New research by Oxford Economics for the Institute for Family Business (IFB) Research Foundation has revealed the vast contribution family firms make to the UK economy – employing over 11.9 million people and making up 87% of all private sector firms in the UK.
There are now more than 200,000 family-run firms in the education sector, making up almost one in 20 of all businesses in the industry. Family businesses also account for 93% of all private sector firms in the educations sector – one of the highest concentrations out of all sectors in the UK.
Since 2013, family businesses have increased employment by six per cent and turnover has also seen a strong rise, increasing by two per cent to reach £1.3 trillion. In addition, family firms paid £125 billion in taxes and contributed over a quarter (26%) of the UK’s entire GDP.
Peter Armitage, Chairman of the IFB, said: “The report sheds light on the sheer size and scale of the family business community. It’s an important reminder of how vital family-run firms are to the UK – serving as the backbone of our economy, with family firms making a phenomenal contribution across all sectors, industries and regions.
“Family businesses have always been at the very heart of the UK economy and based on the steady rise in their recruitment and turnover, it is clear they are here to stay. It’s encouraging to see family firms with such a buoyant attitude towards their future expansion – almost half of family SMEs expect to grow over the next two to three years.”
Growth and expansion is a top priority for many SME family firms with just under half (49%) stating they aim to grow over the next twelve months.
Just under a half of firms (43%) say they will invest in improving the skills of their workforce to support growth, with a third (33%) planning to boost productivity through investing in new equipment and premises.