This article was adapted from an interview with Arjun Khullar, Head of Integrated Strategies at GIC by the National Bank of Canada for their Family Advantage Spring 2022 Report on the landscape for family-owned businesses in Asia and globally, including their key strengths and most common challenges.
The landscape for family businesses in Asia and globally
The diversity of family business structures differs among geographies. In the UK, most of the listed companies are not family-owned. In Europe, family-owned businesses have become corporatised over time. Family businesses form a minority and where they are family-owned, the family, at times, has a limited presence in the business. In America, there is a combination of both, as there are still a lot of companies who are listed and have founding entrepreneurs who own anywhere between 20-40% of the company.
In Asia, there are far more family-owned businesses. Generally, the region is still living through its first generation of entrepreneurs. These business founders have come of age, having built up their conglomerates from scratch. And while these businesses might be entering a phase of corporatisation, the founding entrepreneurs are often still around. China has seen a lot of entrepreneur-led activity in the last 30 years. And entrepreneurship is an attractive prospect for people in China, partly because they have seen the level of wealth it has created.
Overall, you have to look at individual markets because they are all very different and at distinct phases of their evolution.