Abstract
Family-owned Mittelstand firms have often been characterized as Janus-faced, meaning they can have two contrasting sides when it comes to innovation. On one side, they are technology leaders—especially in niche markets. On the other side, they can be slow adopters, deeply rooted in tradition. Digitalization is one of the biggest innovation challenges to firms of all sizes and ownership types. Research and observations in business practice show that while some family-owned Mittelstand firms master digitalization despite limited resources and traditional industries, others lag dangerously behind. So, how can family-owned Mittelstand firms prepare for a digital future, and which familial idiosyncrasies might help them? Based on current observations and interview data, we propose a framework for how these firms can use their unique resources to tackle challenges related to digitalization. To be successful in a digital world, they must leverage their family historical capital, family collaborative capital, and family venture capital. We highlight why and how these capital types should be linked to fully leverage their potential.
