Faculty
Director for the Institute for Family Entrepreneurship at
Babson College. "This report shows us
that discussions of entrepreneurship are, in fact, discussions of
family entrepreneurship."
"From a policy standpoint, these findings also underscore how
critical it is that policymakers support the entrepreneurial
leadership and ambitions of families, especially as they continue
to face the negative business consequences of COVID-19, and are
such a driving force behind business and job creation worldwide,"
said Allen.
Babson's Institute for Family Entrepreneurship (IFE) is an
example of the College's continued commitment to family
entrepreneurs. Of IFE's many programs, its unique Family
Entrepreneurship Amplifier course engages students and their
families early in their Babson career in order to develop
entrepreneurial competencies to develop and sustain
entrepreneurship from one generation to another.
"Our strategic approach is to support the families of the
entrepreneurs that we work with, to bring them into the
conversation, and to help them develop knowledge and skills," said
Lauri Union, executive director of
IFE. "When we help families strengthen their relationships and how
they function, we effectively prepare them to act entrepreneurially
together."
Additional Findings
- Rates of Family Involvement in Entrepreneurship
-
- In East and South Asia,
Thailand shows the highest total
entrepreneurial activity (TEA) with all established entrepreneurs
involving family.
- In Europe and North America, family involvement ranges from
54% in Turkey to 90% in
Poland.
- In every participating Latin American and Caribbean economy, over three-fourths of
entrepreneurs involve family in their startups.
- The highest necessity motives among family entrepreneurs can be
found in two low-income countries: Egypt (50%) and India (46%). On the other hand, Poland, Sweden, Switzerland, Luxembourg, Netherlands, and the United States—all
high-income economies—report necessity motives of 10% or less among
family entrepreneurs.
- Forms of Family Involvement in Entrepreneurship
-
- The most common form of family entrepreneurship is
co-management without co-ownership. Four economies from different
regions show 85% or more TEA in this ownership form. Conversely,
China reports only 12%
co-management without co-ownership.
- It is uncommon for entrepreneurs to co-own but not co-manage
with family. Many economies (Thailand, Puerto
Rico, Bulgaria,
United Kingdom, Russian Federation, Cyprus, and France) did not show evidence of this form.
The highest level could be seen in Argentina (18%).
- Rates of Family Involvement in Established Business
Activity
-
- Neighboring countries in Central
Europe (Slovenia, Slovak
Republic, Poland, and Croatia), as well as Bulgaria, report over 90% of established
business ownership involves family.
- In Latin America, family
involvement in established business activity is proportionately
high in Argentina (92%) and
accounts for nearly all established business activity in
Panama (99%).
- Forms of Family Involvement in Established Business
Activity
-
- Close to 40% or more of established business activity in every
economy involves family as co-managers but not co-owners, with the
exception of China, where it
accounts for only 9%. Nearly all established business owners in
Panama (95%) and Madagascar (94%) have family members managing
with them, although they are either sole owners or have non-family
partners.
- Established business ownership with both co-ownership and
co-management accounts for around 30% of established business
activity in Luxembourg, the
United Arab Emirates, and
Canada. In contrast, 4% or less of
this form exists in the Republic of Korea, Indonesia, Israel, Panama, and Madagascar.
- Job Creation in Family Entrepreneurship and Established
Business Ownership
-
- Across the 48 economies, 57% of family entrepreneurs, on
average, expect that most of their employees over the next five
years will be family members.
- On average (unweighted) across the 48 economies, nearly 8% of
family entrepreneurs have already, in this early stage, employed
more than five people in their businesses. Among family established
business owners, 20% employ more than five people.
About Babson
College
Babson College is the educator,
convener, and thought leader of Entrepreneurship of All
Kinds(r). The top-ranked college for entrepreneurship
education, Babson is a dynamic living and learning laboratory where
students, faculty, and staff work together to address the
real-world problems of business and society. We prepare the
entrepreneurial leaders our world needs most: those with strong
functional knowledge and the skills and vision to navigate change,
accommodate ambiguity, surmount complexity, and motivate teams in a
common purpose to make a difference in the world, and have an
impact on organizations of all sizes and types. As we have for
nearly a half-century, Babson continues to
advance Entrepreneurial Thought & Action® as
the most positive force on the planet for generating sustainable
economic and social value.
About GEM
Global Entrepreneurship Monitor (GEM) is a
consortium of national country teams, primarily associated with top
academic institutions, that carries out survey-based research on
entrepreneurship around the world. GEM is the only global research
source that collects data on entrepreneurship directly from
individual entrepreneurs! GEM's Adult Population Survey (APS)
provides analysis on the characteristics, motivations and ambitions
of individuals starting businesses, as well as social attitudes
towards entrepreneurship. The National Expert Survey (NES) looks at
the national context in which individuals start businesses.
In numbers, GEM is:
- 20+ years of data
- 150,000+ interviews a year
- 100+ economies
- 500+ specialists in entrepreneurship research
- 300+ academic and research institutions
- 200+ funding institutions
GEM began in 1999 as a joint project between Babson College (USA) and London Business
School (UK). The consortium has become the richest resource
of information on entrepreneurship, publishing a range of global,
national and 'special topic' reports on an annual basis.
*This report includes data from 48 participating economies,
comprising a total sample of more than 150,000 adults.
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SOURCE Babson College