Gary Deans: Family firms are set to play a lead role in economic recovery

Research from the Institute for Family Business suggests the UK’s three million family businesses account for two-thirds of our small and medium-sized enterprises, provide 9.2 million jobs and in 2010 made a £346 billion value-added contribution to UK GDP.

More than a third of family businesses surveyed expressed a desire to look for growth via transactions. This focus was evident in our role in finding a buyer for the high street chain Peacocks, where our corporate finance team reported notable interest from family businesses looking to be involved in the negotiations.

Peacocks was eventually bought by Edinburgh Woollen Mill, a company owned 100 per cent by the Day family, which increased its workforce by nearly 6,000 and added more than 330 stores to its 500 UK store portfolio. It was a major transaction for a company that opened its first shop just 40 years ago.

About a third of respondents expressed an interest in the benefits of exploring a move to the emerging economies. For many family businesses, maintaining the value of the company for future generations is paramount, and given the sluggish economic environment in Europe, it makes sense that they are looking for opportunities in the double-digit growth economies in the East and Africa.

Our research also suggested that we are starting to see the broadening of family businesses’ horizons as they access the wider executive talent pool, with more than three-quarters of respondents looking to have non-family executives and non-executive directors in their businesses.

For the UK economy to begin to grow, the story has to be one of private sector-led growth, and family businesses will be key to this. Looking at the evidence so far, though, they are more than up for the challenge.

• Gary Deans is KPMG tax partner and head of the firm’s family business team