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It’s 2022 and we live in a world characterised by rapid changes and unforeseeable global threats. The next generation of family business leaders are faced with many unprecedented challenges, including economic disruptions caused by the pandemic, the threat and implications of climate change, and the fast-paced technological revolution of the 21st century. It is their responsibility to challenge the status quo and act as catalysts for change while also focusing on one common generational goal: driving growth to secure the stability of the business and the family.
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PwC’s Global NextGen Survey 2022, the most extensive survey of the next generation of family business leaders we’ve ever conducted, reflects the extraordinary times we’re living through. The COVID-19 pandemic is testing companies around the world, and family businesses are rising to the challenge.
Of the 1,036 NextGens that participated in the global survey, about one-third of the respondents are from the Asia Pacific and ASEAN region, providing insights as to what issues the NextGens are facing, what their next steps are towards achieving business growth through sustainable business practices, how they continue to strengthen the family bonds and communications, and what they are doing to secure the future of their families.
Asia Pacific and ASEAN NextGen priority: achieving business growth
Across the board, achieving business growth is an overwhelming priority in Asia Pacific and ASEAN regions. With over 98% of Asia Pacific NextGens (against 88% globally) actively engaging with measures to achieve business growth, it is evident that the Asia Pacific and ASEAN NextGens are determined to further expand on the businesses they are inheriting.
From the 380 Asia Pacific and ASEAN NextGens interviewed, we have shortlisted 3 key messages: moving forward from the pandemic, the rise of ESG and everything technological advancement entails.
Moving forward from the pandemic
The COVID-19 pandemic in the last 2 years has been challenging for businesses and individuals. It is not just coping with the turbulent business and political environment but it has also upended how we interact with our family, our friends and our clients.
Most family businesses have seen their bottom lines drop and revenues slashed. However, the pandemic has also brought forward succession plans and led to more NextGens stepping up in their roles in their family businesses, some much earlier than anticipated.
Amid these unprecedented times, it has also brought the generations together towards one common goal - adapt to the new normal, drive growth and build up the family legacy.
43%
of Asia Pacific NextGen feel the COVID-19 pandemic has increased their commitment towards the family business. But 14% feel less committed.
Source: PwC’s Global NextGen Survey 2022
48%
of ASEAN NextGen feel the COVID-19 pandemic has increased their commitment towards the family business. But 17% feel less committed.
Source: PwC’s Global NextGen Survey 2022
43%
15%
43% of Asia Pacific NextGen said that the COVID-19 pandemic has brought forward or increased their involvement and engagement in the business in any way.
15% of Asia Pacific NextGen COVID-19 led to them being asked to lead on specific projects, inline with the global average(14%).
43%
16%
43% of ASEAN NextGen said that the COVID-19 pandemic has brought forward or increased their involvement and engagement in the business in any way.
16% of ASEAN NextGen COVID-19 led to them being asked to lead on specific projects, inline with the global average(14%).
57%
35%
57% of Asia Pacific NextGen believe COVID-19 resulted in communication between family members about the business increased (similar to the global average: 56%).
35% of Asia Pacific NextGen believe COVID-19 resulted in stronger communication between NextGen and the current generation of leadership (similar to the global average: 36%).
61%
39%
61% of Asia Pacific NextGen believe COVID-19 resulted in communication between family members about the business increased (similar to the global average: 56%).
39% of Asia Pacific NextGen believe COVID-19 resulted in stronger communication between NextGen and the current generation of leadership (similar to the global average: 36%).
Today’s dynamic and ever-changing business environment requires businesses to be agile and forward thinking. The pandemic, while bringing on an onslaught of challenges, has also proven that the tenacity and resilience of family businesses, especially the NextGens, are adaptable and capable of stepping up and making difficult decisions, in order to drive their businesses forward.
What are the next steps?
- As the pandemic has improved communication and brought the generations closer, it is time to set the expectations and work out what are the next steps.
- The time is now for NextGens to engage in a cross-generational dialogue, instil confidence, manage expectations and help the current generation reimagine business success.
Rise of ESG
As the world is entering an era of change, more political and corporate entities are focusing on ESG. There have been increasing initiatives by all industries to implement sustainable business practices, and more pressures on other industries to initiate implementation. This is no exception for family businesses across Asia Pacific and ASEAN, where it is evident that the NextGen are actively prioritising protection of the environment and the importance of ESG to ensure responsible business growth.
While a positive trend is evident in the results, there are no significant differences between the Current and NextGens, indicating that the next generation of leaders are still slow to react to this new challenge.
NextGen leaders are ready to challenge the status quo of their family businesses and take a more proactive approach towards tackling the issue of climate change through responsible business practices.
As ESG is fast becoming a pivotal point for business growth, NextGens need to take a lead in building an ESG strategy and reimagine their family business’ success. They need to help accelerate delivery on sustainable growth and prepare themselves to be the future leaders who can secure and build on the family legacy.
What are the next steps?
- Applying an ESG lens to business strategy and operations has become a business imperative in order to deliver growth.
- Family, their businesses and management need new perspectives and upskilling in order to take advantage of the opportunities to transform.
Technological advancements
In the digital age, many businesses are taking the leap to transform and automate. Technology is advancing at a rapid pace, businesses are increasing their productivity and simultaneously decreasing costs. Streamlining current business practices is made possible through automation and online processes. With digitalisation, companies’ carbon footprint is reduced and environment protection is enhanced.
However, technological advancements have also led to an increase in the number of cyber attacks and data breaches. Having greater access to the internet increases the risk of data theft. The issue of data privacy is becoming more and more prominent. However, only a small percentage of NextGens view this as a business priority.
12%
of Asia Pacific NextGen emphasise cyber security and privacy as a priority for their family business, compared to 15% globally.
Source: PwC’s Global NextGen Survey 2022
What are the next steps?
- Given the rapid increase in digitalisation, NextGens should take measures to protect their digital assets.
- Be vigilant of potential cyber security threats and implement the necessary counter measures to combat any data attacks.
It’s time to reimagine what success means—and you, as NextGens, have the foresight to lead the way. You know the path the business must follow; it’s up to you to become the leader your business needs. Be yourself. Be different. Drive change.
About the NextGen survey
PwC’s Global NextGen Survey 2022 is an international market survey among next-generation members in family businesses. The goal of the survey is to get an understanding of what NextGens are thinking on the key issues of the day, what role they are playing and what roles they think they should play. The survey was conducted online in collaboration with The Family Business Network (FBN). There were 1,036 interviews in 68 territories, between 8 October and 12 December 2021.
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