The multi-generational family business model in Asia is expected to change, with 69% of younger business owners in Hong Kong believing in fewer family owned businesses in the future, according to a survey by Sun Life Financial.
The study gathered responses from 1,378 business owners across Indonesia, Hong Kong, Malaysia, the Philippines, Singapore and Vietnam.
In Hong Kong, younger business owners believe that in the future professional managers from outside the family will be put in charge in future.
Only 3% of Hong Kong mature business owners, the lowest among six markets surveyed, said the same.
However, nearly 60% of Hong Kong owners also cited advantages of the family business model such as good relationships with customers and stakeholders, as well as uniformity of purpose and mission.
Majority also opined that family businesses will become more competitive and offer more innovations in the days ahead.
Approximately 60% of startup and growth business owners also opined that more founders will prefer to sell businesses prior to their retirement instead of transferring it to their next generation.
Just 6% of mature business owners cited the same.
Most of the mature business owners are looking to pass the business on to their next generation. However, majority of mature business owners do not take external advice for this.
In Hong Kong, the top succession planning priority for all business owners include the survival and continuity of the company and preserving the founder’s legacy and reputation.
Sun Life Asia president Leo Grepin said: “Family businesses are the foundation of Asia’s economies. There remain many advantages to running a family business in Asia. But the younger generation of business owners are thinking differently about the future of their business.
“They prefer to build fast, sell and retire early, rather than pass it on to family as has been favoured in the past. The COVID-19 pandemic has also created serious challenges for businesses that further complicates retirement and succession planning.”