A new report has revealed British family farm businesses help generate £15 billion gross value added (GVA) for the UK economy.
The new UK Family Business Sector Report reveals that family businesses’ GVA contribution to UK GDP has increased by £100 billion since 2010 – to £519 billion – meaning family firms now generate a quarter of UK GDP.
The report, produced by Oxford Economics for the Institute for Family Business (IFB) Research Foundation, shows that there are 4.8 million family-run businesses in the UK, comprising 88 per cent of all private sector firms.
In the agriculture and extraction sector, there are 151,000 family firms. They employ 364,000 people, providing 76.5% of private sector employment.
The proportion of family-run SMEs that are in at least their second generation varies substantially by industry, according to the report.
Multi-generational family businesses were most common in the agriculture industry in 2016, with 77.4 per cent of firms being in at least the second generation of ownership and 6.8 per cent in the fifth or more.
The report states the biggest challenges facing family businesses, which vary by industry.
In seven out of the 12 industrial sectors, the largest proportion of family-run firms indicated that competition was a major obstacle to success.
Agriculture family-run SMEs most commonly identified regulations as their major obstacle.
Elizabeth Bagger, Institute for Family Business (IFB) Executive Director, said family businesses are the “backbone of the UK economy” – but their presence and contribution to the economy are “often underestimated”.
“The family business agriculture and extraction sector creates a substantial proportion of the UK’s GDP, and we are proud to champion and delighted to celebrate this incredible contribution,” Ms Bagger said.
“To ensure family businesses continue to flourish, we’re calling on the Government to support them with policies which allow family firms to plan and invest for the future.”