Singapore family businesses extra confident for coming growth

The percentage of Singapore family businesses expecting growth within the next two years is greater than that of the global figure according to a new survey.

The 10th annual Global Family Business Survey by professional services firm PwC has revealed that Singaporean family businesses remain generally buoyant for the short-term future despite the trials of the past year, with nine out of ten expecting at least steady growth within the next two years, at a rate higher than the global average. More than two thirds of those surveyed expect to be achieving growth already this year.

The positive sentiment among Singaporean family businesses is contrary to the less widespread growth achieved in the financial year prior to the pandemic locally as compared to globally (49 percent against 55 percent), as well as the heavier expected hit to sales due to Covid 19. More than half of those surveyed – 56 percent – expected a reduction in sales, compared to 46 percent globally.

Altogether though, PwC’s latest family business survey findings mirror those of its recent Global CEO survey, which revealed widespread confidence in both global economic growth and their own company’s future fortunes – marking a significant turn-around from the especially gloomy outlook expressed by ASEAN business leaders in the year prior to the pandemic. Now, almost one in five local family businesses are expecting to grow quickly and aggressively this year.

As a comparison, only 13 percent of family businesses globally and 16 percent across the Asia Pacific anticipate speedy growth this year, a trend that extends to next year – with 30 percent of Singapore family enterprises expecting speedy growth in 2022 against 21 percent globally. By next year, effectively none of the Singaporean leaders surveyed foresee a contraction, while only 3 percent expect downsizing this year, compared to 9 percent across the APAC region.

To drive growth over the coming two years, Singapore family business most commonly identified an expansion to new markets or client segments as their number one priority (noted by 73 percent compared to 55 percent globally, albeit also as the top priority), followed by “rethinking, adapting, changing” the business model. Here, the Singaporean respondents notably diverged from their counterparts, where a business model rethink was only the 5th greatest priority globally.

More congruent was the local and global priority to improve digital skills, cited by a touch over half among both groups, however Singaporean family businesses have been shown to lagging their global peers as to existing capabilities. According to the survey, only 29 percent of those in Singapore consider their digital capabilities to be strong, compared 38 around the world. Further, only 13 percent have completed their digital journey, against 19 percent globally.

“Despite digital being on the business agenda in recent years, it is a concern that Singapore family businesses still lag behind the digital curve. Key reasons for this could include the high costs of implementation, inadequate internal digital infrastructure and the skills shortage” said Ng Siew Quan, APAC Leader for Entrepreneurial & Private Business at PwC Singapore, who suggested family businesses could tap into the next generation’s fresh perspectives on digital transformation.