Asia Pacific NextGen Club
The Asia Pacific NextGen Club allows nextgens in the region to foster inter-regional relationships, leveraging insights from PwC experts and through networking with other nextgen clubs.
The world is changing and so is the winning formula for long lasting family business success. To thrive in today’s world, Singapore family businesses require a change of mindset, a rethinking of priorities and behaviours, including heightened investment in the digital tools needed for continued economic resilience and more importantly, a new definition of legacy.
Our 10th PwC Global Family Business Survey unearthed the current thinking and future outlook of 2801 family business leaders across 87 territories, of which 80 were from Singapore, representing a diverse mix of businesses and industries. Our findings show it’s no longer enough for family businesses to piggyback on values and legacy to propel the business forward.
Singapore’s family businesses of tomorrow must embrace a new approach, one that is based on accelerated digital transformation, professional family governance and an impending prioritisation of sustainability goals. Indeed, they have been ‘giving back’ to society, but for them to make a positive impact today and ensure a legacy for future generations, alignment of profits with purpose is key. Family business leaders must demonstrate their environmental, social and corporate governance (ESG) credentials with concrete actions. It’s a business imperative today.
For family businesses, the time to act is now.
“The survey results this year aren’t very different from the findings in the previous years. Perhaps that’s worth noting, as it does indicate that family businesses aren’t thinking much differently despite the world of business being set upside down by the pandemic. It’s time for sustainability transformation to take centre stage, even as local family businesses keep their focus on diversification, expansion and digitalisation.”
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Singapore family businesses have seen a mixed performance over the last financial year (pre-Covid-19), with 49% experiencing growth and 21% seeing reduction in sales. This is slightly less positive than the scene globally and in Asia Pacific where the majority of family businesses experienced higher growth (Exhibit 1). More than half the Singapore family businesses (56%) expect reduction in sales due to COVID-19, compared to 48% in APAC and 46% globally.
However, Singapore’s future growth aims are ambitious compared to their global and Asia Pacific counterparts, with 90% expecting growth to surge in 2022 (Exhibit 2). The outlook for 2021 is albeit cautious as 64% of Singapore family businesses expect to see growth, much in line with family businesses in Asia Pacific and worldwide.
Singapore family businesses will need to demonstrate added resilience as they chart their recovery and stay on course to meet their growth targets. Those that will rethink, reconfigure and re-start with new business models aligned with new world dynamics, will be in an optimal position to seize the new opportunities when the global economy reopens.
Our Family Business Survey 2021 report mirrors PwC’s 24th Annual Global CEO Survey findings which revealed a rebound in CEOs’ confidence in global economic growth as well as their own company’s revenue prospects. Singapore respondents in both surveys are seen prioritising investments in digitisation and expansion, but notably to a lesser extent, in climate change.
The overall survey findings are positive, yet it's like a wakeup call for most Singapore family businesses. Their financial resilience may make them well-placed to succeed in the near term, but they must readjust strategies and transform business models to power their post-pandemic recovery and growth in the longer term. Embracing emerging technologies and tighter family governance are key imperatives. Moreover, they must revisit their purpose and chart out concrete action plans to deliver on measurable non-financial impact.
The Asia Pacific NextGen Club allows nextgens in the region to foster inter-regional relationships, leveraging insights from PwC experts and through networking with other nextgen clubs.
Building your family and business generation by generation
Ng Siew Quan
Asia Pacific Leader, Entrepreneurial and Private Business, PwC Singapore
Tel: +65 9726 9880