Family businesses in the Irish services sector: profile and productivity

Abstract

Most family businesses are small, engage less than 10 persons and trade in the more traditional industries, such as the distributive trades or hospitality industries. Family businesses export less product, generate a lower proportion of their turnover from Internet sales and typically have a lower Gross Value Added (GVA) per employee than non-family businesses. Nevertheless, these family businesses make a significant contribution to the services sector, accounting for more than 46% of all non-financial traded services enterprises. They are almost exclusively Irish owned, employ over a quarter of a million persons and account for 40% of all persons engaged. In 2005, family businesses in the services sectors generated an aggregate turnover in excess of ?49 billion. Yet according to international studies these family businesses have in or around a 60% probability of failure as they transfer from first to second generation ownership, potentially putting thousands of jobs at risk.