The next generation of family business owners in Germany wants to accelerate digitalization in their companies—yet at the same time, they are at odds with current operational leaders over the pace of digitalization. Only 28 percent say they are satisfied with the progress of digital transformation. This is one of the findings of the latest installment in the “Germany’s Next Generation of Entrepreneurs” study series by the Family Business Foundation, which was conducted by the Friedrichshafen Institute for Family Businesses. The empirical study included 357 representatives of the next generation of entrepreneurs, aged between 16 and 40.
The study’s findings thus support the conclusions of other studies, such as one conducted last year by the consulting firm PwC. The firm had surveyed 137 successors from 21 countries. Only 7 percent of respondents stated that their family business is well-positioned in the area of digitalization. More than a third are frustrated because the parents’ generation pays too little attention to digital transformation.
According to the study by the Family Business Foundation, the younger generation is confidently demanding the freedom to implement their digital ideas. They also have employee training in mind: 72 percent of business successors want to strengthen their employees’ digital skills through continuing education and training. In the view of the next generation, customers can also be partners on the path to digital transformation; startups and research institutions, on the other hand, play hardly any role.
Most members of the younger generation have no doubts about taking over the family business. 67 percent of those surveyed consider it likely that they will serve as managing directors in their own family businesses. However, their entrepreneurial self-confidence is also reflected in the fact that 45 percent of them consider it likely that they will start their own companies. A quarter of them also view their own entrepreneurial experience as preparation for taking over the family business.
These findings also corroborate the results of a 2016 PwC study. 88 percent of the next generation see themselves not merely as stewards of the family legacy, but as its shapers. Those surveyed by PwC also consider it important to gain professional experience outside their own family business: 70 percent of them consider it natural to first work at another company and then take on a role in the family business.
The study by the Family Business Foundation further emphasizes the importance of long-term commitment in family businesses. For example, 76 percent of respondents state that successfully transferring the business to the next generation is an important goal. This also ensures the stability of the companies: 74 percent of respondents indicate that family businesses adopt a long-term perspective in their investment policies.
“The next generation identifies with their company and is ready to take on a role as managing director, board member, or shareholder. In doing so, they assume long-term responsibility at a time when the business world is becoming increasingly short-sighted,” says Stefan Heidbreder, managing director of the Family Business Foundation. “With regard to digital transformation, the survey paints a picture of a generation that wants to carry on traditions but also break new ground.”
The PwC study from the year before last focuses even more strongly on potential conflicts—particularly during business succession. For example, 52 percent of the next generation fear that they will have to spend too much time dealing with internal family issues. 61 percent believe that it is difficult for the older generation to let go and step back from the business.
