An innovative mindset, powered by digital fluency and openness to M&A, is helping family leaders to stay resilient, despite volatility and geopolitical risk.

In an era marked by rapid change and global uncertainty, family businesses are proving to be some of the most resilient and forward-thinking players in the global economy.

According to Lauri Oinaala, EY’s family enterprise leader for EMEIA (Europe, Middle East, India and Africa) and global next gen leader, it is their long-term outlook, entrepreneurial mindset and capacity for innovation that set them apart.

“First of all, it’s always the long-term perspective that families have,” he explains. “Families are looking into the future; they are also there for stewardship.”

This focus on continuity, he says, is paired with a more dynamic quality: an entrepreneurial mindset that encourages innovation, helping leaders stay resilient, especially during periods of market disruption.

These traits are not just anecdotal. The 2025 EY and University of St. Gallen Global 500 Family Business Index found that the 500 largest family-owned businesses globally generated $8.8tn in revenues, a 10 per cent increase from 2023, outpacing global GDP growth of just 3.3 per cent. Collectively, these companies employ more than 25m people across 43 jurisdictions. If ranked by GDP, their combined revenue would make them the third-largest economy in the world, after the US and China.

The 10 largest family businesses globally

Tradition and agility

For family firms, long-term success depends on balancing innovation with a respect for legacy. Growth requires building on existing strengths while remaining agile, both in responding to market shifts and adapting to the evolving dynamics within the family.

“You need growth, you need to innovate, you need to build on what you have. But you also understand that through time, you need to be agile,” Mr Oinaala notes. “You need to be agile towards the market, and you also need to be agile towards your family.”

This dual agility is what enables some family businesses to thrive where others struggle.

Only 30 per cent of family businesses survive into the second generation and just 12 per cent to the third, according to the Family Business Institute.

But the figures do not tell the full story. “You could see it from a slightly different perspective. It’s a third of companies every generation that succeed further. There are a lot of other reasons than just failure,” says Mr Oinaala.

In some cases, stepping away is a strategic decision, driven by changes in the industry or reassessment of long-term goals, he explains. A family may choose to exit a business because the sector no longer aligns with their ambitions or values.

The real issue arises when the intent is to preserve the business and legacy, but the transition fails. “If it’s something they have planned for stewardship, but they’re not able to go through with it, then it becomes a little bit of an issue,” he says.

Managing the next generation

The rising generation is reshaping the landscape of family ownership. “Next Gens have never had so many opportunities as they have today,” Mr Oinaala notes. This generational shift also brings new expectations and career ambitions. “We are living in a business environment where change happens so quickly that something you plan for the next generation might be very different in 10 years’ time.”

Proper governance, along with managing expectations of both the current and rising generations, is essential to managing these evolving dynamics, he says. As leadership and ownership often diverge, clear structures help manage evolving roles and responsibilities. Good governance also builds trust by creating space for younger family members to contribute meaningfully, ensuring the business remains relevant as it moves through generational change.

Mr Oinaala is a strong advocate for redefining how families think about ownership roles. “You can exercise active ownership in various ways,” he says. In multi-generational families, with many owners, not everyone can be in positions of trust, which makes leadership selection a question of talent management, not just for external hires, but within the family itself.

He points to the importance of structured governance. Successful family businesses recognise the need to identify individuals who have both ability and interest to lead, whether in operational roles, on the board, or within a family office. In this context, governance should help align family members with both operational leadership roles and active ownership positions, such as board appointments.

Mr Oinaala sees huge potential in leveraging the digital fluency of younger family members. “We are living through a technological revolution. Disruptive technologies, such as AI, are building up challenges, but also opportunities,” he says. Many families are exploring how to integrate these tools across their business portfolios and prepare for what comes next.

Sustainability is another area where the next generation is taking the lead.

“The next generation is driving value-adding, purpose-led initiatives,” he says. Sustainability is becoming a core part of family ownership culture, and increasingly critical to both operating businesses and family office investments.

While intergenerational views may differ, Mr Oinaala believes education and opportunity are key. The more clearly families see the potential of sustainability, the more likely it is to gain acceptance, especially as the next generation takes a leading role.

The growth of family offices reflects a maturing approach to wealth and business governance. “The powers of a family office come when family offices allow family owners to focus on family matters, and the family businesses to focus on business matters,” explains Mr Oinaala.

Family offices also enable capital deployment into new sectors and strategies. According to the EY-St. Gallen Index, 47 per cent of the world’s largest family enterprises have completed at least one M&A deal, with 34 per cent involving transactions over $250m.

This aligns with Mr Oinaala’s view that families are increasingly “asset allocators, able to diversify their portfolio through a family office”.

Evolving advisers

With family businesses becoming more complex and multi-generational, advisers must evolve too. Understanding what drives family owners, their values, priorities and culture, is essential to offering relevant, long-term guidance that supports both the family and its assets, he says.

Crucially, they must address both the rational and emotional dimensions of family life. “You have to balance the rational side of business with the emotional side of family,” he adds. “There are two systems that are intertwined,” calling for a holistic, tailored approach, which “needs to be somewhat exclusive for each and every client, because every family is different”.

Despite global volatility and increased geopolitical risk, Mr Oinaala remains optimistic about the resilience of family enterprises. “Families are quite well equipped to ride the wave of disruption, due to their long-term thinking, and quite lean governance model.”

Latest data confirms that optimism. The average revenue of Global 500 family businesses now stands at $17.6bn, with 80 per cent generating more than $5bn annually.

Europe remains a stronghold, home to 47 per cent of these enterprises, including five of the top 20 in Germany alone. Retail, consumer, and advanced manufacturing remain the dominant sectors.

“They are probably in better shape than we think to really navigate through the disruptive landscape,” he says.