In the Asia-Pacific region, 85% of businesses are family-owned and they have been estimated to generate about one-third of total nominal GDP. These companies have new hurdles to overcome given the rapid pace of change in technology and markets. A new study, released recently by The Economist Intelligence Unit (EIU), assesses the readiness of family businesses across Asia-Pacific to address future challenges to their operations.
Overall, the report found that family-owned businesses are fairly optimistic. However, the key finding was that seven in ten executives admit that their companies will need to change in order to successfully overcome the challenges of the next three years.
Businesses believe that they would have to change significantly to overcome the challenges of the next three years
Businesses believe that the rapid change in new technologies is the greatest threat to growth in the next three years
Despite high levels of confidence, experts interviewed for our study reveal that actual preparedness to meet future challenges is not as robust as it should be. This encompasses both increasing professionalism and proper management structures to encourage the younger generation to inherit their parents' firms.
Key focus areas for family owned businesses to
match up
with industry peers
Talent
Innovation
Bringing the next generation into the business
is a
double-edged sword. Some can master this
integration,
but some see it as a negative and
will look to exit the
business.
Co-founder of FINH,
an Australian company that consults
family-run businesses across Asia
Family owned businesses are more likely
to do the
following in the next three years
Adopt new
business models
Offer new
products and services
The old generation has to learn how to let go
and let
the next generation run the business
professionally.
However, we see more and
more acceptance of external
advice and a willingness to learn.
Founding director at the
Tanoto Center for Asian Family
Business
and Entrepreneurship Studies, HKUST
The EIU asked family owned businesses about how
well-prepared they are to use the following
4
technologies in the future
Cloud Applications
Data Analytics
Machine Learning
Enterprise Automation
The performance of family businesses has
not matched
that of non-family businesses.
They need to do a lot
more to remain
competitive
Clinical professor and executive director
at the Thomas
Schmidheiny Centre for
Family Enterprise at the Indian
School of Business
Family businesses are seeking external solutions to catalyse new opportunities, such as partnerships with other companies.
Foreign small or
medium-sized businesses
Large domestic
companies
Large foreign
companies
In the past, businesses were able to leverage
their
large balance sheets to grow. But in
the last decade
there has been disruption,
and the younger generation
recognise this.
Academic director of the
Business Families Institute
at Singapore Management University,
as quoted in the report.
Key focus areas for family owned businesses to
match up
with industry peers
Talent
Innovation
Bringing the next generation into the business
is a
double-edged sword. Some can master this
integration,
but some see it as a negative and
will look to exit the
business.
Co-founder of FINH,
an Australian company that consults
family-run businesses across Asia
Family owned businesses are more likely
to do the
following in the next three years
Adopt new
business models
Offer new
products and services
The old generation has to learn how to let go
and let
the next generation run the business
professionally.
However, we see more and
more acceptance of external
advice and a willingness to learn.
Founding director at the
Tanoto Center for Asian Family
Business
and Entrepreneurship Studies, HKUST
The EIU asked family owned businesses about how
well-prepared they are to use the following
4
technologies in the future
Cloud Applications
Data Analytics
Machine Learning
Enterprise Automation
The performance of family businesses has
not matched
that of non-family businesses.
They need to do a lot
more to remain
competitive
Clinical professor and executive director
at the Thomas
Schmidheiny Centre for
Family Enterprise at the Indian
School of Business
Family businesses are seeking external solutions to catalyse new opportunities, such as partnerships with other companies.
Foreign small or
medium-sized businesses
Large domestic
companies
Large foreign
companies
In the past, businesses were able to leverage
their
large balance sheets to grow. But in
the last decade
there has been disruption,
and the younger generation
recognise this.
Academic director of the
Business Families Institute
at Singapore Management University,
as quoted in the report.
Family Businesses Surveyed,
each with revenue between
$100 million to 800 million
Countries:Singapore,
Malaysia,
Thailand,
Philippines, Indonesia
respondents from each country
Access the complete report of this focus study with Economist Intelligence Unit (EIU).
As a leader of a family business, how do you compare to peers in your home country, and to the survey sample as a whole? Take our online survey to find out!
