Abu Dhabi: Family businesses in the Middle East and in the Gulf region face dual operational challenges in a difficult global economic environment and a period of managerial transition of businesses to a third generation, business owners told the Gulf News on Sunday following the opening of the Owners Forum – Abu Dhabi 2012
Calling on the government to protect local industries and companies, Mohammad Al Fahim, chairman of Al Fahim Group, told the Gulf News: “In order to survive, grow, and take our places among the many family-run firms in the region and to blossom, we need government support and backing similar to that which was during the leadership of the late Shaikh Zayed Bin Sultan Al Nahyan when he supported local companies by ensuring them government work and purchasing their products and services.”
“Businesses for foreign and international companies should be through local companies in order to protect family businesses and to move ahead with a third generation of entrepreneurs. In the GCC, family businesses are relatively young with most of them less than 60 years old in the market,” said Al Fahim.
Khalifa Saif Al Ketbi, Managing Director of Darwish Bin Ahmad and Sons, told the Gulf News: “I second what Al Fahim asked for including a protection law to safeguard the activities of local companies to ensure their continuity in the market as most family businesses started with one person and now they constitute more than 80 per cent of the UAE market.”
“We should also work on a well-structured education system, sustainable job market and encouraging innovation,” added Al Ketbi.
Shaikh Nahyan Bin Mubarak Al Nahyan, Minister of Higher Education and Scientific Research, said in a keynote address at the opening ceremony of the Forum, that such forums are the most prominent events as regards the activities of family businesses in the region which helps to explore developing the role of family businesses in the economies of the region. “Family businesses in the region are one of the most important pillars of economic activities in the Middle East as they play a key role in accelerating economic growth and contribute actively to the process of economic development in such countries,” said Shaikh Nahyan .
He pointed out that “the most successful family businesses in the country are one which strikes a perfect balance between responsible business ownership, professional management, and pleasant family dynamics.” said Shaikh Nahyan.
“Family businesses globally reveal that the most critical factor to their success is the families’ coordinated and sustained long-term strategy for growing and controlling their businesses,” Shaikh Nahyan stressed.
Fatima Obaid Al Jaber, Chairperson of Abu Dhabi Business Women Council, said: “It is estimated that businesses are 10 to 40 per cent more successful if entrepreneurs owning such businesses had previous exposure to family business. Such entrepreneurs gain valuable experience and insights through informal learning made available to them in a family business environment.”
Al Jaber added: “Family businesses have played a dominant role in the economies of this region. It is unlikely that this is going to change anytime soon. More than 80 per cent of businesses in the Gulf are either family-run or controlled by families, a clear indication of the importance of family in the region’s economic framework.”
Diversifying products, services
Talal Abu Gazaleh, chairman of Talal Abu Ghazaleh Organisation, told the Gulf News that in order to succeed in family businesses, owners should diversify their products and services to their clients and customers.
“As for us we have 28 specialised companies offering 50 professional, educational and business advisory services and other services such as software solutions, translation, legal and recruitment,” explained Abu Ghazaleh.
He called on expanding geographically beyond one’s limited country borders.
Samih Sawiris, chairman of Orascom development said family businesses face challenges relating to financing projects.
The Forum is organised by Owners Forum Company in cooperation with the Abu Dhabi Chamber of Commerce and Industry (ADCCI) and is supported by the Abu Dhabi-based Department of Economic Development (DED), the National Bank of Abu Dhabi (NBAD) and a number of family businesses in the UAE.
