Culture, Industry Drive Family Business, Study Says
In some countries, businesses are run by people thrown together by happenstance. But in other places, business is a family affair.
Of businesses that generate a billion dollars or more in wealth, 42% are family run and the remaining 58% are run by non-related individuals, according to a Forbes report entitled, "Insights: Global Wealth and Family Ties." Forbes studied 1,253 of the world's largest fortunes in 12 countries from the perspective of whether they were operated by families or individuals. Almost all were worth at least a billion dollars.
A large part of whether a family is involved in managing a business fortune depends on the culture of the country, the report concluded.
Family-managed fortunes are most numerous in Hong Kong, India, France and the Middle East, according to the report. The lowest percentages are in Russia, the United Kingdom and China. In general, the older the economy, the more business wealth has been passed down from generation to generation. In emerging markets such as Russia and China, where communism was the controlling economic factor until a couple of decades ago, more individuals control the wealthy companies because they only recently started them.
"India is among the countries with the highest percentages of family-run fortunes (73%) and a prime example of how social expectations shape the interaction of family and wealth," the report's authors said. Although it is a relatively new economy, India maintains "strong family ties in all facets of life," and this is a social expectation in the country. A similar culture prevails in the Middle East.
In Europe, the situation is more balanced, and half of the fortunes involve families. This "results from a long economic history that created many family fortunes, some dating back centuries." Meanwhile, open, free-market-oriented economies which fostered an entrepreneurial spirit, said the study.
Forbes labels China and Russia the lone wolves because of the large number of individual fortunes. In China, 66.5% of fortunes are managed by people with no kinship and in Russia it is 81%. Both countries also have a large number of women billionaires because communism encouraged equality of the sexes.
The United States remains a source of innovation and entrepreneurship, and more than half (58%) of the fortunes are not family managed. The epitome of the family-run business in the U.S. is the Waltons, owners of Walmart, with a combined wealth of $93 billion that includes six family members with more than $1 billion each.
Latin America is a mix of old family money and new fortunes created by recent economic growth, according to the report.
New Firm To Loan Out Art
A new online venture called Artify It is offering artists the opportunity to loan out their works to art lovers.
For a subscription fee, borrowers can select from a range of contemporary artwork that can be changed regularly and displayed in their homes or offices. Subscribers are also free to buy the artwork or help artists sell it, according to Artify It.
Subscribers will pay $50 to $150 monthly per art piece when they have them displayed in their homes or offices, a portion of which will go toward the artist's commission. Artists also receive a commission if the artwork is sold.
The Artify It online catalog is designed to act as a social network for artists to connect with each other and with aficionados looking for pieces to display, according to company officials.