Family businesses will contribute £218 billion a year to the UK economy by 2018

First generation family-owned SMEs are set to see their revenues rise from £540 billion a year to £661 billion by 2018 – a 22% increase.

This is according to a new report by Barclays Business which found first-generation family SMEs currently contribute £180 billion in gross value added (GVA) to the UK economy, an annual contribution that is set to rise by 21% in nominal terms, reaching £218 billion in 2018.

The value of family SMEs, as a group, to the British economy is currently greater than that of the overall manufacturing and wholesale or retail sectors.

The “Family Affair: Spotlight on UK Family SMEs” report, conducted by Barclays Business and CEBR, found that there are currently 2.42 million first generation family SMEs in the UK – the highest number since the recession took hold in 2008, when the figure stood at 2.45 million.

The number of family SMEs has increased over the past three years, up from 2.32 million in 2011. That number will rise further – to 2.65 million, by 2018.

First-generation family SMEs make a sizeable contribution to UK employment – and this contribution is also set to rise in the coming years. There are currently 5.5 million jobs provided by these family SMEs in the UK- equivalent to the number of jobs in the public sector5. By 2018 this will increase by 9% to 6 million.