At CMG, we recognize (and appreciate) the importance of family businesses in Canada (as featured in our 2015 independent research) and around the globe. These businesses continue to play a huge role in our economy – especially now, during the pandemic. It’s why a recent article published by Ernst & Young (EY) caught our eye. It takes an in-depth analysis of the 2021 EY and University of St. Gallen Family Business Index, revealing how family businesses are maintaining the health of the global economy through economic dominance and resilience.
A few highlights stood out to us:
- Economic health and pandemic aid. The world’s largest 500 family businesses generate more than USD $7 trillion in revenue, along with employing over 24 million people. This constitutes the third largest economic contribution in the world (after the US and China, by revenue), despite an overall global economy shrinkage of 3.5% in 2020. Business families continue to play a vital role in economic health and growth and health by creating jobs and opportunities in their communities. These businesses are also helping in the pandemic by providing critical medical equipment, creating 3-D printed face shields and hand sanitizers, as well as offering financial support to other businesses in need of help.
- Fourteen Canadian business families on the index. The list includes George Weston, Power Corp. (Desmarais family), Empire Company (Sobey family), Fairfax Financial Holdings (Watsa family), Bombardier, Saputo, Inc., McCain Foods, Rogers Communications and Shaw Communications. Combined, the top five Canadian families contribute USD $224 billion in revenues to the global economy.
- Longevity matters. The majority of family businesses in the Index are between 50 and 100 years old. They’ve been around for a while and are multi-generational. They’re built to last.
- An emerging presence in technology, media and entertainment, and telecommunication. These sectors now comprise about 9% of family-owned businesses globally. None of these sectors even existed 70 years ago.
- NextGen is on its way. One in five family businesses on the Index reported having a NextGen (aged 40 or younger) on the board or in the management team. These future leaders have the opportunity to bring forth innovation with their valuable digital skills and reframe their business plans beyond the global pandemic.
You can read the full EY article here.
For a detailed breakdown, see the complete 2021 Family Business Index here.
Christina Outridge is a Marketing and Research Analyst at Creaghan McConnell Group