The succession shift : fostering entrepreneurial innovation for future success

Abstract

This research investigates the importance of entrepreneurial innovation in the complex intergenerational succession process within family-owned enterprises in Malta, where family businesses constitute 75% of all enterprises and are a very important part of the economy. Unfortunately, only 30% of these businesses survive into the second generation鈥攁nd fewer than 10% survive into the third generation. Building on this sustainability challenge, the research aims to explore how successors can sustain or even develop innovation within the firm during the succession process, thereby contributing to long-term sustainability. Using semi-structured interviews as a qualitative method, the study identified several barriers to innovation, including psychological attachment to their predecessors, ineffective knowledge-sharing mechanisms, and reluctance to adopt new technologies. It also shed light on some of the success factors, which included structured succession planning, governance frameworks, and the active engagement of successors in formulating innovative strategies. Results indicate that successors who can look to their family traditions for inspiration while embracing the challenges of innovation, and engaging with market forces are more likely to achieve sustainable growth. Shedding light on a vital aspect within family-owned enterprises, the research results highlight how the transmission of entrepreneurial innovation serves as an integral component of long-term resilience and sustainability through succession.