In the past few days there has been a lot of commentary about collapse of share prices on the ISEQ index. Pages have been devoted to what it means for pensions, whether it is justified and what are the likely implications, if any, on the real world.

Although the market rallied yesterday, investors are not convinced by Ireland.

The troubles of the ISEQ are a reflection of concerns about the future of the Irish economy. But these problems have been obvious for years. It is quite clear that international investors are well behind the times. As the ISEQ is top-heavy with banks and home-builders, the recent travails could be seen as “thumbs down” to the housing market and the banks that finance it. But you don’t need a trading screen to figure this out. The dogs in the street have known that for at least a year. Ordinary people have been keeping their hands in their pockets, safe in the knowledge that they will pick up a bargain in the housing market in the years ahead.

The focus on the ISEQ in the media might also be a reflection of the obsession we have with a certain form of company — the shareholder-based company, where the chief executive is a well-paid manager and the board of the company well-placed business figures. Normally, the financers of the company are shareholders that are typically large pension funds, who are financed by millions of individual pensioners.

In the past few years, most coverage has been focussed on these types of companies and their share prices. Many university courses and specialised business modules for budding captains of industry focus almost exclusively on this type of “managerial capitalism”.

But there are other types of businesses.

Think about the clash of the Titans at the Supreme Court this week between DCC and Fyffes. The winner, Fyffes, is a family firm. Yes, the company has shareholders, but the McCann family run the show. The firm was built by the father and is now run by the sons.

These family firms are infinitely more interesting and, arguably, at least as relevant to the future of this country. They exist in every town and county in the country, yet, we hear very little about them.

They have it all: the power, the money, the sex, the rivalries, the inheritance and the mystic. So why do family firms — which work so well as subjects in fiction and on TV — rarely get analysed by economic commentators?

This omission is made all the more bizarre when you consider that three times more people are employed in Irish family firms than are employed in multinationals here.

In the services sector, over 40pc of all firms are family businesses ( The history of family firms is also a social history starring founders of great vision and energy; incorporating mavericks, loners, visionary entrepreneurs as well as wasters, spongers, gold-diggers, venal spouses and sibling rivalries. In short: the Sopranos are more interesting than the Tescos.

Some family businesses spawn dynasties that last for generations. That is usually the aim of the project. Ireland has few of these; but surely the wealth generated in this boom will be the initial dynamo behind future dynasties which will be maintained, as they have been in the past, by arranged marriages and familial bonds of trust that go deeper than money.

Maybe the reason that business courses ignore the family firm, despite its ubiquity, is that they there is a perception that it is only a “transitional phase” and that ultimately the family will run out of talent and have to hand over the reins to outside managers.

Indeed many might go further and argue that the family firm cannot have the global reach that is necessary for firms to grow in our new inter-related world.

However, the history of post-war Germany and Japan is the history of family firms. German business is dominated by these types of privately run outfits who have no need or interest in revealing anything about the way they are run.

Yet they have created, in Germany, Europe’s leading exporter. The Japanese example is even more compelling as a significant amount of Japan’s exporters and technological leaders are still family-run affairs.

In Ireland, the reason the 40,000 family firms, which, in the service sector alone have a turnover of €40bn, are important is that they might play an even greater role in Ireland’s economy in the years ahead.

As the housing market goes into reverse and the huge debts of the past few years become exposed, our economy will have to toughen up considerably. This will demand entrepreneurial flair and ambition more than anything else. It will also demand that trust is re-established between people and institutions.

In addition, if we experience a housing recession at the same time as some of the big multi-nationals move elements of their production to cheaper parts of the world, there will be a hole in the Irish industrial structure. We know from past experience that this gap can’t be plugged by the public sector so who will come to the rescue? This is where family firms — both local and now interestingly immigrant — might play a significant role.

History reveals a strong correlation between immigration and a spurt in the family firm as immigrants initially stick together and trust each other.

We see this most conspicuously in the great Chinese ex-pat family dynasties of Indonesia, the Philippines and Singapore.

As we speak, there is probably the first generation of Irish- Chinese family firms being worked on tirelessly, not to mention similar Polish, Indian and Lithuanian dynasties. This is where the immigrants have an advantage over us, as technology gives them the chance to build a multinational business using their contacts with the home country in a way that Irish immigrants in the last century could not.

Don’t be surprised if we see a renaissance in the family firm. Far from being a slow-moving, outdated model of how to do business, the family firm may well be the engine that drags Ireland out of a downturn in the years ahead.

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