Family business owners are more innovative than owners of non-family businesses

Family business owners are more innovative than owners of non-family businesses but are restricted by limited financial resources, says Dr Roberto Flören, Professor of Family Business at Nyenrode Business Universiteit.

Despite this, 79% of family business owners will forgo dividends in order to boost innovation, compared to 60% of non-family businesses.

The research, carried out in collaboration with global bank ING and NPM Capital, which provides private equity to family businesses, examined 399 private firms, of which 69% were family-run.

Dr Flören believes his study offers some important lessons for heads of industry to consider. He continues: “The report clearly shows that family business owners are not resting on their laurels, however there are still key threats to innovation which often include dependence on the innovative strength of the founder and a high percentage of the family wealth being tied up in the business, making it unavailable for use on new projects.”