Family businesses across the Middle East are thriving in the face of the global economic downturn with significantly more of them revealing strong sales growth in the last year than their counterparts in the rest of the world.
Middle East family firms show strong sales growth
Family businesses across the Middle East are thriving in the face of the global economic downturn with significantly more of them revealing strong sales growth in the past year than their counterparts in the rest of the world.
More than 80 per cent of family businesses across the Middle East reported strong growth in sales last year compared with just 65 per cent of family businesses in the rest of the world, according to the annual family business survey conducted by PricewaterhouseCoopers, the accounting firm.
"Our survey clearly shows that family businesses in the Middle East will continue growing significantly," said Amin Nasser, a PwC partner and the head of Middle East entrepreneurial and private clients.
"Compared with the rest of the world, family businesses in the Middle East are less fazed by the general economic situation. This has created a strong framework for family businesses to continue targeting ambitious goals, bringing stability to a balanced economy."
The survey, which is set to be published by PwC in Dubai today in conjunction with the Dubai Business Women's Council, also showed that family-run businesses are much more confident about their prospects in the next five years than their counterparts in the rest of the world.
The survey found that 23 per cent of Middle East businesses expect to grow quickly and aggressively in the coming years, compared with just 12 per cent in the rest of the world.
Middle Eastern family businesses did express some concerns in this year's survey, however, with hiring workers with the right skills to help them achieve their growth targets chief among them. PwC asked respondents to the survey if they thought young people entering the job market had the right skills to meet their needs. In the Middle East an overwhelming majority of family businesses were concerned that young job seekers did not have the right skills or education.
The result was expressed in the survey in terms of a net agreement, which is the number of people disagreeing with a certain statement subtracted from the number of those agreeing with it.
The result for the Middle East as a whole was minus-14 per centor 20th out of a list of 28 regions and countries. Taiwan was first with a net agreement of 34 per cent and South Africa was last with a net agreement of minus-61 per cent.
Middle Eastern family businesses are also much more wary of succession plans than their counterparts in the rest of the world.
According to the survey, some 40 per cent of family businesses in the Middle East are concerned that the transfer of assets to the next generation might cause serious problems compared with 32 per cent in the rest of the world.
Twenty per cent of Middle Eastern companies expect a succession issue to cause major conflict in a family business compared with 9 per cent globally.
Perhaps as an antidote to this, more family businesses are bringing in non-family members as directors.
"In our experience, family firms in the Middle East are increasingly looking to strengthen their boards," PwC said. "They want board-level discussions to be about business, global challenges, growth, strategy, and profitability, rather than family issues or conflicts."