1、By dynamically fusing leadership transition and generative AI,family enterprises create opportunities for the next and succession in an AI worldPwCs Global NextGen Survey 20242Global NextGen Survey 2024As the reins of family businesses are set to pass into the hands of a new generation of leaders,a

2、profound transformation is underwayone fuelled by the catalytic force of generative AI(GenAI).This moment marks not only a change in leadership,but a strategic shift towards harnessing a fundamentally new technology within family-run and-owned businesses.For those that get it right,generative AI wil

3、l shape future success.And we believe that the next generation of family business leaders(a group we call NextGen,which refers to members of the next generation of a business-owning family who are between ages 18 and early 40s and are aiming to become responsible owners,influential board members or

4、visionary leaders)hold the key to this transformation.Our global survey of more than 900 NextGen suggests not only that they are more optimistic about generative AI than the incumbent generation,but that they understand the urgent need to shift responsibility for AI out of discrete silos and to depl

5、oy it to support enterprise-wide adoption in their companies.Source:PwCs Global NextGen Survey 2024of NextGen believe that generative AI is a powerful force for transformation,but many question the ability of their family business to capitalise on it.73%3Global NextGen Survey 2024NextGen show remark

6、able alignment with the sentiment of global chief executives regarding the transformative powers of generative AI.According to the 2024 PwC Global CEO Survey,70%of business leaders believe that generative AI will significantly change the way their business creates,delivers and captures value.We also

7、 see broad acknowledgment of the importance of developing an“early days”generative AI strategy to get ahead of an accelerating existential crisis.Fully half of all bosses of privately owned companiesof which family businesses are an important subsetsay that their company will cease to be viable with

8、in ten years if they stay on the current path.We cannot afford for family businesses to ignore this transition.Family businesses are a substantial part of the economy,contributing approximately 70%of global GDP and employing 60%of the worlds workforce.Thus,harnessing the potential of generative AI i

9、snt only about any one firm staying competitive;its about shaping the global economic landscape.NextGen as future business ownersand important inheritors of the largest wealth transfer in historyhave a unique responsibility towards their business,its employees,their families,society and the environm

10、ent.This includes an outsized interest in the businesss ability to responsibly navigate the hype,hopes and fears surrounding generative AI.Our survey findings and the important actions we outline below across three critical areasinnovation,trust and successionshow that these changes cannot be delaye

11、d until the next natural transition of generational ownership.They must begin now.4Global NextGen Survey 2024Turbocharging innovation in family businessesThe willingness of NextGen to explore new ideas and technology while feeling that they are fighting against the more traditional instincts of the

12、current leadership is a long-standing trend in family businesses.The reality is that each generation has its own capabilities and is working towards the same goal:to secure the business and its legacy.The hardest part of digital transformation is changing the culture of the business to align with ne

13、w challengesand thats even more difficult in a family-owned and-operated enterprise.Enrique Hinojosa,fourth generation,Welldex Logistics,MexicoMore than 70%of NextGen believe that AI is a powerful force for business transformation,but they are rightly concerned about the ability of their family busi

14、ness to withstand the disruption of generative AI and to capitalise on its opportunities.They are significantly less optimistic than the current generation of leaders about the businesss readiness and doubt that the current generation grasps the full potential of AI.The upsides encompass unlocking a

15、 range of opportunities,including improved products and services,faster time to market,improved decision-making and higher profits,according to Scott Likens,Global AI and Innovation Technology Leader,PwC US.5Global NextGen Survey 2024NextGen are less positive than the current generation on issues re

16、lated to clarity of roles,governance and digital capabilitiesThere are clear roles and responsibilities for those involved in running the businessWe have a clear governance structureThere is a resistance within the company to embrace change0%10%20%30%40%50%60%70%80%Question:How strongly do you agree

17、 or disagree with the following statements?(Showing only agree responses)NextGen Current generationNote:Respondents provided an answer on a 5-point scale from disagree strongly(1)to agree strongly(5);agree is the sum of respondents who selected 4 or 5.Source:PwCs Global NextGen Survey 202463%51%74%6

18、5%32%36%Family businesses,which typically approach innovation more cautiously than publicly listed companies,do indeed find themselves in a precarious position.Almost half of family businesses(49%)have either prohibited or not yet started to explore AI,and only 7%have implemented it anywhere in the

19、business.In comparison,32%of all CEOs say they have already implemented AI in their business,and 31%of all CEOs say they have changed their technology strategy as a result of AI.6Global NextGen Survey 2024There are solid reasons for this conservative approach.In any business or sector,implementing g

20、enerative AI is a marathon rather than a sprint.Any company will need to strike the right balance between urgency and prudence:move too slow,and you lose out to your competitors;move too fast,and the risks increase significantly.Very few family businesses are actively using generative AIOur company

21、has currently prohibited its useWe have not yet started to exploreExploration phaseCurrently testing and pilotingTested and pausedActive in a few areasActive in many areas0%10%20%30%40%Question:How would you describe your family businesss current level of adoption of generative AI?No activity Early

22、stage Currently implementedSource:PwCs Global NextGen Survey 20249%40%30%7%1%1%6%7Global NextGen Survey 2024Financing innovationFamily businesses in particular are rarely technological front-runners.Due in part to their restricted access to capital,as a rule they heavily favour proven technology ove

23、r emerging tech like generative AI.However,the investment landscape appears to be shifting,and may signal an increased willingness to innovate.Family businesses consistently report healthy growth,with 43%reporting double-digit increases in sales last year,according to research conducted for our Fami

24、ly Business Survey 2023.Whats more,private equity has become an increasingly attractive option for family businesses seeking a capital injection,a strategic partner or a rapid exit route.Research by PwC Germany shows that 90%of family businesses would now welcome private equity investmenta significa

25、nt rise from 2011,when only 18%said the same.The driver for the incumbent generation will be when they see the results of industries that have implemented AI,compared with those that have noteven more so when you see your margins decrease and the margins of your competitors increase.Hristo Hristov,s

26、econd generation,Darik Holding,Bulgaria8Global NextGen Survey 2024Next steps for the incumbent generation Learn what generative AI could mean for you.Family businesses urgently need to assess the consequences of generative AI,positive and negative,direct and indirectincluding the consequences of doi

27、ng nothing.Dont lose any more time;start the assessment now.Put AI on your CEO and board agenda.The decision to implement generative AI in the business should be a debate about strategy,not about functions,tools or technology.However,it is currently treated as a strategic topic by the CEO or board i

28、n just a small minority of family businessesand in the rest,it is addressed only on an operational level or is delegated to the head of IT.Focus on timing and communication.The management of wealth is closely linked to the concept of ownership competence:the skill through which ownership is used to

29、create value.In the context of generative AI,it is important to get your strategy,governance and timing right.Employees,customers,and other stakeholders expect clear leadership and guidance from the business owners to overcome fears and internal resistanceand,ultimately,to set the foundation for gro

30、wth and innovation.9Global NextGen Survey 2024Next steps for the next generation Seek out dialogue.You may be wondering whether it is appropriate to raise your questions and concerns about technological transformation.However,if you feel well equipped to understand the opportunities and risks relate

31、d to generative AI,dont be afraid to talk to the current generation of leadership;it will be for your mutual benefit.Understand your business and its limits.You need to be knowledgeable about the current business model and the financial and organisational limits of the company before you can challen

32、ge them.If you are unfamiliar with the businesss culture,capabilities and skills,ask for opportunities to learn and become better acquainted with them Initiate or volunteer for pilot projects.Embrace opportunities to learn,try and fail in order to develop your skills and talents with great passion.U

33、se this potential to initiate or volunteer for generative AI pilot projects,which will allow not only you but also the organisation to learn faster and get familiar with the new technology.10Global NextGen Survey 2024Protecting trust in an AI-driven worldTrust in business and trust in technology are

34、 inextricably linked.The rapidly evolving landscape of generative AI places considerable pressure on leaders to make the right decisions for their customers,their employees,the environment and society.Family businesses,which consistently rank as the institutions most trusted to do whats right,are we

35、ll situated to build trust.Family businesses have to observe guard rails as they experiment with generative AIand they cant afford to get it wrong.According to Scott McLiver,Asia-Pacific generative AI partner,PwC New Zealand:The rise of generative AI marks a significant change in how businesses crea

36、te and capture value.It also casts a spotlight on the resilience and adaptability of family businesses,and puts their enduring trust premium under pressure.Mind the riskGlobal CEOs see a variety of risks associated with generative AI,including cybersecurity risk and the potential for biased decision

37、s being made or biased actions being taken towards groups of employees or customers.CEOs of family businesses show similar levels of concern.But NextGen are notably less concernedwhich could suggest either that they are underestimating the risks associated with generative AI or that they,as a younge

38、r,more tech-savvy cohort,are more knowledgeable and experienced than the established business leaders.11Global NextGen Survey 2024NextGen perceive fewer risks associated with generative AI than CEOs doCybersecurity risk0%10%20%30%40%50%60%70%Question:To what extent do you agree or disagree that gene

39、rative AI is likely to increase the following in your company in the next 12 months?(Showing only agree responses)Al CEOs*Family business CEOs*NextGenNote:Respondents provided an answer on a 5-point scale from disagree strongly(1)to agree strongly(5);agree is the sum of respondents who selected 4 or

40、 5.Source:PwCs 27th Annual Global CEO Survey(*),PwCs Global NextGen Survey 202464%67%48%Spread of misinformation52%52%33%Legal and reputational risk46%46%29%Bias towards groups34%37%25%Even so,NextGen understand the importance of implementing generative AI carefully;50%believe that there is an oppor

41、tunity for family businesses to lead the way on the responsible use of AI and other technology.Conscious,responsible adoption will ensure that family businesses gain from the technology while protecting their vital trust premium with employees and customers.12Global NextGen Survey 2024For family bus

42、inesses,that translates to an urgent need to make AI a strategic issue,and to pay close attention to governance and communication.By doing this,they can show that generative AI can be implemented with a high level of care,diligence,oversight and controls.Strong governance is essential.But because fa

43、mily businesses are at a very early stage in the journey,only 6%have defined governance around using AI responsibly;an additional 62%believe they should establish such governance but havent done so.NextGen also strongly believe that good communication with employees is crucial to preserving trust84%

44、believe that there should be training for management and employees so they can better understand the risks and opportunities of AI,although only 12%of businesses have taken this step so far.We use AI today in our loyalty apps,so that our customers get deals on products they like.However,the AI did n

45、ot give great results in the beginning,as it took a while for the technology to learn customer habits.We saw that having the right amount of communication was important for our franchisees to give the technology some time to work properly.Sunniva Reitan,fourth generation,Reitan AS,Norway13Global Nex

46、tGen Survey 2024Governance and training around using AI responsibly are missing,but wantedQuestion:Do you believe your family business should have governance around using AI responsibly?No Yes,but we do not have this defined yet Yes,and we already have this definedQuestion:Do you believe that your f

47、amily business should offer training for management and employees to understand the potential risks and opportunities related to AI?No Yes,but we dont do so yet Yes,and we already doNote:Not showing Dont know answersSource:PwCs Global NextGen Survey 20246%12%62%72%16%7%Its very important that we get

48、 to know and understand AIwe may think we understand it,but we dont yet know its limitations.Ronald Adiwijaya,fifth generation,PT Nojorono Tobacco International,Indonesia14Global NextGen Survey 2024Next steps for the incumbent generation Decide where best to direct resources.Investment in AI follows

49、 two broad routes:transforming your current operations(by achieving productivity gains and/or developing new products and services),or investing in new companies through corporate or family ventures.The two are not mutually exclusive,but the board needs to be clear about where the business will dire

50、ct its resources.Align family values,business purpose and governance.Family businesses can be conscious adopters of generative AI,but it is important for everyone in the family to understand what this means and how it aligns with the family values and business purpose.Reviewing your family and corpo

51、rate governance as well as your leadership and board composition will help to get this right.Listen and explain.Maintaining the trust of employees requires strong and clear communication from leadership.Fully 82%of respondents to the 2024 Edelman Trust Barometer survey said that active listening by

52、leadershearing concerns and answering questionsbuilds trust.15Global NextGen Survey 2024Next steps for the next generation Get your licence to earn trust.You want to earn recognition and respect in your own right and not trust your birthright.A solid education and relevant working experience outside

53、 the family business will give you the confidence to contribute and the ability to earn the trust necessary for future leadership or board positions.Be clear on your motives.NextGen should be clear why they want to join the family business.What is your passion;what are your motives?Become familiar w

54、ith the rules and regulations.NextGen should position themselves as being able to navigate ethical considerations and legal frameworks to foster responsible AI adoption and ensure sustained growth in their company.16Global NextGen Survey 2024Maximising NextGens contributionNextGen understand their v

55、alue in an AI-driven world40%believe being an AI champion will help them move into a leadership position.But this is much more than a golden opportunity for NextGen to carve out an important role in the business.The legacy of family businesses is at stake.One of our family companies is already using

56、 AI.In the more established business,a manufacturing company which has been going for 70 years or more,its hardly discussed.The two sides of the business definitely need to talk more and explore synergies.Aaro Vasama,fourth generation,Kemppi Group Oy,FinlandOnly 14%of family businesses currently hav

57、e a team or person in the company who is directly responsible for generative AI,often the head of IT.The likelihood of such a position existing increases in larger and more mature companies.So far,NextGen have not been closely involvedonly 12%are already engaged in AIbut a further 58%say that they a

58、re likely to be engaged in generative AI discussions in the future.NextGens potential is being neglected,which will have consequences for the business,for governance and for family dynamics.The generative AI champions of tomorrow are likely to be passionate and entrepreneurial challengers,says Frauk

59、e Schleer-van Gellecom,EMEA finance transformation(generative)AI partner,PwC Germany,rather than mature experts who tend to think within the current boundaries.17Global NextGen Survey 2024NextGen who are already actively engaged in AI are more forward-looking in their approach to the business;they a

60、re also more likely to be engaged in sustainability investment,for example,and in investing in innovation and R&D.They are more optimistic about the opportunities that AI brings,but also clear about the impact AI could have on the business and its workforce and skills.NextGen already using generativ

61、e AI are in the minority,but show huge potential Question:Are you actively engaged at present or likely to be engaged in the future in the area of generative AI?Engaged now Likely to be engagedNote:Not showing Dont know and Not engaged answersSource:PwCs Global NextGen Survey 202458%70%12%Average Ne

62、xtGenWe are at an early stage of contemplating the use of AI in the business,and I make sure that the people responsible for considering our options keep me in the loop.I dont have a background in IT,but I feel I can add to the debate because I come from a newer generation and can show a modern ment

63、ality.Marta Barcel,4th generation,Barcel Group,Spain18Global NextGen Survey 2024NextGen who are actively engaged with generative AI see benefits to the business from the new technologyIn the next three years,generative Al will significantly change the way our company creates,delivers and captures va

64、lueIn the next three years,generative Al will require most of our workforce to develop new skillsGenerative Al will increase our companys profitability in the next 12 monthsGenerative Al has already changed our companys technology strategyGenerative Al will mean a reduction in our companys headcount

65、 in the next 12 months0%0%20%20%40%40%60%60%80%80%100%100%Question:To what extent do you agree or disagree with the following statements about generative AI?(Showing only agree responses)Actively engaged are the 12%of respondents who chose that answer in the chart above called NextGen already using

66、generative AI are in the minority,but show huge potential Not actively engaged are the 88%of respondents who chose an answer of Likely to be engaged,Not engaged or Dont know in the chart above called NextGen already using generative AI are in the minority,but show huge potentialNote:Respondents prov

67、ided an answer on a 5-point scale from disagree strongly(1)to agree strongly(5);agree is the sum of respondents who selected 4 or 5.Source:PwCs Global NextGen Survey 202469%41%46%19%11%16%62%39%37%28%Actively engaged1Not actively engaged219Global NextGen Survey 2024Next steps for the incumbent gener

68、ation Involve NextGen in generative AI.You can start by engaging NextGen in low-risk,high-return generative AI pilot programmes.This will support the generational transition and prepare them for future roles in the business.Treat them as a valuable resource with which to build your AI strategy and f

69、irm-wide AI capabilities.Use NextGen and their enthusiasm to strengthen the board.Combine NextGens acumen for technology with the business experience of older board members.Invite them as guests to your board meetings,and allow them to listen,learn and contribute their fresh ideas and perspectives.T

70、hink beyond the obvious impact.The impact of generative AI on family businesses will be felt well beyond operations and the business model.Consider and plan for how it will affect family investments,wealth management,succession planning and long-term strategic decisions.20Global NextGen Survey 2024N

71、ext steps for the next generation Strike the right balance.Finding the balance among respect,continuity,disruption and change is key to making the business ready for the generative AI future.Your role is to challenge the status quo in a constructive and respectful manner.Seek the opportunity.Be conf

72、ident,and ask the incumbent generation how you can get involved as an intern,project member,sounding board and so on.There are many ways the company can put your skills and passion to use.Show that you care.Show your employees,co-workers and family members that you understand their hopes and concern

73、s when it comes to generative AI.This will allow you to make a better impact and avoid internal resistance when you have the opportunity to get involved in the AI transformation.21Global NextGen Survey 2024Be smart,not fastThe views of the next generation of family business leaders underscore a comp

74、elling narrative surrounding generative AI.Although adoption may currently be limited,a considerable segment of NextGen demonstrate a forward-thinking approach,indicating that they will soon make use of the technologys transformative capabilities.We are at a critical inflection point,wherein NextGen

75、 possess a unique perspective that can help shape the leadership transition process.By contributing ideas,spearheading initiatives and catalysing organisational change,they have the power to not only propel innovation but also determine the strategic trajectory of family enterprises in an era define

76、d by digital disruption.The authors would like to thank the NextGen Advisory Council and the NextGen who took part in the survey.About the NextGen SurveyPwCs Global NextGen Survey 2024 is an international market survey among next-generation members of family businesses.The goal of the survey is to g

77、et an understanding of what NextGen 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 with 917 interviews in 63 territories;the global analysis was based on survey findings between 13 November 2023 and 23 J

78、anuary 2024.2024 PwC.All rights reserved.PwC refers to the PwC network and/or one or more of its member firms,each of which is a separate legal entity.Please see for further details.This content is for general information purposes only,and should not be used as a substitute for consultation with pro

79、fessional advisors.At PwC,our purpose is to build trust in society and solve important problems.Were a network of firms in 151 countries with over 360,000 people who are committed to delivering quality in assurance,advisory and tax services.Find out more and tell us what matters to you by visiting us at .PwCs Global NextGen Survey