Multi-generational family-owned businesses are often built on reputation and relationships. Today, the rise of generative artificial intelligence presents both challenges and opportunities for family-owned businesses that have long sought ways to maintain their values and succession goals while evolving with the times.
To better understand how family businesses can adapt to AI, Verbit analyzed data from PwC's Global NextGen Survey 2024. Respondents were the next generation members of family businesses (referred to as “NextGen”) and all worked for companies with revenues of over $500 million. Survey respondents included third and fourth generation leaders of family conglomerates across a range of industries, including retail, hospitality and manufacturing.
A family business is an enterprise that is owned by multiple family members and has been run for several generations. Many members often hold shares in the company, and their approaches vary widely based on geographic and cultural differences, regulatory environments, and interpersonal dynamics. It is worth noting that many of the world's largest companies are family-owned businesses, including Walmart, LVMH, LG Group, and Mars, Inc.
PwC research found that while corporate-owned businesses are rapidly adopting AI tools in their operations, family businesses, which account for about one-seventh of the world's gross domestic product and provide employment to about 60% of the global workforce, are lagging behind in adopting AI despite the enthusiasm of the next generation.
Nearly half of family businesses have not yet considered AI or have ruled it out for now: In the survey, only 12% of NextGen leaders said they are currently actively working with generative AI, and only 7% of family businesses said they have implemented it.
Generative AI, which can create images, text, code, and other forms of content, has opened up new opportunities across industries. GitHub Copilot's ability to help programmers generate code and Boost.ai's ability to automate customer support through AI-powered chat are just two of the countless AI tools businesses are using to increase productivity, efficiency, innovation, and growth.
