According to the study reviewed by a member of the Chamber’s board of directors, Hamad Al-Awadi, on the sidelines of a Ramadan media council held in Abu Dhabi, family companies now acquire an 80% share in the wholesale sector, 70% in the transport sector, 60% in the financial sector and the manufacturing sector, in addition to the half share in the sector. Construction.
While he stressed the importance of companies developing a vision to overcome a number of future challenges, including the possible stagnation of some sectors such as construction and distribution, expectations of a slowdown in the economy in general, as well as what companies suffer from the weakness of the internal administrative structure to create new generations capable of managing and maintaining the strength of companies.
He added that only a third of family businesses succeed in the transition to the second generation, and between 10 and 15% of them succeed in the transition to the third generation, and at a time when 70% of family businesses in the country are about 40 years old, they need between 5 to 10 years. Coming to move from the first generation to the second generation, which is difficult in light of the repercussions of the Corona pandemic and the high margin of pressure in major industries such as manufacturing, retail and distribution, and low oil prices.
Al-Awadi confirmed that there are many proposals to help these companies in the administrative transformation processes that are expected to be put under study by the Chamber in coordination with both local authorities and family companies in the country, foremost of which is the creation of a legislative framework that maintains the continuity of the organizational structure of these institutions without being affected by the succession of generations who own their assets. In a way that ensures the stability of visions, action plans and strategies in the long term, while coordination between these bodies should establish advisory centers or specialized offices to support family businesses in this regard.