Listen to this article
As per HSBC Global Private Banking’s new report titled ‘Family-owned businesses in Asia: Harmony through succession planning’, 79% of the country’s gross domestic product (GDP) is contributed by the family businesses - one of the highest ratios globally.
The report also points out that Indian family-owned businesses’ owners are optimistic about the abilities of their next generation to manage family enterprises and wealth. About 88% of Indian entrepreneurs trust the next generation’s ability to manage family wealth.
The report focuses on the preparedness of family-owned businesses in India and across Asia for the future of their enterprise and their wealth.
Here are the key findings of the report;
- Many of these family businesses were established in 1990s when the Indian economy was opened up for the world
- The second-generation entrepreneurs, often educated abroad and raised in cosmopolitan settings, bring new perspectives to the table
- 45% of surveyed entrepreneurs (55% of first-generation and 35% of multi-generation) do not expect their children taking over the family business
- 83% of respondents from multi-generational family businesses say that they felt empowered to pursue other interests when they first took over the business
- 79% of Indian entrepreneurs still plan to pass their businesses to family members (77% in the UK and 76% in Switzerland), making it the top country in the list
- Ony 44% the respondents in Hong Kong share this intention, while 56% in mainland China and 61% in Taiwan want to pass their business to the next generations
- Interestingly, 25% entrepreneurs in mainland China, 29% in Hong Kong, 27% in Taiwan and 22% entrepreneurs in Singapore are most interested in selling their businesses
Sandeep Batra, Head, International Wealth and Premier Banking, HSBC India, said, “India’s family-owned businesses are balancing legacy preservation with modernity. While there is trust in the next generation to uphold the values and culture of the family business, there is also need for open communication and robust succession planning. This proactive approach not only strengthens family bonds but also safeguards the long-term sustainability of these businesses.”
