Dark Shadows from the Kiku no Sekku
A recent Financial Times states that hundreds of thousands of small and medium Japanese family firms could disappear for lack of successors. Some private equity funds are trying to exploit this brokering between sellers and buyers, but the impact will be minimal. A few years ago, Prof. Goto, the standard-bearer of longevity studies in family businesses, had already warned of this serious risk for Japanese family firms.
Adult adoption, which is used in Japan to choose the ideal successor outside the biological family, is a suitable tool for big groups. In fact large companies have a pool of professional managers and non-family directors from which they can select non-family successors. This is not the case for small and medium family firms.
What are the causes of this phenomenon? The first and biggest one is the demographic situation. Entrepreneurs who are over seventy cannot easily find a non-family successor in the super-ageing society. Youngsters, both within and outside entrepreneur families, are the only hope for societies and economies. And Japan lacks young people. And in Switzerland? Japan is an island and this exacerbates the phenomenon, as immigration is virtually non-existent.
Today, Switzerland as many other European countries, is tempted by insularity. This is an evil trend for our family firms.