How Family Businesses Create Value – Entrepreneur

How Family Businesses Create Value – Entrepreneur

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.

Often overlooked as big corporations grab all the headlines, family-owned businesses (FOBs) are nonetheless the bedrock of economic health.Family-owned businesses are the ones where one or two members are majority owners, and, needless to say, it's the oldest form of organization. In such businesses, the founders or subsequent generations of the family typically hold significant positions of authority within the company. The businesses can vary in size and scope, of course, ranging from small to large corporations. But what sets them apart is they prioritize long-term sustainability over short-term gains.According to a report by McKinsey, family-owned businesses account for more than 70% of global gross domestic product (GDP), and they generate turnover of between US$60-70 trillion annually. They are also responsible for about 60% of global employment, and they play a critical role in supporting education, healthcare, and infrastructure development across their communities around the world.

To take the UAE as just one example, financial wealth generated by ultra-high-net-worth individuals and family offices is projected to increase to 46% of the economy by 2026. The enormity of this is apparent when you see