Swiss Family Businesses Awarded for Entrepreneurship
The Swiss Venture Club is a non-profit organisation that, among other initiatives, runs an annual award aimed at recognising the most innovative and entrepreneurial companies. It is organised both regionally and nationwide. In Southern Switzerland, the 2017 edition has been recently awarded. Among the five finalists, three are family businesses belonging to the Ticino Family Business Association. This achievement contrasts one of the most believed common wisdoms: that family businesses are conservative and risk averse while new ventures are innovative and risk takers. In recent years, many scholars have researched family firms’ innovative behaviour, proving that, even if they have a more conservative risk profile, they have their own approach to innovation. In fact there are many innovation models. For instance, many startups focus on highly risky radical product innovations, while family firms innovate mainly on processes and business models. Even the innovation temporarily diverges: family firms innovation patterns tend to be continuous and systematic with long-term multigenerational objectives; startups investments in innovation have a shorter time horizon. Venture capitalists influence this need for fast payback, knowing that their investments are extremely high risk. One of the reasons why family firms show a lower risk profile when they invest in innovation, is the social-emotional wealth that family members have accumulated generation after generation. Family decision makers avoid risky behaviour in order to preserve their socio-emotional wealth.
For a country it is important that family firms represent a big percentage of GDP as they contribute to the economic dynamics without adding excessive risks. Moreover, family businesses tend to be rooted in their countries and to develop special relationships with their employees, often considered an extension of the family. Several studies proved that family firms have been resilient during the 2008–2014 crisis; their innovation strategies are aimed at preserving, not at destroying jobs. In part this behaviour is due to the fact that family shareholders are often responsible citizens. In part it is because they are aware that human capital is a key component of the innovation processes that sustains family businesses longevity.
These themes will be discussed during the next Global STEP Summit, at the Università della Svizzera italiana (Lugano — Switzerland), November 8th –11th, 2017. During the Summit many family businesses and enterprising families from all over the world will share their experiences about thriving on chaos and being resilient to crises.