How Indonesian family businesses are preparing their legacy

Jakarta, 26 November 2025 – Performance among family businesses is diverging. Nearly 90% of family businesses globally, including Indonesia, agree that market competition is intense, according to PwC’s Family Business Survey 2025. 

The survey, which gathered insights from 1,325 family businesses across 62 countries and territories, including Indonesia, reveals that global megatrends are significantly impacting these businesses. Economic volatility (63% for Indonesia and 58% globally) emerged as the most pressing issue. For Indonesian family businesses, tax challenges (49%) are a major concern, whereas globally, the top issue is labour shortages and workforce challenges (47%). Interestingly, this particular issue is among the least concerning for family businesses in Indonesia.

The significance of strong leadership and the dynamics of its transition

When it comes to preparing the NextGen, Indonesian successors face a unique challenge: 43% cite resistance from senior leaders as a major barrier to leadership transition, compared to just 29% globally. This finding is in line with how 39% of our respondents perceive leadership transition as risk, greater than 27% who see it as opportunity and 34% who have a neutral view. In addition, the survey also reveals that 19% of Indonesian family businesses tend to delay succession due to prevailing uncertainties, higher than global (10%). Despite this, boards in Indonesia tend to be slightly more open to younger perspectives, with 55% having a leader below the age of 40, significantly higher than the global figure of 41%. Gender diversity in Indonesian family business leadership is also showing positive signs, with 70% of Indonesian family businesses having women on their boards, compared to the global figure of 68%. 

Amid economic volatility, agility and adaptation to change are essential for a family business to thrive. When asked about the most important enabling factors for family businesses to adapt, the research indicates that strong leadership and effective governance structures are the primary contributors to a family business's ability to implement change, with 54% of family businesses from both global and Indonesia highlighting these factors.

Marcel Irawan, PwC Indonesia Private Leader, commented, “In our 12th edition of the Global Family Business Survey, we surveyed 1,325 family businesses globally, including 67 from Indonesia. Growth expectations among Indonesian family businesses now mirror the global outlook: the era of double-digit revenue growth is behind us. Closer to home, 43% told us the older generation is the main bottleneck to succession. There are bright spots and watchouts: 55% of organisations have a leader under 40, bringing fresh perspectives, and 70% include women on their boards. Yet only 25% of family businesses consider themselves agile (compared to 45% globally), and 60% still see AI more as a risk than an opportunity. This condition brings a challenge for the NextGen leaders to be bold, agile, and able to navigate uncertainty. Such readiness won’t happen on its own; it demands deliberate preparation, structured succession planning, and coaching.”

Agile and purpose-driven family businesses outperform their peers

The survey findings underscore that agility is a key differentiator. Family businesses that reported greater agility in navigating market shifts, customer demands, and operational challenges over the past year were significantly more likely to achieve strong commercial outcomes. In Indonesia, 48% of family businesses consider themselves “moderately agile,” slightly higher than the global average of 44%. In Indonesia, this agility is most evident in product or service innovation (82%), followed by strategic partnerships (71%) and technology adoption (53%). 

 In addition to agility, a clearly defined company purpose can serve as a source of competitive advantage. Indonesian family businesses show stronger confidence in having defined codes of conduct (72% vs. global 64%) and codified values (69% vs. global 64%). However, they lag behind the global average in having a clear set of family values (78% vs. 83%), suggesting that while operational clarity is improving, the strategic articulation of family identity remains less robust.

Nevertheless, even agile and purpose-driven family businesses are not immune to internal pressures. In Indonesia, 48% of family businesses, higher than the global average of 35%, report taking an incremental approach to change, while maintaining familiar management styles and decision-making processes. In terms of management styles, nearly half (48%) also experience conflict from time to time, with 19% admitting such tensions are often ignored, significantly more than the global average of 7%. Despite occasional conflict, family-owned businesses in Indonesia report unique strengths: 51% cite strong loyalty among family members and long-standing relationships built over generations, both slightly above the global average of 48%. These bonds often help sustain the business through challenges and transitions.

Balancing progress and risk, family businesses in the age of AI

Family businesses are increasingly turning their attention to new growth opportunities. Reflecting global trends, Indonesian businesses also view technological advancements and digital transformation as top priorities, with more than half (both 55%) identifying these as critical areas, particularly among mid-sized firms that are scaling up. 

Interestingly, 61% of global businesses have already identified AI as a key growth driver, recognising its potential to enhance customer engagement and drive improvements. However, this perspective is not widely shared among Indonesian family businesses, where 60% view AI as a risk, on par with other major concerns such as economic conditions, including inflation and recession. Integrating AI might disrupt existing business models, workflows or staff roles, which can be seen as a threat, especially in family firms with long-standing practices. However, having a clear policy on data privacy, ethical AI practices, and transparency will build trust among the family members and professional management level. By taking a thoughtful, step-by-step approach, family businesses can reduce perceived risks and realise the strategic advantages AI offers for growth and resilience.

Market volatility sees family businesses veer to the side of caution – even as agile firms outperform 

In response to macroeconomic shocks, many family businesses are prioritising steady-growth strategies that reinforce their long-term objectives. These include safeguarding the business as a family asset (75% in Indonesia versus 78% globally) and preserving the family legacy (73% in Indonesia versus 77% globally). This focus on continuity is also reflected in wealth management practices: one in four Indonesian family businesses (27%) already has a family office in place, a figure slightly below the global average of 33%. Among these, the vast majority of Indonesian family businesses (72%) operate a single-family office model, compared to 67% globally, underscoring a strong preference for maintaining control and confidentiality when managing family wealth. Interestingly, Indonesian family businesses show a stronger inclination towards creating dividends for family members (70% compared to 68% globally) and providing employment opportunities for family members (31% compared to 27% globally). Reputation is also seen as essential by the majority of family businesses, with 69% of Indonesian businesses saying it is very important, although slightly lower than the global figure of 78%. Additionally, 43% of Indonesian family businesses cite negative media coverage as the greatest risk to their reputation, aligning with global concerns (40%).

Unlocking growth in a volatile climate 

To grow with confidence, PwC research points to four areas of focus that set top performers apart:

• Scaling your purpose. Clear and codified purpose is behind a range of growth-driving capabilities.

• Embracing your structural agility. High-performing family businesses are actively leaning into their centralised decision-making.

• Putting your “long-term capital” to work. In an era of macroeconomic uncertainty and geopolitical volatility, patient capital is proving to be a growth engine.

• Protecting and activating your reputation. For family businesses, reputation is both a legacy to protect and a lever to activate growth.

Jonathan Flack, PwC US Global Private Leader, commented, “Long seen as more resilient than listed peers, many family businesses are now under mounting pressure. Shifting trade policies, supply chain uncertainty, and market volatility are seeing family businesses veer on the side of caution, prioritising reputation and legacy. While growth remains robust, the percentage achieving historic double-digit growth has fallen. Few businesses are immune to such external shocks, but family businesses that are agile and purpose-driven continue to outperform their peers, highlighting important strategic takeaways for businesses at-large. But the pace of re-invention remains slow. As new and emerging technologies transform the global economy, businesses must be prioritising agility, innovation and their digital and AI transformation programmes if they are to remain agile and unlock new avenues for growth.” 

Marcel Irawan added “In today’s climate of uncertainty, family businesses must embrace agility not just in operations, but in mindset. Transformation doesn’t always mean radical change; it means being open to new possibilities, investing in digital capabilities, and aligning purpose with long-term value creation. The businesses that thrive will be those that act with clarity, courage, and commitment to their legacy.”