OVERVIEW
“In the GCC, perhaps more than anywhere else world-wide, family businesses are all around us. From small and medium sized enterprises (SMEs), to renowned multinational corporations – family owned and managed companies in all guises form the backbone of the region’s economy”[1]
Family businesses account for more than: [2]
- 80% of Gulf companies.
- 52% of these companies are on the threshold of a transition between the second and third generation.
The family business sector plays an important role in the Gulf, with about:
- 60% of non-oil national income.
- 80% of job opportunities in the region.
- 75% of these companies grew in 2016.
While the region’s family businesses continue to be active and successful, the political and economic environments are now changing, and this is affecting both their current performance and growth expectations.
The 2016-2017 financial year has been challenging for the region, with significant policy changes, the introduction of new taxes and economic uncertainty. With oil prices falling, governments have proactively taken also with austerity measures to bolster the region’s economies.
Yet despite recent challenges, family businesses across the GCC continue to see sustained growth and positive performance.
"Family businesses in the region have demonstrated strong resilience to external pressures and challenges." [3] But there are also internal challenges they have to face if they are to fulfil their full potential.
Many of these internal challenges are similar to those faced by all family businesses across the world, but shaped by local culture and business customs in the region such as:
- Succession Panning
- Succession Panning
- Digital Disruption
- Professionalization
- Family and Corporate Governance
- Transparency and Communication
- The Role of the Next Generation
- Skills Shortages
WHAT ARE THE MAJOR CONCERNS FOR FAMILY BUSINESSES TODAY?[4]
[1} Harish Gopinath, Head of Family Business KPMG in the Middle East and South Asia - GCC Family Business Survey 2017. Driving the region forward - February 2018 – KPMG Enterprise www.kpmg.com/familybusiness
[2] https://goo.gl/WqfFPE - Mubasher.info/news
[3] Fawzi AbuRass Head of Family Business, KPMG in the Lower Gulf - GCC Family Business Survey 2017. Driving the region forward - February 2018 – KPMG Enterprise www.kpmg.com/familybusiness
[4] family business survey 2016, national bureau of economic research family business alliance https://www.pwc.com/m1/en/publications/family-business-survey/the-middle-east-family-business.html