All In The Family

Even today, family businesses offer better returns to every stakeholder in society.

- Rajmohan Krishnan

As I type this sentence, there are 7.733 billion people living on our planet. All these people, put together, have created a lot of wealth— anywhere between $1.4 quadrillion and $2 quadrillion. Never before have we had so many humans and so much wealth. But how is this money distributed? This is, after all, the 21st century and democracy is the norm. Just like the Internet democratised knowledge, has capitalism democratised wealth? No. The gap between the haves and the have-nots is greater than ever before. Every available macroeconomic statistic pertaining to malnutrition, educational opportunities, employment, per capita income, etc. seems to endorse this fact. But what about lesser-known macroeconomic statistics that pertain to family businesses? Here are a few for your perusal:

• In the U.S., one of the world’s major democracies, 80% of all companies are family-owned.
• That number goes up to 90% in India, the world’s largest democracy.
• One study estimates that family-owned businesses contribute anywhere between 60% and 75% to the world’s GDP and that they also employ more than half the world’s workforce.

At first glance, one might be tempted to perceive these statistics as similar to other macroeconomic indicators—a sign that the system is broken. But I would like to argue that a great majority of family businesses tend to become enduring institutions that benefit all stakeholders and the world at large.