Family business makes a significant contribution to the North East with almost one in 20 of all UK family firms based in the region.
There are now more than 120,000 family running firms in the North East, making up one in 20 of all family businesses across the UK.
Family businesses also account for 82 per cent of all private sector firms in the region, including businesses such as Thomas Swan, Ringtons, Benfield Motor Group, J Barbour & Sons.
The new research by Oxford Economics for the Institute for Family Business (IFB) Research Foundation reveals the vast contribution family firms make to the UK economy – employing over 11.9 million people and making up 87 per cent of all private sector firms in the UK.
IFB member and managing director of North East family business, Thomas Swan & Co. Ltd., Harry Swan said: “Since taking over as managing director in 2006 I have increasingly come to realise the value of the family business model.
“For our employees it engenders a sense of belonging and a duty of care.
“For our customers it projects reliability, trustworthiness and longevity.
“While the typical values and principles of a family business are not the panacea to a successful company, they are highly complementary and provide a valuable competitive advantage between us and our non-family competition.”
Since 2013, family businesses have increased employment by six per cent and turnover has also seen a strong rise, increasing by two per cent to reach £1.3 trillion.
In addition, family firms paid £125 billion in taxes and contributed over a quarter (26 per cent) of the UK’s entire gross domestic product (GDP).
Peter Armitage, chairman of the IFB, said: “The report sheds light on the sheer size and scale of the family business community.
“It’s an important reminder of how vital family-run firms are to the UK – serving as the backbone of our economy, with family firms making a phenomenal contribution across all sectors, industries and regions.
“Family businesses have always been at the very heart of the UK economy and based on the steady rise in their recruitment and turnover, it is clear they are here to stay.”
Many of the UK’s family businesses plan to grow their organisations over the next few years and will invest in the skills of their staff to do so.
Just under half (49 per cent) of family business are aiming to grow over the next twelve months.
While, 43 per cent say they will invest in improving the skills of their workforce to support growth.
A third (33 per cent) are planning to boost productivity through investing in new machinery and premises.
Looking beyond their traditional activities to diversify their business and customer base, 42 per cent of family firms are planning to move into new markets and 37 per cent are developing and launching new products and services.
Peter Ermitage, chairman of the IFB, added: “It’s encouraging to see family firms with such a buoyant attitude towards their future expansion – almost half of family SMEs expect to grow over the next two to three years.”