Core Insights - Over 90% of Japan's century-old enterprises are family-owned, playing a crucial role in traditional industries and employment solutions, including globally influential groups like Toyota and Suntory [1] - A generational succession crisis is emerging across family businesses in Japan, affecting both small and large enterprises, with structural and nationwide trends [1][2] - Recent scandals have raised significant doubts about the family business model in Japan, highlighting issues of internal governance and external oversight [1] Group 1: Succession Crisis - A recent survey indicates that 52.1% of family businesses in Japan will face succession issues post-2024, with approximately 142,000 companies currently lacking successors [2] - Regional disparities in succession challenges are evident, with Mie Prefecture at 34.1% and Akita Prefecture at 72.3% for businesses without successors [2] - The younger generation's reluctance to inherit family businesses is a primary cause of the succession crisis, with 68% of successors expressing disinterest due to perceived hardships and instability [2] Group 2: Economic and Structural Changes - The highest inheritance tax in Japan can reach 55%, creating significant financial pressure on family businesses and leading many to cease operations or sell [2] - The lack of experienced managerial talent exacerbates the crisis, as Japan faces a long-term shortage of qualified successors, impacting both large and local enterprises [2] - Over 65% of mergers and acquisitions in Japan are directly related to succession issues, with private equity firms increasingly targeting the Japanese market [2] Group 3: Shifts in Succession Models - The structure of business succession is evolving, with "internal promotion succession" projected to reach 36.4% in 2024, surpassing family-based succession for the first time [3] - There is a growing societal demand for businesses to not only have successors but also to ensure their ongoing development [3] - The government is enhancing succession guidance and support networks, while financial institutions are working to cultivate a market for external professional managers to address talent shortages [3]