THE NEXT STEP: INNOVATE OR BUST, THE CHINESE- INDONESIAN SUCCESSION CHALLENGE IN FAMILY BUSINESS

Abstract

This paper explores and explains how the ethnic Chinese in Indonesia (Chinese Indonesians)
undertake innovativeness in their family-owned small-and-medium enterprises (SMEs) during
intra-family succession from a socioemotional wealth (SEW) perspective. SMEs play a major
role in the Indonesian economy as they provide about 97% of the country’s employment and
make up around 57.8% of the GDP. According to the World Economic Forum (2016),
Indonesia is home to the largest number of Chinese (7.67 million) outside of the People’s
Republic of China, where they make up 3.5% of the Indonesian population and are also known
to contribute 70% to the country’s economy. Hence the transgenerational entrepreneurship of
this ethnic group is essential for the growth of the nation’s economy. Based on source
triangulation, we employed in-depth interviews and observations of the incumbents and
successors in each case of family business. Findings indicate how incumbents and successors
can undertake their distinctive roles- based on non-economic/affective endowments- to acquire
innovativeness as they secure family business succession.