The UK’s family businesses are part of the UK’s solution to its ‘productivity puzzle’, according to the Bank of England’s chief economist, Andy Haldane.

Commenting on a major survey of the country’s family business sector conducted by Families in Business (FiB), the independent support organisation for family firms, Andy Haldane said: “Boosting the productivity of businesses holds the key to future growth and prosperity, not just for businesses themselves, but for the economy as a whole.”

He makes his comments in his foreword for ‘The Future Landscape for Family Businesses’, FiB’s annual guide and report on the findings of its recent survey.

“Productivity has, since the financial crisis, been puzzlingly weak among British businesses — family-owned firms are part of this productivity puzzle, and are part of the solution to it,” Mr Haldane added.

“With so many of the UK’s small and medium-sized firms being family-owned, efforts to improve their efficiency, governance, skills and R&D could work wonders for these firms’ productivity, and for the economy’s health, at a time when it has never been more welcome.”

However, almost a fifth (16%) of family businesses believe innovation and development is irrelevant to them, according to the FiB research, and 66% fail to even plan and budget for it.

And yet, innovation and technology are ranked as one of the top five challenges family firms say they face, along with an emerging multi-generational structure that presents the potential for conflict about this and other main issues such as risk, purpose, growth, investment, and communication.

The role and significance of embedding technology in family firms’ operation is something highlighted by Gary Grant, the Founder and CEO of family business The Entertainer, who said in his introduction to FiB’s annual report: “We live in the age of ‘disruptive innovation’. Companies such as Uber, Google and Amazon are harnessing new technologies and ways of working to build huge businesses, seemingly in the blink of an eye. If we are prepared to embrace the digital age, then it’s an exciting and dynamic time to be in business.

“Families that successfully navigate these changes will find they can secure the future of their business for generations to come. But in the rush to ‘disrupt’ our current business models, we shouldn’t forget the timeless qualities that set family businesses apart from the rest — integrity, passion, agility and long term planning will service us just as well today as they did 100 years ago.”

FiB’s founder and CEO Dani Saveker says family firms looking for an ‘edge’ should look beyond their main competitors in their quest for longevity: “The best way to stay ahead is to stop trying to beat the competition. Instead, family businesses should innovate and capture new demand, create new buyer value, and make the competition irrelevant.

“Whilst the family unit continues to change and with it the potential for more generations of one family to be working within it, this presents a fresh set of opportunities, as each generation brings their view of the world on matters such as risk, leadership, communication and innovation. These varying views can of course cause challenges however, but it is important to face these and find a way through."