The Digital Heir: How Next-Generation Successors Experience AI- and FinTech-Enabled Succession in Family Firms (Journal of Business Insight and Innovation)

Summary

• The worldwide share of family businesses is around 80%, with only 30% making the transition from the first to the second generation and only 15% reaching the third generation.p.3
• The qualitative study investigated 8 semi-structured interviews with family business successors in Pakistan using Interpretative Phenomenological Analysis.p.5
• The participant sample comprised 4 women and 4 men, aged 25 to 39 years, with 4 to 12 years of business experience.p.5
• The studied sample included 6 second-generation and 2 third-generation successors operating across diverse economic sectors.p.5
• Each semi-structured interview lasted 47–60 minutes and focused on digital change, intergenerational authority, and legacy.p.5
• Evidence-led legitimisation allowed successors to build operational credibility through small digital pilots and measurable performance outcomes.p.8
• Governance-led integration institutionalised digital authority through written agreements, management committees, and recorded decision rights.p.8

Key insights

1. AI and FinTech act as key mechanisms through which authority, trust, continuity, and leadership identity are actively negotiated in family firm succession.p.1
2. Founder and family CEOs are less likely to adopt digital technologies compared to later-generation family members.p.2
3. Socioemotional Wealth Theory explains how non-financial social and emotional priorities drive family decision-making and shape responses to tech-driven changes.p.3
4. Dynamic Capabilities Theory highlights how next-generation leaders sense digital opportunities, convince families to implement FinTech/AI, and reconfigure operational routines.p.3
5. Small digital pilots and measurable error reductions allow successors to prove value without directly challenging the incumbent's existing authority.p.8
6. In governance-led integration, technological authority shifts from personal permission to written family management agreements and formal approval processes.p.8
7. Relationally contested recognition emerges when unclear succession roles and incumbent intervention cause political friction and intra-family rivalry.p.9
8. Digital capability development follows an authority-gated sequence where sensing depends on successor knowledge, seizing requires resource permission, and transforming relies on institutionalised authority.p.11