Family firms, boards and company survival

A concern of family firms is to ensure survival across generations as a family firm. But survival also relates to whether the firm goes bankrupt or not. We know that succession presents major challenges for family firms and that many do not make it beyond the first and second generations. We also know that family firms are more risk averse than non-family firms, a reflection of the desire to see the business handed on to the next generation. However, until we carried out our study there was little systematic evidence on whether family firms are more likely to survive than non-family firms and the factors that drive such differences.

As the boards of family firms play a central role in deciding upon strategy and differ from boards in non-family firms, our focus was on examine the role of board composition. More than any other group, the board has ultimate control of the direction of the firm to ensure its survival as a viable business. Our research uses the population of private firms in the UK and is the largest study to date on this topic. Read more

Calling All Women-led Australian Startups for *New* Accelerator Program!

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We’re looking for great growth- and seed-stage technology companies with the following criteria:

*   a profitable market opportunity with competitive advantage
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*   be based in or have significant operations in Australia

The application takes less than an hour and is due by December 15. Apply now! Early applications will get priority review. If you know someone who would benefit from this program, please forward this along. Learn more at www.springboardenterprises.

ACE GEM Research published as an opinion piece with CNN

 ACE’s recent Global Entrepreneurship Monitor report received media coverage with CNN last week.  Here is the opinion piece by Associate Professor Paul Steffens, deputy director of ACE:

CNN GEM

 

Essentially the report outlines Australia’s impressive recent entrepreneurial performance.  The full  report can be found here: 

GEM Report

What is GEM

In 2011, the Global Entrepreneurship Monitor (GEM) study was conducted across 54 countries. Over 140,000 adults aged between 18 and 64, including 2,000 in Australia were interviewed. GEM differs from other studies in that by surveying the adult population, it identifies entrepreneurs at the very earliest stages of new business creation.

Highlights 

  • Australia’s entrepreneurship rate is second only to the USA amongst developed countries
  • We estimate that 10.5% of the Australian adult population were actively engaged in starting and running new businesses in 2011. This equates to 1.48 million early-stage entrepreneurs
  • Of the estimated 1.48 million early-stage entrepreneurs:

      *   40% or 590,000 were women

      *   33% or 580,000 expected to creates at least 5 new jobs in the next 5 years

      *   11% or 170,000 expected to create 20 or more new jobs in the next 5 years

  • Australia also ranks above average for employee entrepreneurial activity in established firms. An estimated 5.0% of the adult population is engaged in developing or launching new products, a new business unit or subsidiary for their employer.
  • Australia was one of only three developed countries, together with the US and Netherlands, that ranked above average for both entrepreneurship rate and employee entrepreneurial activity
  • Australia outperforms most other developed economies on indicators of the quality and economic impact of its business start-ups, including growth aspirations, number of opportunity-driven start-ups and innovativeness
  • The vast majority of start-ups in Australia are founded based on a desire to take advantage of perceived opportunities with only 1 in 5 new ventures started through necessity –
  • While the global economic slowdown (GFC) clearly increased the level of necessity driven entrepreneurship in Australia, this increase is not as strong as that experienced in the USA.
  • Approximately 50% of the Australians believe that good opportunities exist for the establishment of new ventures, and that they possess the skills to start a business. This is well above international averages.
  • International orientation is below average for Australian early state entrepreneurs, most likely due to the geographic distance to international markets
  • Australian entrepreneurship is comparatively inclusive. For example, at 8.4% the female total entrepreneurial activity is second only to the USA.

 

International Research Shows Australian Women Lead the Way in Businesses

New research paints a rosy picture of the state of entrepreneurship in Australia, and points to Australian women as being the most entrepreneurial in the world.

The research, compiled by the Australian Centre for Entrepreneurship (ACE) in partnership with the Global Entrepreneurship Monitor (GEM), indicates that last year 10 per cent of the Australian adult population was involved in setting up or owning newly-founded businesses.

ACE Associate Professor Paul Steffens said Australia was second only to the United States in this regard.

“Out of the 23 developed countries surveyed, the US came up trumps with just over 12 per cent with Australia a close second at 10.5 per cent. Even more encouraging is that fewer of these new Australian businesses were born out of necessity – 15 per cent – compared with more than 21 per cent for the US,” he said.

“This is very encouraging and indicates that Australia has been weathering the global financial crisis well.

“Most new businesses started to take advantage of a perceived lucrative business opportunity with only about a fifth started out of a lack of alternative options for work.

“This is significant because it points to a culture of genuine innovation and entrepreneurship.”

Professor Steffens said 19 per cent of those 2000 businesses surveyed intended to grow their businesses and employ more staff over the next five years.

“This sort of optimism places Australia higher than average when compared with other developed economies,” he said.

He said the research results were particularly interesting in relation to women in business.

“With 7.8 per cent of adult women involved in setting up a new business or owning newly founded businesses, Australia ranks number one among developed economies.

“What’s interesting too is that Australia is the only developed economy where men and women are participating virtually equally in this endeavour.

“Australian women put their stronger than average success in new business ventures down to their skills levels and the high media attention for entrepreneurship in Australia which provides them with successful role models.”

Professor Steffens said while having 500,000 women entrepreneurs painted a healthy picture of access to business opportunities for Australian women, businesswomen were still under-represented in the workforce in growth-oriented industries such as mining, manufacturing, finance and IT and this probably accounted for their propensity to start new businesses in service industries.

“Having more women training and employed in these traditionally male-dominated industries would have a significant positive impact on the creation of additional business opportunities for women,” he said.

“The research also shows that while more male entrepreneurs were intending to export their products or services over the next five years, both male and female Australian entrepreneurs were lagging behind the international surveyed average on this account.”

For more information access the GEM 2011 Global Report and the GEM 2010 Women’s Report.