Professor of Management Practice
Traditional sectors are often overlooked by the tech-focused start-up world. Yet they present untapped potential due to demographic shifts. Many family-owned small and medium-sized enterprises (SMEs) lack successors, as their owners approach retirement without a family member to take over. This trend is widespread in Europe, where around half of family businesses face succession challenges in the coming decade. With fewer people opting to continue family businesses, there’s a unique opportunity for entrepreneurs to enter these industries, says Yannick Dillen, Professor of Entrepreneurship at Vlerick Business School. Unlike the saturated tech markets, traditional sectors offer stable revenue streams, established customer bases, and solid profitability.
What advantages do traditional industries offer compared to high-tech sectors?
Yannick Dillen: “Traditional industries like manufacturing, logistics, agriculture, and retail provide distinct advantages. These sectors have well-established infrastructures and loyal customers, making them financially stable and sustainable. Unlike tech start-ups that compete intensely for investors and market share, conventional businesses often have less direct competition from new entrants. Furthermore, traditional businesses don’t always need drastic innovations to remain profitable – and small-scale technology implementations, like process digitalisation and data analytics, can significantly boost efficiency and margins. This makes traditional sectors attractive for entrepreneurs seeking long-term growth without intense market pressure.”
Unlike saturated tech start-up markets, traditional industries offer stable revenue streams, established customer bases, and solid profitability says Professor Yannick Dillen.
How can modern technology be applied to traditional sectors to increase their profitability?
Yannick Dillen: “Traditional businesses are often financially sound. Yet introducing even modest technological upgrades can enhance their profitability. For example, digital solutions in logistics can optimise supply chains, while manufacturing processes benefit from quality improvements through data monitoring. Agriculture can adopt automation to streamline production. Many of these industries have room to grow by implementing digitalisation, data analytics, or process automation. These innovations not only make operations more efficient but also align with long-term industry trends, ensuring these sectors can stay competitive and viable.”
Why should start-up founders consider traditional business ideas throughout the idea-generation phase?
Yannick Dillen: “Entrepreneurs tend to focus on disruptive technologies and emerging markets for rapid growth. However, traditional businesses offer unique benefits: they are often in less competitive spaces and provide a clear path to profitability and stability. Additionally, many traditional sectors are ready for innovation in terms of technology adoption, giving start-ups an edge in scaling up with minimal competition. This approach can lead to sustainable business models that support economic stability and continuity. It offers entrepreneurs a niche within established industries while contributing to their revitalisation.”