Family businesses in China might not be as old as their western counterparts – Chinese family firms are just nine years old on average – but there is plenty of opportunity for next-gens to learn from founding family members.
Tony Gao Hao, director of executive education at Tsinghua Alumni Association, part of the Tsinghua University, reckons that despite numerous challenges in the Asian country, family businesses in China are powering ahead.
“Although the first tide of family businesses began only between 1992 and 1997, more than 85% of private companies in China today are family-controlled businesses,” he said during a family business forum organised by Swiss-based business school IMD last week.
Despite recent research showing that only 35% of second-generation individuals want to carry on their family’s business, Hao said there is a lot to learn from the first-generation entrepreneurs.
“It is important to remember the four Ss that best describe the company founders – they are strong-minded, street-smart, study hard and comparable to superman,” he said.
While higher education abroad has its benefits, it does not give next-gens enough experience and exposure to deal with the Chinese business climate, said Hao, who is also involved with an IMD programme on Chinese family businesses.
“Courses on finance and communication give them extra skills, but at the same time, next-gens often don’t realise the value and the importance of their wealth. They can understand this from the founder,” he added.
Chinese family businesses today employ about 75% of the country’s workforce and account for 60% of Chinese gross domestic product.