Fontainebleau, France – Family-owned businesses, a powerhouse of the global economy, are steering through the complexities of a changing world by nurturing an entrepreneurial spirit, according to a recent discussion on INSEAD Explains Entrepreneurship. The conversation, featuring Henrich Greve, the Rudolf and Valeria Maag Chaired Professor in Entrepreneurship at INSEAD, underscored the significant role these businesses play, accounting for more than 70% of global GDP and about 60% of worldwide employment.
Family enterprises have long been pillars of economic development, with the 500 largest reporting collective revenues of $8.8 trillion in 2024. A key factor in their continued success, as Greve highlighted, is the dynamic involvement of younger generations, who are instrumental in revitalizing these family ventures.
Greve noted that family businesses are not static entities; they evolve with each new generation. “Family succession events, where the new generation comes in, frequently result in the renewal of the family business,” he said. This renewal often involves strategic shifts such as market or product expansions. A recent survey revealed that 60% of INSEAD alumni involved with family businesses have implemented such turnarounds.
For the new generation to effectively contribute to this entrepreneurial drive, it is crucial that they acquire substantial experience outside their family firms. Greve emphasized the importance of younger family members working their way up in external organizations. “When the time is right, they can come back and use the knowledge they have gained to execute a renewal,” he explained. This approach not only equips them with necessary skills but also enables them to bring fresh perspectives to their family businesses.
Ultimately, the success of family enterprises hinges on the people behind them. “Every business and every business decision is all about people. It’s about their thinking and their tools, and how they can make that come together in an entrepreneurial action to renew the business,” Greve concluded.
This focus on entrepreneurial renewal ensures that family businesses remain a vibrant and competitive force in the global economy, continuing to drive innovation and economic growth.
For more insights into family business dynamics and entrepreneurship, readers can explore additional resources through INSEAD’s Knowledge portal.
