Family businesses in Singapore lagging in digital transformation: poll

FAMILY businesses in Singapore are lagging behind in digitalisation efforts, both in the region and around the world, according to a survey by PwC published on Wednesday.

Of more than 2,800 family businesses surveyed globally, 80 of which were Singaporean, only 29 per cent in Singapore were confident of their digital capabilities, as compared to 38 per cent globally and 33 per cent in the Asia-Pacific.

Ng Siew Quan, Asia-Pacific leader, Entrepreneurial and Private Business, PwC Singapore, said this was likely due to high costs of implementation, inadequate internal digital infrastructure and a skill shortage among family businesses in Singapore.

"Despite digital being on the business agenda in recent years, it is a concern that Singapore family businesses still lag behind the digital curve," said Mr Ng.

He suggested that family businesses can tap fresh perspectives from the next generation of leaders to develop a sustainable digital transformation strategy, or one that is fit for the digital age.

This is supported by the finding that nearly four in 10 family businesses that described themselves as digitally strong were in the third or fourth generation. Next generation leaders were also found to have stepped up their responsibilities in almost half of the businesses that were digitally strong.

However, while 90 per cent of family businesses in Singapore said they were optimistic on growth for 2022, up from 64 per cent in 2021, sustainability concerns remained the last of their priorities. The study found that only 25 per cent of family businesses in Singapore were prioritising green efforts, as compared to the 30 per cent in the Asia-Pacific and more than half in the UK.

PwC believes this comes as most businesses are still in the midst of protecting their core business during the Covid-19 disruption.

Further, the survey also highlighted a concern that family businesses were less than prepared to pass on the business to future generations, with only slightly more than a quarter having documented a succession plan.

"The survey results this year aren't very different from the findings in the previous years. Perhaps that's worth noting, as it does indicate that family businesses aren't thinking much differently despite the world of business being set upside down by the pandemic," said Mr Ng, adding that more needs to be done to prioritise sustainability efforts even as the businesses diversify, expand and digitalise.