The economy of every nation depends on family-run businesses, from mom-and-pop shops to multibillion-dollar global enterprises. In fact, if you look at any successful business in the world, chances are it will be a family firm.
The University of Alberta School of Business is a world leader in the study and teaching of family business. Recognizing the importance of family enterprise for community and economic development, the U of A encourages faculty research and offers degree programs, courses, outreach services and practical help for family businesses. Its Alberta Business Family Institute is the only centre to offer programs for rural Canada
Family businesses generate an estimated 70 to 90 per cent of global economic output and account for 80 to 90 per cent of all businesses in North America.
In Canada, they account for 60 per cent of the nation’s GDP, employ six million workers and create 70 per cent of new jobs. And it’s not just the economy that benefits. Fifty-five per cent of all charitable donations in Canada are made by family firms.
A growing body of research suggests that the degree to which family businesses are innovative and entrepreneurial directly affects the wealth or poverty of nations.
So what’s the link between family business and entrepreneurship?
Lloyd Steier, professor of strategic management at the University of Alberta School of Business says that for aspiring entrepreneurs, families provide resources, capital, access to networks and financial and emotional support.
And what makes family firms such successful business structures? It comes down to knowledge transfer, trust and hard work over a sustained period of time.
“Family business provides a wonderful sort of learning incubator that you can’t replicate elsewhere,” says Steier, who draws some of his insights from his own rural roots in Saskatchewan. “If you watch a father and son taking a drive to check crops or whatever, there’s a lot of teaching and learning going on there. It might be about the technology of farming or about relationships or how to do things.”
Social capital, the reputation of the family firm and the knowledge needed to run the business are assets that take a long time to build.
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