Addressing the $68 Trillion SME Succession Crisis with AI

The global economy is on the cusp of a significant transformation as the baby boomer generation retires, leaving millions of small and medium-sized enterprises (SMEs) without clear succession plans. AVARY GROUP has launched an AI-driven ecosystem to tackle this $68 trillion crisis, aiming to preserve businesses and jobs through enhanced human collaboration and strategic mergers and acquisitions (M&A).

The Global Scale of the Succession Crisis

The SME succession crisis is a pressing issue worldwide, with significant implications for major economies such as the United States, China, and Japan. Each of these countries faces unique challenges due to demographic shifts and cultural factors affecting business transitions.

United States

In the United States, baby boomers own approximately 2.34 million small businesses, employing more than 25 million people.

As these owners approach retirement, the lack of succession planning poses a serious risk to the economy. More than 40% of small businesses are owned by baby boomers, yet nearly 60% do not have a succession plan in place.

This "Silver Tsunami" threatens to disrupt local economies as businesses close or are sold to non-local owners, potentially leading to job losses and reduced economic activity.

China

China is experiencing a similar crisis, with about three million family businesses facing succession challenges. Family-run enterprises account for a significant portion of China's private sector, contributing to two-thirds of total output. The challenge is particularly acute because many of these businesses were established during China's economic reforms in the 1980s and are now at a critical juncture as their founders retire.

Only about 8% of family companies have successfully transitioned leadership to the next generation, highlighting the difficulty of succession in China's rapidly evolving economic landscape.

Japan

Japan's business sector is also grappling with an ageing leadership crisis. The average age of Japanese business leaders has steadily increased over the past three decades, reaching 60.5 years in 2023.

This demographic trend poses significant obstacles to leadership succession, with only 3.8% of positions successfully transitioned last year. The situation is exacerbated by cultural practices that traditionally favor family succession but face challenges due to modern societal changes.

Without effective succession planning, Japan risks losing millions of jobs and significant economic output by 2025.

AVARY GROUP's Innovative Approach

AVARY GROUP's solution leverages artificial intelligence (AI) to integrate into both pre- and post-acquisition processes. This approach ensures that acquired businesses not only survive but thrive under new leadership. AI tools are used to automate routine tasks and provide real-time insights, empowering SMEs to focus on growth and sustainability. By doing so, AVARY GROUP aims to preserve business legacies while securing jobs and supporting local economies.

The Role of AI in Succession Planning

AI plays a pivotal role in revolutionizing succession planning by enhancing decision-making processes and improving efficiency. It helps organizations streamline talent management by identifying high-potential employees, predicting future performance, and creating personalized career development plans. Companies like PepsiCo and Coca-Cola have successfully implemented AI-powered succession planning tools to ensure a robust leadership pipeline. AI's ability to analyze vast amounts of data allows it to uncover hidden talent within organizations, providing a more objective and data-driven approach to identifying future leaders. This not only enhances productivity but also safeguards employee well-being and job security.

A Call for Visionary Investors

AVARY GROUP is actively seeking investors who share their vision of sustainable growth and legacy preservation. With a strong pipeline of acquisition deals ready for execution, they are poised to scale rapidly with the right funding partners. This initiative offers investors a unique opportunity to contribute to a sustainable future while participating in a growing market. By addressing the SME succession crisis with innovative AI-driven solutions, AVARY GROUP is laying the foundation for a sustainable and thriving future. Their commitment to preserving business legacies and securing jobs demonstrates the potential for AI to be a force for good in the business world.