Family businesses outpace listed sector in job creation

The big role family businesses play in generating employment growth in Germany is underlined with a new piece of research, which also shows how many more jobs the sector created compared with listed corporations.

According to research carried by the Centre for European Economic Research (ZEW) and the Institut für Mittelstandsforschung, the country’s 500 biggest family businesses added three million jobs to the Germany economy between 2006 and 2012. This represented an increase of at least 11%.

The report, published exclusively in the Frankfurter Allgemeine, said that during the same period Germany’s top 27 listed businesses, as represented by the DAX 30 excluding the three family businesses in the index, reduced their employment numbers by 7% to 1.4 million from 1.5 million. The three family businesses excluded were Beiersdorf, Henkel and Merck.

The research also found that the employment created by family businesses in Germany stays at home. Seventy-one percent of the jobs created were in Germany, compared with only 38% for the non-family listed businesses.

Other findings showed that Germany’s top family businesses generated more sales and had less debt than their non-family listed counterparts.

The research backs up what has long been regarded to be the case – that family businesses generate more economic growth and employment then the non-family listed sector. The report quoted professor Brun-Hagen Hennerkes, chairman of the Foundation of of Family Businesses and one of Germany’s best-known family business experts, saying that the fact family businesses play such an important role in generating growth means that they need to be taken more seriously by policymakers.