The Challenge

As the cornerstone of South Australia’s economy, how can we ensure that family businesses survive? 

In a state of approximately 85,000 businesses, it is estimated that there are more than 50,000 family businesses in South Australia, which employ an estimated 55% of the private sector workforce.

These businesses face unique challenges such as managing complex family relationships; working towards generational succession that respects both family needs and business realities; and maximising the commitment and capability of the next generation.

Family business in South Australia will face particular challenges in the coming decade, as the current generation of family business leaders are heading towards retirement age, and there is limited time for succession planning.

Crucially, some 60% of family businesses are projected to change ownership (or exit) before 2017. How will the business will be sucessfully transferred? Is the next generation available or willing to take over? Current trends show that as few as 32% of family businesses survive to a second generation, and only 13% survive to a third generation.

The future success, or failure, of these businesses will impact the State’s economic growth, business investment, unemployment, business expenditure and workforce development and training.

Dr Jaffe’s residency focused on developing a rich picture of the current climate and challenges facing family business in South Australia. Dennis met with over 100 family businesses, and conducted workshops with business networks, the Riverland Regional Development Board, Business Enterprise centres, programs for at risk youth and Universities. In developing his research, he was briefed by Government departments and held a series of roundtable discussions and small group meetings across the State with wide ranging groups including the Office of Youth A Team.

Dr Dennis Jaffe was in residence from June to August 2007.