Dusseldorf The 500 top-selling family businesses in the world are growing again. After a 2.5 percent decline in sales in the 2019 and 2021 surveys, the Global Family Business Index recorded an average increase of 14 percent in 2023. This emerges from the survey by the University of St. Gallen and the auditing and consulting company EY, which is available to the Handelsblatt in advance.
Asian family businesses grew the most at 21 percent, while growth in North America was 12 percent. The German representatives in the ranking, on the other hand, were only able to increase by six percent.
The report also highlights the importance of family-owned companies as an economic factor. The world’s 500 top corporations together have sales of 8.02 trillion dollars and employ around 24.5 million people. In the 2021 ranking, it was still $7.3 trillion in sales and 24 million employees.
Ev Bangemann, Managing Partner Markets at EY Germany, cites the sector mix as one of the reasons why the German representatives in the list lack growth dynamics in comparison: “While German family companies, for example, are mainly active in the industrial sector, where high growth rates are rather rare , many American and Asian companies belong to the technology and consumer goods sectors.”
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And they developed faster and stronger overall. With regard to Asia, Bangemann says that the economies in many emerging countries also often show higher growth – albeit from a lower base than is the case with mature economies such as Germany.
Industry accounts for 41 percent of family businesses in Germany
The different division weightings in Germany compared to the rest of the world are clearly reflected in the index. Internationally, the share of family businesses in industrial production is 29 percent. In Germany it is 41 percent.
This variance ratio was similar in the 2021 Global Family Business Index at 27 to 40.5 percent. At that time, German family businesses bucked the trend and posted growth of 0.8 percent, while sales in the top 500 fell by an average of 2.5 percent.
For Thomas Zellweger, co-founder of the index and professor at the chair for family businesses at the University of St. Gallen, it is not yet clear that this shows a special resilience of German family businesses. Family businesses are generally quite resilient. The sales of family businesses in Europe as a whole and in America have changed, but not massively. It is unclear “whether the established family businesses are backing the right horse”.
Because even in a shrinking market, sales could remain stable or even increase. But then there is no perspective: “Resilience becomes dangerous when growth is achieved in a market that is not future-oriented.”
At least among the top-selling family businesses in this country, it can be said that the feared de-industrialization has not yet taken place. Zellweger sees two trends: Firstly, the knowledge-intensive sectors in Europe are becoming more important, for example industry-related services or prototype developments. Pure production facilities, on the other hand, would be relocated to countries where wage levels are lower.
But there is also the opposite trend of “nearshoring”, i.e. bringing supply and production chains back to Europe because of the CO2 footprint and high transport costs and uncertainties. “I don’t want to make any predictions just yet, but there will probably not be a real reindustrialization,” says Zellweger. “When it comes, it will be in a different guise, more on knowledge-based topics.”
A total of 78 of the top 500 companies are German, making them the second largest group after the USA (118). The USA leads the top ten with seven companies. At the top is the retail group Walmart, followed by Warren Buffett’s holding company Berkshire Hathaway.
The Schwarz Group and BMW are in fourth place
Germany is in fourth place with the Schwarz Group, which owns the retail groups Lidl and Kaufland, and in sixth place with BMW, in which the Quandt family holds almost 50 percent.
Together with the automotive supplier Bosch (13th place), these companies also represent the three top-selling family businesses in Europe. The top 50 also includes the automotive supplier Schaeffler (21), the pharmaceutical wholesaler Phoenix (41), the car manufacturer Porsche (44) and the precious metal specialist Heraeus (48).
Not a single one of the world’s top 50 family businesses is managed by a woman. Among the top 500 it is just six percent. The proportion of female CEOs in Europe and North America is seven percent each, and four in Asia.
In the total of 78 German companies in the ranking, the proportion of female executives is five percent. The most prominent names: Anna Maria Braun from the medical products company B. Braun and Nicola Leibinger-Kammüller from the laser specialist Trumpf.
Ev Bangemann therefore sees a need for action when it comes to diversity: “This is no longer up to date, especially given the ongoing lack of talent and the increasingly complex business challenges that can only be successfully mastered by thinking from different perspectives.”
The lack of diversity at the top of the company could also become a problem when looking for new employees, says the EY partner: “For companies, when recruiting specialists, it is becoming increasingly important that there are female role models in the management floor. Many family businesses are in danger of missing the boat here.”
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