James Dyson, the founder of the eponymous technology company and one of the most famous entrepreneurs in the UK, is turning his multi-billion dollar company into a family business. Dyson recently acquired the lighting firm that James' son Jake set up. Both Jake and his brother Sam have been non-executive board members since 2013.
That is not to say that James is standing aside - the 67-year-old is still very much involved and there are certainly no plans for him to step down, but Jake is taking an increasingly central role in the business.
In a recent interview with the Financial Times about the Wiltshire company and the increasing role of his son in it, Dyson said: “The beauty of a family business is that you worry about getting the product right, not about any investors with short-term views of what others think. I would hate to be (a public company). We can be very long term... We can be patient.”
Dyson’s embrace of the family business model is a huge endorsement for family businesses in a country in which, compared with many of its neighbours in Europe, has for some time been much more driven by the short-termism of public companies and the dominance of financial markets, which often promote this short-termism. This looks to be changing as the concept of long termism gains ground.
The number of family businesses in the UK is certainly increasing. The Institute for Family Businesses, the UK chapter of the global Family Business Network, says there are now around three million family firms in the UK, and their numbers have increased by 30,000 since 2010. The numbers they employ is estimated at 9.4 million, a rise of around 500,000 since 2010. And their contribution to the gross value added of the UK economy is estimated at £360 billion.
“As the number of family businesses increases, their enormous contribution to the economic well-being of the country is becoming better recognised and understood,” says the IFB. “Politicians regularly talk about the success of Germany’s Mittelstand - it’s time for policy makers to start recognising that we have own Mittelstand in the UK, and those family firms are making an enormous contribution to our economy and communities.”
Like Dyson, the Virgin Group, headed by arguably the UK’s best known entrepreneur Richard Branson, is also embracing the family business model. Branson’s daughter Holly is increasingly taking a bigger role within the business. And Branson famously de-listed the business in the late 1980s because, as he said at the time, he became frustrated with the demands of public shareholders.
The financial crisis of 2008 and its repercussions have lead to many questioning the wisdom of the short-termism of capital markets. “Long-termism among policy makers is very much in fashion these days and that is reflected increasingly in the corporate sector,” says a senior partner at a UK accountancy firm. “Of course, the UK has a lot further to go in terms of achieving the family business dynamism of the German economy, but the concept is no longer viewed as something old and inefficient. That has to be welcomed.”