Familyandtrends

The Economist lectures Italian entrepreneurs

by Bernardo Bertoldi

18 April 2026

4' min read

Translated by AI

Versione italiana

4' min read

Translated by AI

Versione italiana

familyandtrends, while being an avid reader, has repeatedly criticised The Economist for its English snobbery towards family capitalism, ever since the 2014 article where the magazine labelled it, quoting Wanner Buffett, 'The lucky sperm club'.

The magazine's article published earlier this month marks some momentous changes; citing the various series on family sagas, it states: 'TV executives have grasped something that the corporate world often forgets: family businesses are not a fringe phenomenon, but arguably the very core of capitalism... These dynasties are now facing a defining moment, as many prepare to pass the baton to the next generation... if (the transition is) mishandled, the disruption to the global economic system could be very serious'.

Welcome, The Economist to the group of those who deal with the continuity of family businesses! In Italia, we can say, we have been doing this for some time, we have been doing it because a group of enlightened entrepreneurs set up the AIDAF, Associazione Italiana Delle Aziende Familiari, in order to delve into the peculiarities of family capitalism, since then academics and entrepreneurs have developed and shared useful experiences. The rest of the article highlights how far the British magazine has to go. Let's see where it goes wrong.

First. When he states that, despite decades of research, academics have not reached a consensus on the superior performance of family-owned businesses. Since 2006, mainly thanks to the work of Villalonga and Amit, it has been known that family-owned firms have an above-average return over medium to long time horizons, that founder-led firms perform better as they are in an early growth phase, that 'managed and owned' firms do better than those 'solely owned' by entrepreneurial families. This fact is confirmed by UBS/Credit Suisse, which for years has been publishing the performance of the family business index.

How far the article is from an understanding of family businesses is clear when it states: '[During crises they do better] ... in our sample, they lost about the same stock market value as other companies during each initial shock, but recovered more strongly'. Entrepreneurial families prioritise soundness and profitability, seldom when quoted do they care about stock performance in the short term. Incidentally, speaking of crisis, The Economist recalls the phrase 'Never waste a crisis' attributing it to the Frenchman Jean-François Decaux, second generation of the eponymous company; while the phrase is to be attributed to an illustrious compatriot of the Economist himself: Winston Churchill.

Second. When he states, referring again to Buffett: 'Many, though not all, [family businesses] continue to appoint an heir as CEO or chairman, a practice that Warren Buffett, a famous investor, once likened to choosing the first-born sons of gold medalists to compete in the next games'. Aside from the fact that, as far as familyandtrends is aware, the reference to Olympians is by Bill Gates, to understand how funny this statement is it is sufficient to recall that Buffett himself has indicated his son Howard as Berkshire's next chairman.

Third. When it states 'only 57% of unlisted family businesses in the US have a succession plan in place'. This sentence exudes bias: if indeed more than half of family businesses have a succession plan in place, it means that they are ahead of large, publicly traded companies, where, as a recent analysis by Harvard found, succession is treated sporadically and only formally. Moreover, the academy has shown that having a succession plan in place does not mean having a formalised succession plan: being a process that takes years, formalisation in the first phase is not necessary; it is more important to get started.

Fourth. When he states that 'less than one-third of unlisted US firms think the next CEO will be a family member... and that outsiders can act as a bridge until the younger generation is ready'. One of the great strengths of family businesses is being able to combine courage and entrepreneurial vision with professionalism and management: these two forces coexist. There is no such thing as a family-led entrepreneurial business and an outsider-led managerial business: there are different mixes of these two qualities, both of which are necessary for long-term success.

Two points in the article deserved more in-depth analysis.

Harvard professor Josh Barrow reminds us how intergenerational entrepreneurial education is crucial, citing the case of "a family that made toy bricks with the company logo and a picture book telling the story of the company".

The quote 'there is a fine balance between innovation and preservation' used to highlight how the long-term vision requires continuous work on the evolution of what has been received from previous generations in order to hand it over better to subsequent generations. Explaining this to the prestigious English magazine is Pasquale Marinelli, 26th generation of Campane Marinelli Pontificia Fonderia di Campane, at the helm of Europe's oldest family business.

Confirming that anyone who wants to understand family businesses has to ask Italian entrepreneurs.

Lecturer in Family Business Strategy - University of Turin - bernardo.bertoldi@unito.it