By Eakasart Sappachang
In Thai society, we are ranked by title, but Americans are ranked according to their bank account balances and how large their estate is. For example, the Kennedy klan is admired as American political royalty, and the Rockefellers are praised for their accomplishments in business and a long history of power and influence.
The top 25 richest American families, ranked by Business Insider, have total assets of over one trillion US dollars (absolutely not including Donald Trump), or approximately 30 trillion baht. They are ranked not only on wealth but also on their influence and the strength of their family business model. This makes it difficult for the new generation of business families in America because their business model has changed from private ownership to corporate. Now the major stakeholders do not have as much management power. They failed to maintain a strong internal family relationship with their business, which may say a lot about how functional their families are too.
The Business Insider list is mostly populated with billionaire families running just the types of business you suspect they would: oil, pharmaceuticals, banking, alcohol, cosmetics and the like. It's more interesting to see that big media and entertainment businesses are still run by families who make the list. Why have media companies survived in America while others have gone off to Europe, Asia or even Australia?
In my opinion, I think Americans especially love watching media, not only the news but movies and sports too. They take it very seriously and the broadcasts are extensive and filled with data and trivia. If you have ever watched an NBA basketball game then you have seen a screen full of scrolling numbers and statistics, which is the style of American entertainment. Another reason family-run media companies continue to thrive in America is that they have a worldwide viewer base and a global distribution network, which is protected from aggressive competition. The USA has become the biggest exporter of news and entertainment on the planet due to factors both external and internal.
Media families are a big part of American history and they have roots that run wide and deep to ensure continued growth. For example, the Newhouse family owns Advance Publication, Condé Nast and 25 other media companies including Reddit. Then there is the Hearst family who owns Esquire, Harper’s Bazaar and whose branches spread out over 300 different media outlets, all connected to and controlled by the family. They have assets of 24.5 billion US dollars, which is even greater than the Newhouse family, at only 18.5 billion US dollars. However, the Newhouse family is still a lot richer than either the Rockefeller or the Goldman families.
In the future, I think family businesses will continue to grow, but it all depends on their descendants' willingness to stay in the family business and their ability to maintain the systems to prevent losing all that money, which I will talk about in the next part.
Almost all old money families are not very tech-savvy in businesses, except for the media families who are forced to adapt to the quickly changing ways people consume media these days. At the other end of the spectrum is the new money families who have grown up with technology and made it part of their businesses from the start.
James Bessen, a researcher from Boston University told The Wall Street Journal that many of these big family-run companies are now investing heavily in technology by developing their own or else buying up smaller technology companies. For example, Apple, Facebook, and Alphabet, the owner of Google, all routinely buy up smaller technology companies and incorporate them into their own. Small companies involved in artificial intelligence, database management, and emerging technologies often find themselves being swallowed by a bigger fish. Also, the top four American companies now invest more than 20% of their revenue in technology. Compare that to a decade ago when they were only investing 7% of their revenue in technology.
This may be the reason why the very richest of all American billionaire families, the Walton family of Walmart fame, recently decided to work with Microsoft in developing new technologies to help catch up to Amazon.
In the previous decade, Walmart was leading with technological achievements such as the invention of an all-new barcode system to manage stock and check sales balances. This made Walmart grow fast and be competitive with other big retailers. It's very telling when the richest family in the world invests so heavily in technology, and it causes all types of businesses to take note.
Our government has recently announced that we are now called Thailand 4.0, yet we are still mostly receivers of technology rather than creators of it. This is the nature of developing countries. China is in a state of rapid growth, but technological innovation is lagging behind because they too are still a net receiver of technology. In conclusion, wealth only lasts as long as the fire that created it, however, families are able to keep that fire burning across generations with wisdom and open minds, or else watch it burn out.
Here's wishing your business, and your family, all the best!