Young members in family businesses across Africa believe they can drive digital transformation measures in their companies, but are not given the reins to do so by the older generation that remains in control. This is according to a new PwC analysis of family businesses on the continent.
Family businesses are a crucial component of economies across Africa, occupying a significant share of the small and medium enterprises (SME) sector that is set to drive economic growth across the continent. What is crucial at this point is that these businesses evolve to remain competitive.
PwC research from last year specific to Kenya revealed that family businesses in the country were facing stiff competition from the surge of international investment that has manifested in the East African growth center. These businesses are under threat of being edged out by firms with global resources.
Digitalising is a key way to maintain competitiveness, given its role in shedding costs and improving efficiency. According to PwC, younger members of family businesses perceive themselves as ‘agents of change’ concerning digitalisation, but feel shackled by those in charge.
While more than 71% of the youth appear to be actively engaged in the business, less than 40% report being given the reins for any projects or initiatives, the youth meanwhile, have concrete ideas of where they can help, with most reporting that they can develop digital strategies, while others report that they can attract digital talent and upskill staff.
Commenting on the scenario, Associate Director at PwC South Africa Business Division Jenni Kitching said, “NextGens in Africa are extremely confident – they understand the skills the family business most needs and believe they have what it takes to succeed at the top level. This powerful self-assurance may well be what is leading to disappointment and frustration among NextGens as they struggle to convince the current generation of business leaders that they have what it takes to succeed at the top level.”
“Advances in technology and innovation are disrupting businesses across all industries, with the result that digital transformation has become necessary. All companies will need agents of change. Based on our survey findings NextGens are prepared to take on this challenge,” she added.