PwC argues that as family businesses undergo leadership succession, they face a significant transformation driven by generative artificial intelligence (GenAI). This shift is not only about personnel changes but about adopting a technology that should be integrated across the enterprise.
Who are NextGen and why do they matter?
PwC uses the term NextGen to describe family‑business family members aged roughly 18 to the early 40s who aim to become responsible owners, influential board members, or visionary leaders. PwC’s Global NextGen Survey 2024 gathered 917 responses across 63 territories between 13 November 2023 and 23 January 2024. The findings show NextGen respondents are notably more optimistic about generative AI than the incumbent generation and advocate moving AI responsibility out of siloed functions toward firm‑wide adoption.
Key findings and figures
- More than 70% of NextGen consider AI a powerful force for business transformation, but many doubt their family business is ready to withstand disruption and seize AI opportunities.
- Currently, 49% of family businesses have either prohibited AI or not yet begun exploring it, and only 7% have implemented AI anywhere in the business.
- By contrast, 32% of all CEOs report they have already implemented AI in their business, and 31% say they changed their technology strategy because of AI (PwC Global CEO Survey 2024).
- Half of NextGen believe family businesses have the chance to lead on the responsible use of AI and related technologies.
- Only 6% of family businesses have defined governance for responsible AI use; another 62% say they should but have not yet established it.
- Just 12% of businesses have provided training for management and employees on AI risks and opportunities.
Why the timing is critical
Family businesses account for a substantial share of the global economy: according to PwC, they contribute about 70% of global GDP and employ roughly 60% of the world’s workforce. Given that scale, a failure to act on generative AI risks more than a single firm’s competitiveness. PwC warns that companies must also evaluate the consequences of inaction: delays can erode time‑to‑market, profitability and resilience.
Recommended actions: innovation, trust and succession
PwC highlights three priority areas—innovation, trust and succession—with practical steps:
- Assess generative AI now: evaluate direct and indirect positive and negative impacts, and the cost of doing nothing.
- Make AI a board‑level strategic discussion: implementation should be a strategic debate, not only an operational or IT issue.
- Pay attention to timing and communication: ownership competence, governance and clear leadership are essential to maintain trust and reduce internal resistance.
- Encourage dialogue: NextGen should raise questions with incumbent leaders; both generations benefit from open conversations.
- Start pilot projects: low‑risk, high‑return pilots let the organisation learn and let NextGen develop skills.
- Decide resource allocation: be clear whether AI investment targets operational transformation or new ventures (or both).
- Align family values and governance: ensure AI adoption fits family values, business purpose and board composition.
Managing risk and preserving trust
Global CEOs cite risks such as cybersecurity threats and biased outcomes from GenAI; family‑business CEOs express similar concerns. NextGen are generally less worried, which may mean they underestimate risks or are simply more tech‑savvy. PwC urges conscious, responsible adoption—strong governance, oversight, and transparent communication—to protect the trust that family businesses typically enjoy.
NextGen’s role and opportunities
Forty percent of NextGen say that being an AI champion will help them move into leadership roles. Yet today only 12% are actively involved in AI initiatives; another 58% expect to be involved in future GenAI discussions. PwC warns that underutilising NextGen’s potential risks the business, governance and family dynamics.
Practical steps for NextGen and boards include:
- Involve NextGen in pilot programmes to build firm‑wide AI capability and support succession.
- Use NextGen’s technological fluency to complement experienced board members; invite them to meetings as guests so they can learn and contribute.
- Think beyond operations: consider AI’s impact on investments, wealth management, succession planning and long‑term strategy.
- Balance respect for continuity with constructive challenge: engage as interns, project members or sounding boards to put skills to work.
- Communicate empathy: show employees and family members you understand their hopes and concerns around GenAI to reduce resistance.
Conclusion
PwC’s Global NextGen Survey 2024 suggests family businesses are at an inflection point. Although adoption of generative AI is currently limited, a substantial segment of NextGen demonstrates forward‑looking attitudes that could steer leadership transitions and corporate strategy. By involving NextGen, strengthening governance and launching pilot projects, family businesses can pursue responsible AI adoption to preserve trust and secure long‑term competitiveness.
Basis: PwC Global NextGen Survey 2024 (917 interviews in 63 territories; fieldwork 13 November 2023–23 January 2024).
