62 percent of Europe’s family businesses are confident or very confident about the future.
The war for talent, declining profits and regulatory change are seen as key challenges
Europe's family businesses remain positive about the future at a time of rising economic and geopolitical uncertainties. Innovation, training and education, and diversification are key priorities as they adapt to a fast-changing world --while planning for succession is increasingly on families' minds.
These are among the key findings from the eighth European Family Business Barometer, a survey of Europe-based family businesses produced by KPMG Enterprise and European Family Business (EFB). Researchers surveyed 1,613 family business executives in 27 countries across Europe for this year's report.
“Europe's family businesses are confronted by trade wars, geopolitical uncertainty, recession fears, rising populism, Brexit and the climate crisis. Years ago, any one of these issues could have triggered an economic slowdown and driven rampant business pessimism,” says Jonathan Lavender, Global Chairman, KPMG Enterprise & Global Co-leader, KPMG Enterprise Family Business. “Yet despite these many challenges, these family businesses remain positive about the future. Europe's entire business community can take heart from confidence that whatever comes, we'll get through it.”
Succession is poised to become a critical topic for family businesses across Europe over the next 5 to 10 years. It's estimated that US$15.4 trillion will be transferred globally by 2030; US$3.2 trillion of which will be transferred in Europe.
In this year's survey, 35 percent of respondents say they intend to pass ownership of the business to the next generation, while 33 percent plan to pass on management responsibilities as well. Only 27 percent say they intend to transfer oversight responsibilities, perhaps suggesting the senior generation would like to keep a close watch on the business for a while longer.
While 84 percent of respondents say they currently have a family member as president or CEO, only 62 percent believe a family member will occupy that role in the years to come.
“Older family businesses still have family members in charge, but this may become less common in the future. Families will increasingly feel that they need outside expertise to help the business navigate a complex and constantly changing environment. As businesses grow more global and more digital, external executive leadership can bring the experience, skills and independent perspective needed to innovate, take strategic risks, and prosper,” says Tom McGinness, Global Co-leader, KPMG Enterprise Family Business.
As a new European Commission and EU Parliament settle in, Europe's family businesses are eager to see politicians make trade a priority. One in three respondents (35 percent) feel the EU's key priority should be completing the single European market, while 20 percent believe the EU's main priority should be taking the lead on championing free trade.
Other priorities mentioned by the business families are ensuring the education system is preparing Europe's students for the jobs of the future, climate change and regulating the digital economy.
“It's encouraging to see some alignment between the interests of family businesses and those of European politicians, in that there's a shared ambition to embrace necessary reforms, further trade, and complete the single market. Business will want its voice heard as reforms take shape,” remarks Olaf Leurs, Tax Partner, Meijburg & Co, KPMG the Netherlands.
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The European Family Business Barometer is based on the responses of an online survey from 1,613 questionnaires which were received from family businesses across 27 European countries from 13 May─19 July 2019.
European Family Businesses (EFB) is the federation of national associations representing long-term family owned enterprises, including small, medium-sized and larger companies. EFB represents 1 trillion euros in aggregated turnover, which is 9 percent of European GDP. EFB's mission is to press for policies that recognise the fundamental contribution of family businesses in Europe's economy and create a level playing field when compared to other types of companies.
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