Current generation of entrepreneurs is less willing to hand over control of their companies to their heirs than they were before the pandemic

The current generation of entrepreneurs is less willing to hand over control of their companies to their heirs than they were before the pandemic. That is making it harder for the next generation (NextGen) to prove themselves as new leaders, according to PwC’s global NextGen Survey 2022.

Although 43 percent of the NextGen say that they feel more involved in the business than they did prior to the pandemic, only 28 percent say they are given significant internal operations to run, compared to 48 percent in our 2019 survey. In this context, 45 percent are finding it difficult to prove themselves as new leaders or board members.

“The NextGen are more engaged in the business than before the pandemic, but the challenge is to build trust between the current and next generation. This is the time to flesh out succession plans and define the leadership competencies needed to ensure future growth. The challenge for NextGen is to demonstrate that they are ready to take the reins”, said George Ureche, Director and Service Leader for Entrepreneurial Business, PwC Romania.

However, 61 percent of the current leaders say that the family has a succession plan, and 39 percent of NextGens say they were involved in its development.

Areas where NextGens say they are actively engaged include achieving business growth (59 percent), ensuring the business is offering the right products and services (50 percent), and adopting new technologies (44 percent).

PwC also recently surveyed the current generation of family business owners. While they are in agreement with NextGens in a lot of areas, there are some notable differences. Both generations are focused on growth, but only half of the current generation believe that their business has a responsibility to fight climate change and its consequences, compared to the nearly three quarters of NextGens. A similarly high percentage of NextGens (76 percent) believe that the family business actively contributes to the community, again compared to just over half (54 percent) of the current generation. A bit of a digital divide also exists between the generations. Similar percentages, 42 percent of NextGens and 38 percent of the current generation, believe that their business has strong digital capabilities, but a third of NextGens say that the current generation does not fully understand the digital opportunities and risks within their business.