Transformation of Thai family businesses into the AI era: Necessities and adaptation approaches for sustainability

The 6C formula for success in Thai family businesses is important for the sustainable succession of Thai family businesses, especially the 6th C, which involves change, in which family businesses must change their thinking and working methods to accommodate the emergence of Artificial Intelligence (AI) technology, which is emerging and will bring rapid changes to the business world.

The impact of AI will inevitably cause Thai family businesses to face new challenges, which may certainly present both opportunities and obstacles for Thai family businesses. Therefore, if family businesses do not change, it will be difficult for them to survive.

Transformation of family businesses is now a necessity to ensure sustainable survival and growth in the digital economy. Therefore, family business owners, both the handing over and inheriting generations, must understand AI to support business model changes. This is especially true for first-generation business owners, who may be over 1 years old, members of the Baby Boomers or Generation X generations, who are often unwilling to change their business model at the request of Gen Y or Gen Z, and may also be unwilling to learn new things.

AI, in particular, inevitably exposes family businesses to risks, which will undoubtedly impact succession. Leadership transitions often face challenges related to AI, and if the successor and successor generations fail to adapt, the business could collapse before it is passed on to the next generation.

Important information about family businesses in the era AI in Thailand

According to the 2567 survey report on new generation family businesses, titled “Business Success and Succession in the AI Era,” conducted by PWC (in June 2567), there is interesting research information as follows:

79% of new generation family business leaders in Thailand believe AI will be a major force in transforming their business, 42% believe AI will help businesses leverage emerging technologies, and 48% believe it will drive business growth, and over 61% of Thai CEOs believe AI will significantly change the way their company does business.

Another shocking piece of research is that over 55% of businesses have no action taken on AI adoption, with only 33% in the early stages and only 6% of those in the early stages having a solid understanding of AI.

For Thailand itself, the government has established a national strategy and action plan for promoting artificial intelligence for 2565-2570, which has 5 strategies: 1. AI Ethics, law and regulation 2. AI Infrastructure 3. AI Manpower 4. AI Research, Development and Innovation 5. AI applications (see details in the AI White Paper prepared by ETDA, TDRI and SAP) for business purposes to make the business sector see the potential of AI in revolutionizing the manufacturing industry, which family business owners should study.

The report found that, based on a survey, only 2% of Thai organizations in the manufacturing industry have adopted AI, 17.8% have implemented it, 73.3% are considering it, and 8.9% do not yet see the need (see AI White Paper Nov 2025 https://tdri.or.th), despite over 61% of CEOs seeing AI as having a significant impact on business transformation.

Challenges, Obstacles and Opportunities When Family Businesses Face Problems AI

The challenges and obstacles of AI in family businesses can be divided as follows:

1. Family businesses lack a shared vision and strategy in matters of AI This may be due to the traditional corporate culture of centralized, command-and-control. Therefore, changing the corporate culture of family businesses to be in line with new technologies is difficult, especially in family-run businesses where older family owners are often unwilling to change and learn new things about technology and the new digital economy.

Furthermore, they are not giving opportunities to the new generation, especially Gen Y and Gen Z, to work in this field because they may not trust their expertise and believe that investing in this field will result in a waste of money without good returns.

2. Lack of investment and development in the system AI and people Because the owners of the delivery model fear losses and do not see the benefits, and may feel that the investment is not worthwhile, focusing on short-term and too early returns, this creates a digital skills gap for the business, its employees, and executives, resulting in these personnel all lacking digital and AI skills. A TDRI survey found that both business owners, executives, and employees have little knowledge of AI. Approximately 42-28% of companies, with owners having little knowledge of 30% and no knowledge at all, up to 25%.
3. Resistance from the first generation or the handover generation of leaders Lack of understanding of the impact of AI on their business leads to delayed decision making, whether in terms of adapting to learning about AI.
4. Lack of communication of the importance of AI Among business owners, heirs and executives on the importance, benefits and impact of AI on their family businesses.
5. Lack of understanding about the application (Application) and the importance of strategy make it difficult to see the picture of investment and return on investment (ROI), especially SMEs that do not have enough information to invest in AI and do not know the benefits of using AI clearly.

Opportunity from AI

To address the above challenges, family business owners should consider how AI can create opportunities for their business. Consider the following:

1. By collecting and analyzing family business finance and operations data, family members can verify the data with transparency, speed, and accuracy, reducing conflicts over various benefits. Furthermore, AI can be used to communicate new information to family members, including easily learning about new business opportunities. AI will build greater confidence among family members, particularly regarding data.
2. Regarding cost reduction and expenses, especially in logistics and supply chain management, including inventory delivery and transportation (Logistics and Supply Chain Management), which reduces costs and results in higher profits, AI efficiency can help reduce redundant work, increase accuracy and reduce errors. There are many examples of successful family businesses to study as a guideline.
3. Process Improvement: Robotic and automated production systems increase safety and accuracy, boost efficiency, and increase productivity with sufficient data. AI can help reduce redundant processes, such as automating accounting, inventory, or customer service. This allows family businesses to reduce costs and speed up operations and inspections. AI data analysis helps businesses make more accurate decisions, such as forecasting sales or market trends, resulting in higher profits.
4. Create new innovations. Use AI to analyze customer data, develop new products/services, and improve customer experiences. AI opens up opportunities for innovation, such as developing new products, personalizing services, and creating customer experiences that are superior to competitors.
5. Expanding the market: Using digital platforms and AI helps reach a wider audience of new customers, increasing the company's revenue.
6. Family businesses that embrace AI are often able to better compete with larger companies, even with limited resources, by leveraging technology to enhance their capabilities and reduce costs without requiring a large workforce.
7. Accurate strategic decision-making: AI and analytics will help family business executives gain a real-time overview of the business and market, analyze risks, predict trends, and make faster decisions. Using AI to analyze competitors allows for an understanding of their strategies and the ability to adapt quickly.
8. Effective risk management: AI can detect irregularities and prevent fraud, such as alerting you about unusual transactions in a retail business or managing family finances. It can also help quickly assess business risks, such as analyzing supply chains or economic trends that could impact a family business.

Guidelines for preparation and adaptation for Thai family businesses

1. Assess organizational readiness and understand the potential of AI in setting a strategy that will lead to business success. There should be a clear vision and goals of the business values, plan the use of AI to be consistent with the short-term and long-term goals of the business, and consider how AI will help solve problems, including looking at how competitors or business partners in the same industry are using AI. It is recommended to use consultants or professional directors who have knowledge of AI to help develop the AI system and its use.
2. Consider opportunities and risks Carefully analyze opportunities, obstacles, and risks from AI use, including legal issues, responsibility, and investment. Develop human resources and organizational culture to enable personnel to learn, train, and develop digital skills, enabling executives to understand AI and new technologies related to family businesses in an ethical and legal manner.
3. Create a culture of innovation Encourage learning, experimentation, and learning from failures and mistakes in not using or implementing AI in other organizations. This can improve work methods and organizational structure accordingly. Professional consultants or board members with knowledge in this area should also be available to provide advice.
4. Adding the role of the new generation of heirs Enable Next Gen Generations X, Y, and Z to participate in introducing AI and new technologies to the business by delegating management authority to professional advisors or directors with knowledge of AI to provide guidance. Furthermore, business operators must support both investment and self-learning, including experimenting with AI in their own work.
5. Agree to decentralize decision-making power By assigning tasks and delegating authority to new generations with greater AI capabilities to reduce delays in adaptation, a clear timeframe and appropriate investment can be established. Alternatively, the AI business may be separated for the new generation to manage to support other businesses, if there are multiple businesses.
6. Invest in people, technology and information systems and seriously invest in developing the skills of executives and employees in AI, such as investing in technology, moving data to the cloud, using Hybrid Cloud for flexibility and reducing work costs. For those who are still unsure, you may choose to invest in small projects first. You should study examples of businesses that have used AI and IoT, such as Smart Farm systems, factory automation systems, Chatbots for customer service (case study from the example of a Thai family business at the end).
7. Risk and Ethics Management If a family business adopts AI, it must establish a responsible AI use policy, taking into account ethical, privacy, and cybersecurity implications, as well as comply with laws and regulations. Ensure that the use of AI complies with relevant regulations and is in line with government policy guidelines.
8. Measure and improve continuously As AI technology changes rapidly, it is imperative to measure and make decisions for improvement quickly. Simultaneously, we must monitor government policies and situations, including BOI tax measures and government subsidies.

AI is not only a crucial technology, but it will also be a key factor in enhancing the competitiveness of family businesses, including reducing costs, increasing efficiency, creating innovation, and making more accurate decisions. Furthermore, it will enhance financial transparency, enabling timely and auditable management of family businesses, reducing conflicts among family members, and ultimately fostering sustainable family business succession from generation to generation.

Therefore, family businesses should develop clear strategies, develop employee skills, embrace innovation, and modernize their organizational culture. This is especially true for the successor generation, who are learning new things and have decision-making power. With the support of the successor generation, they must be able to adapt and survive and thrive sustainably in the AI era.