Singapore family businesses, traditionally perceived as resistant to change, are embracing emerging technologies for business success. A new study by The Economist Intelligence Unit, sponsored by SAP, found that Singapore family businesses are ready to utilize emerging technologies to drive business success.
These include data analytics (with a confidence score of 8.1 on a ten-point scale, ten being the most confident), automation (7.6), machine learning (7.7) and cloud computing (7.3). In a sign that they are prepared to put aside traditional business models, majority (90%) believe that they need to change at least somewhat in order to overcome challenges in the next three years.
The regional multi-country study, ‘Planning for prosperity: assessing family business future-readiness in South and South-east Asia’, assessed and benchmarked the readiness of family businesses to meet future challenges. Singapore family businesses, many now in their third generation, are also very confident about their future, particularly in collaborating with other organizations for better business outcomes, with 53% saying it is likely they will launch new products and services and 31% saying the chief benefit of partnerships with other organizations is access to new geographical markets. In addition, almost all Singapore family businesses (95%) have well-defined succession plans in place.
“Family businesses are trusted, home-grown enterprises that form an important part of the bedrock of Singapore’s private sector, and their optimistic outlook towards the future bodes well for the economy,” said Michael Gold, EIU editor of the report. “To strengthen their legacy and seize opportunities in the digitaleconomy, they cannot continue to depend solely on connections or customer loyalty. Family businesses and SMEs need to future-proof themselves with digital knowhow and innovation, in order to compete successfully in the international arena.”
Despite their bullish attitude, family businesses are cognizant about the challenges brought about by disruptors, digital start-ups and foreign competition, and the reality that no single company can dominate the market, as per previous generations. They face uncertainties in terms of talent, compared to their regional ASEAN counterparts from Malaysia, Indonesia, Thailand, and the Philippines. Singapore family businesseswere the least confident of their employees’ abilities to develop new skills, with a confidence score of 7.4 (on a ten-point scale, ten being the most confident) compared to the regional1 country average of 8.1, indicating a perceived gap in skills and talent development.
“With the increasingly globalized world and rapid pace of change in today’s digital economy, family businessesneed to become fully intelligent enterprises, and experiment with new ways of operating and delivery value for their customers, in order to level the playing field and be future-ready”, said Khor Chern Chuen, Managing Director, SAP Singapore. “To this end, they need to digitalise the core with a next-generation intelligent ERP solution across all aspects of the company, and create value and revenue streams through leveraging data via automation and machine learning.”
According to the study, family businesses in Singapore view partnerships as crucial to ensuring survivability and growth – a testament to strong entrepreneurial spirit. They are also open to collaboration with other companies to jointly develop new products/innovations (49%) and to cultivate new customer segments (39%), which drive product innovation and break into different audience segments.