A survey by the Ifo Institute shows that almost half of family businesses are about to be handed over to the next generation. The upcoming change is a challenge for many companies.
A generational change is imminent in many family businesses in Germany. According to a survey by the Munich-based Ifo Institute and the Family Business Foundation, 43 percent of the companies surveyed said that a company or share transfer was pending in the next three years. “Especially the larger companies with more than 250 employees are planning generational change in the next three years, 50 percent of them,” explained Annette von Maltzan from the Ifo Institute.
Retirement of the baby boomers is causing problems
Fewer and fewer companies are able to achieve succession within the family. Most recently, this was only 34 percent, according to the economic researchers. 42 percent of all companies surveyed do not yet have a successor for management from the family. One consequence is that the owners are getting older and older.
According to the Ifo Institute, the retirement of the baby boomers not only affects the supply of skilled workers, but also of company successors. In another survey, 61 percent of family businesses said that inheritance or gift tax was a heavy or very heavy burden.
“Framework conditions must radically improve”
“The next generation of entrepreneurs has great confidence in the performance and innovative ability of their family businesses,” explained Rainer Kirchdörfer, board member of the Family Business Foundation. “But the framework conditions for family businesses must radically improve. Bureaucracy, energy prices, a shortage of skilled workers and tax burdens discourage the next generation.”
The ifo Institute has been collecting central data in surveys on economic policy topics for the Family Business Foundation since 2017. According to ifo, the database includes more than 12,000 companies, half of them family businesses.
family business particularly durable
The figures from the database still support the longevity of family businesses, explained the ifo. Almost half are in the second and third generations. Around a fifth make it beyond that. The oldest companies in the database have existed since the 14th century. Five percent were founded before 1900, another ten percent in the first half of the 20th century.