Family businesses are a major economic driver. The world’s 500 largest family enterprises recorded aggregate revenues of US$8.8 trillion in 2024, and family-owned businesses account for over 70 percent of global GDP and approximately 60 percent of employment worldwide.

Many of these enterprises were built on the endeavours of their founders. In this episode of INSEAD Explains Entrepreneurship, Henrich Greve, the Rudolf and Valeria Maag Chaired Professor in Entrepreneurship, notes that many of today’s family businesses continue to embody an entrepreneurial spirit, often spurred by the efforts of the younger generation.

Despite what some may think, family businesses don’t simply rest on their laurels and stay the same. “Family succession events, where the new generation comes in, frequently result in the renewal of the family business,” Greve said. Indeed, according to a recent survey, 60 percent of INSEAD alumni associated with family businesses executed turnarounds, mostly around market or product expansion.

For family businesses to thrive in their entrepreneurial pursuits, it’s essential for younger family members to be equipped with the knowledge and tools to be effective entrepreneurs. One way to do so is to ensure that they gain experience working up the ranks of an organisation outside the family business – somewhere where they are just regular employees.

“When the time is right, they can come back and use the knowledge they have gained to execute a renewal,” Greve said. “Ultimately, every business and every business decision is all about people. It’s about their thinking and their tools, and how they can make that come together in an entrepreneurial action to renew the business.”