Business Succession in Transition: Family Ties No Longer Sufficient in Swiss SMEs within the MEM Industry

In many companies within the MEM industry, a generational change is foreseeable in the next five to ten years. This was clearly identified by Swissmechanic, the association of Swiss MEM-SMEs, in its latest member survey: 49 percent of companies definitely expect this, with an additional 17 percent considering it likely. Despite this clear outlook, almost half have not yet addressed the issue concretely, while 28 percent are already in the midst of the process and 26 percent have taken initial steps.

The question of an internal family solution presents a mixed picture. While 33 percent are generally open to an internal transfer, it is not an option for 42 percent. The main reasons for this are different professional interests of the next generation (28 percent), as well as the lack of suitable successors (26 percent).

A Declining Topic

Swissmechanic points to a crucial risk factor for the future viability of Swiss industrial companies: the traditionally preferred internal family succession is losing significance. What was considered standard a few decades ago is becoming increasingly rare today. This change is not unique to Switzerland but is part of a global trend, and the SMEs in the MEM industry are no exception.

The biggest challenge companies face is finding suitable successors (28 percent), followed by financing and business valuation (23 percent), as well as legal and tax issues (14 percent). The association interprets these developments as an expression of the increasing complexity of entrepreneurial responsibility, particularly when it comes to the financial requirements and the wide range of competencies that today's successors must bring. While 66 percent of the companies feel very well or quite well prepared, around a quarter consider themselves rather poorly or not prepared at all. Thus, the need for support remains high.

Stop the Trend

Swissmechanic interprets the results as a distinct signal: entrepreneurship holds less value among younger generations in industrial companies than in the past. The association sees this as a challenge for the long-term competitiveness of the industry and intends to intensify efforts to stop or, where possible, reverse this trend. This is also confirmed by the expectations towards the association: 59 percent want Swissmechanic to be more actively involved in the area of succession planning. Swissmechanic will take these impulses on board and further develop its offerings accordingly.

Media Contacts

For questions and information, please contact:
- Erich Sannemann, Director of Swissmechanic, e.sannemann@swissmechanic.ch, T: +41 71 626 28 45, M: +41 79 661 44 78 (German)
- Nicola Roberto Tettamanti, President of Swissmechanic, nicola.tettamanti@tecnopinz.com, T: +41 91 946 40 70
M: +41 79 419 01 14 (Italian, French, and German)

SWISSMECHANIC
Felsenstrasse 6
8570 Weinfelden
Tel. 071 626 28 00
kommunikation@swissmechanic.ch

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