Smaller family companies are the unexpected innovation powerhouses in many countries in the world

The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.

Close your eyes and imagine a world where the most innovative companies aren’t big tech giants but family-run businesses. Now open your eyes, because you don’t have to imagine it: It’s reality.

That’s what our team of business experts found in a recent global analysis of research into family-owned and family-run firms.

When we reviewed 193 studies published from 1996 through 2022 about the strategies, including innovation, that these businesses pursue, we saw that smaller family companies lead the charge in innovation – with a caveat.

Specifically, we found that small and medium-sized family companies in legal environments with strong property rights are the most innovative in the world. They surpassed large family businesses and non-family-run business of all sizes.

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