PwC: Africa NextGen Survey 2024

Africa’s next generation of family business leaders must embrace AI-driven innovation to remain globally competitive.

By PwC

Africa’s next generation of family business leaders must embrace AI-driven innovation to remain globally competitive.

PwC’s survey of NextGen business leaders across Africa indicates that many perceive GenAI not merely as a technological instrument but as a catalyst for enduring growth and resilience.

Family enterprises have been the cornerstone of Africa's economy, distinguished by their resilience, adaptability and the distinctive fusion of a personal touch with professional management. Yet, as we approach the threshold of the Fourth Industrial Revolution, it becomes crucial for these businesses to adopt the digital advancements that artificial intelligence (AI) offers. Generative AI (GenAI) represents not just a technological evolution, but a fundamental shift poised to transform family business operations, competitive dynamics and success in the global market.

To keep their family businesses competitive, Africa’s Next Generation (NextGen) of leaders must embrace AI-driven innovation. In our newly launched PwC Africa NextGen Survey 2024 we examine the transformative power of GenAI in family businesses across Africa. The goal of the survey is to get an understanding of what the next generation of business leaders in Africa is thinking about regarding key issues today, as well as what role they are playing and what roles they think they should play in their family businesses.

In this year's report, as we explore the confluence of tradition and innovation, we provide a lucid perspective on how family enterprises are assimilating advanced technologies into their operations to stay pertinent and robust. Our insights indicate a notable transition with the next generation of family business leaders emerging. These forward-thinking individuals perceive GenAI not merely as a technological instrument but as a catalyst for enduring growth and resilience. We conducted a survey with NextGen leaders focusing on five critical domains:

• Success and succession in an AI world

• Turbocharging innovation in family businesses

• Protecting trust in an AI-driven world

• Maximising NextGen’s contribution

• Being smart, not fast

These are some of the key findings in these areas:

For every family business, the reins are set to pass into the hands of a new generation of leaders at some point. This moment does not only mark a change in leadership, but a strategic shift towards harnessing a fundamental new technology within family-run and -owned businesses.

“For those that get it right, GenAI will shape future success, and we believe that the next generation of family business leaders hold the key to this transformation,” says Esiri Agbeyi | PwC Africa Family Business Leader.

Our survey shows that 77% of NextGen in Africa believe that GenAI is a powerful force for transformation, but many question the ability of their family business to capitalise on it. While more than 75% of Africa NextGen believe that AI is a powerful force for business transformation, they are rightly concerned about the ability of their family business to withstand the disruption of GenAI and to capitalise on its opportunities. We found that family businesses—which typically approach innovation more cautiously than publicly listed companies—find themselves in a precarious position.

“Almost half of African family businesses (53% vs 49% globally) have either prohibited or not yet started to explore AI, and only 4% (7% globally) have implemented it somewhere in the business,” notes Agbeyi.

“Family businesses in Africa are clearly more reluctant to implement AI in contrast to their global counterparts. In comparison, 32% of global CEOs say they have already implemented AI in their business, and 31% of global CEOs say they have changed their technology strategy as a result of AI.”

Leaning into these newer approaches requires trust, and in today’s operating environment, trust in business and in technology are inextricably linked. Globally, CEOs associate GenAI with various risks. In Africa, NextGen view this similarly, but are however slightly less hesitant. Many say they understand the importance of implementing GenAI carefully, which is indicative as 57% (50% globally) believe there is an opportunity for family businesses to lead the way on the responsible use of AI and other technology.

“Africa NextGens recognise their significance in an AI-driven world. Our survey indicates that an average of 54% (40% globally, 77% in Nigeria, 50% in South Africa) are of the opinion that embracing AI will elevate them into a competitive leading role. However, this is more than a golden opportunity for NextGen to carve out an important role in the business, but rather, it’s also crucial to acknowledge that the legacy of family businesses is at stake,” says Duncan Adriaans | PwC Africa Private Leader.

Only 15% (14% globally) of Africa family businesses currently have a team or person in the company who is directly responsible for GenAI—often the head of IT. The likelihood of such a position existing increases in larger and more mature companies. So far, NextGen have not been closely involved, with only 13% (12% globally) already engaged in AI—however, a further 61% (58% globally) say they are likely to be engaged in GenAI discussions in the future.

“The journey towards AI integration is not without its challenges. It requires a strategic vision, a willingness to invest in new technologies, workforce transformation and most importantly, a mindset shift. The next generation of family business leaders must be at the forefront of this transformation. They are the digital natives, the innovators and the visionaries who will harness the power of AI to propel their family businesses into a new era of success,” adds Agbeyi..

Download the Africa NextGen Survey 2024 here