Successors fear a split in society

Inheritance tax makes it difficult to continue running the family business

18 September 2023, Munich. The next generation of entrepreneurs does not lack the family’s basic entrepreneurial attitude, nor does it lack the willingness to work hard or the satisfaction that comes from taking on responsibility. But they still have a number of fears about the future.

The next generation sees the risk of political polarisation and a social divide in society as extremely high. This fear ranks even higher than climate change when it comes to fears about the future. The war in Europe is currently the most pressing issue for young people. But right after that comes the danger of a poor economic situation with increasing poverty.

This is the result of a study by the Foundation for Family Businesses entitled “Germany’s next generation of entrepreneurs 2023”. Zeppelin University has conducted this study for the sixth time. This time, Prof Reinhard Prügl and his team surveyed 440 representatives of the next generation of entrepreneurs aged between 16 and 40 across Germany. They analysed the attitudes of the successors with regard to fundamental values, personal plans and specific challenges. It is modelled on the Shell Youth Studies, whose co-director Prof Mathias Albert was even a member of the team of authors this time.

Demonised by society, barely noticed by politicians

The growing hostility between people from different social groups and with different political convictions is of particular concern to the next generation. Some of them even no longer want to be recognised as such. The research team also reports that the successors feel that their own interests are hardly recognised by the political parties.

Among the challenges they have to face, the next generation of family business owners cite inheritance tax first and foremost. High taxes make it difficult to continue running the company. Other challenges include the shortage of skilled labour and the lack of work-life balance.

New focus on sustainability and leadership culture

When asked about opportunities, the successors mentioned the ability to set new trends in the company. Sustainability plays a major role, as do new organisational structures and a different management culture.

The preparations for succession are increasingly being carried out professionally, depending on the size of the company. Compared to the last study in 2020, the process is now much more formalised. Out of 190,000 family businesses in Germany, succession will soon take place at 226 of them (according to the Institute for SME Research in Bonn). Demographics are also reducing the number of potential successors here. At the same time, the next generation can pursue a wide range of career options outside the family business.

Prof Rainer Kirchdörfer, Chairman of the Foundation for Family Businesses: “I find the fears revealed in the study alarming. These are the future representatives of the type of company that supports the German economy more than any other. They should be proud and be able to look to the future with confidence. It’s high time to rid the image of entrepreneurs of its strange clichés and ease the oppressive tax burden.”

Teaser picture: Dr. Anne-Marie Großmann © GMH Gruppe / Layout: Serviceplan

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