UK family businesses more bullish on growth than global peers

●      While the proportion of UK family businesses expecting growth in the next two years (79%) is lower than in 2023 and 2021 (80% and 86% respectively), UK confidence outstrips the global average (73%)

●      Economic volatility (63%), workforce challenges (66%) and regulatory and policy changes (66%) are the main perceived risks, with technological advancements, digital transformation and AI (all 55%) seen as biggest opportunities

●      Two thirds (69%) respond to market and industry disruption by erring on the side of caution, either making incremental changes or selectively experimenting

UK family businesses are more confident in their ambitions for growth than the global average, according to the 12^th PwC global Family Business Survey. 79% of respondents to the survey indicated they expect to grow in the next two years, 16% of whom expect to grow quickly and aggressively. In comparison, 73% of global respondents expect growth over the same period.

Businesses based in the UK were also more likely to have experienced growth in the last year: 68% had achieved growth in the last financial year – 9% above the global average.

The survey, which interviewed 1,325 family businesses across 62 countries and territories was conducted in collaboration with the John L. Ward Center for Family Enterprises at Northwestern University’s Kellogg School of Management in the United States.

In response to market disruption or industry changes, UK family businesses are likely to avoid risk, with 37% taking a cautious approach, sticking to familiar decision-making processes and 32% experimenting selectively with new approaches in certain areas while maintaining stability in others. While a cautious approach suits many right now, 68% of family business leaders are confident their decision-making agility helps their organisations to adapt to change.

When asked which global megatrends had the most impact on their family businesses over the last year, UK respondents pointed to economic volatility (68%), workforce challenges (45%) and geopolitical issues (42%). 74% singled out tax challenges, more than double the global average.

Opportunities for growth

The survey also gathered views on the areas of opportunity and risk for private businesses. In the UK, 55% of respondents regard technological advancements, digital transformation and automation and AI as the greatest areas of opportunity, and economic conditions, regulation, supply chain and the battle for talent as the greatest risks. Tellingly, when measured against their global peers, UK respondents were more likely to see these factors as risks, rather than opportunities.

“Given the responsibility to hand down a healthy, competitive business to younger family members, it’s understandable to see a degree of caution as family business leaders consider the future shape of their companies.

“One of the key advantages of family businesses is their strong, centralised leadership and agility in the face of external change. Our survey highlights the continued importance of that adaptability, with the potential of technology, digital transformation and AI as levers for growth and ongoing success.”

Agile and purpose-driven family business firms outperform their peers

There is also a powerful link between purpose and core enablers of sustainable performance. Globally, businesses with a clearly articulated purpose are twice as likely to pursue aggressive growth (18% v 9%), and significantly more likely to prioritise innovation (23% v 16%) and long-term goals (35% v 26%). A third (33%) actively foster a culture of experimentation and innovation, compared to just 24% of the total sample.

AI seen as top growth priority

As family businesses contend with navigating a challenging macroeconomic landscape, they are also looking for new growth opportunities. Globally, just over three-fifths (61%) cited experimentation with AI as a growth opportunity. In roundtables with family business leaders, some noted enhanced customer engagement and improvements in their dynamic pricing response times, even though they made relatively modest capital investments in GenAI deployment.

They are also seeing output from AI -- while around one-third of CEOs from non-family businesses report increased revenue (29%) and profitability (32%) from GenAI, the returns among public family businesses are markedly stronger. According to family business data in PwC’s 28^th Annual Global CEO Survey, nearly half (46%) of these firms report that GenAI has boosted both revenue and profitability.

New and emerging technologies are key priorities – with technological advancements and digital transformation the top priorities for nearly two-thirds (65% and 64% respectively), particularly for mid-sized firms that are scaling up.