UAE’s commitment to supporting family businesses

Gulf Today, Staff Reporter

An expert panel brought together by the Sharjah Entrepreneurship Center (Sheraa) during their participation at the 6th International Family Business Forum 2023, has presented unique insights into how family businesses can mitigate risks and maximise profits as they identify startups to invest in. Some of the key insights included the UAE’s commitment to supporting family businesses, the importance of nurturing innovation in the younger generation, and the need to dispel the misconception of family businesses being slow to innovate.

An enabler of entrepreneurship and innovation in the UAE and beyond, Sheraa designed the panel session titled ‘De-Risking Investments in Startups for Family Offices’ to bring the two vital sectors of family businesses and entrepreneurship together to explore exciting new prospects for both.

Led by a group of luminaries including Abdulla Bin Touq Al Marri, UAE Minister of Economy; Najla Al Midfa, CEO of Sheraa; and Easa Al Gurg, Group CEO of The Easa Saleh Al Gurg Group, and moderated by Farida Elagamy, General Manager, Tharawat, the discussion offered unique insights into the key roles multigenerational businesses can play in driving the UAE’s economic growth strategy by forging deeper and lasting connections with the nation’s burgeoning start-up ecosystem.

Abdulla bin Touq Al Marri, Minister of Economy, said: “Under the guidance of our wise leadership, the UAE has embraced a forward-looking vision to create a comprehensive and competitive legal framework for family businesses following international best practices. The issuance of the Federal Decree Law No. 37 of 2022 on family businesses plays a crucial role in bolstering the national economy’s growth and ensuring its long-term sustainability. The UAE has also been proactive in launching supportive initiatives and programs to promote the continuity and growth of family businesses and enable them to keep pace with future business trends, all in alignment with the objectives of the ‘We the UAE 2031’ vision.”

“The Ministry of Economy launched the ‘Thabat’ family business program in collaboration with government and private sector partners. It is the first of its kind in the Middle East, designed to bring about a transformation in the family business sector. It encourages them to invest and expand within new economic sectors, including startups. The first two batches of the program gave rise to two projects by the Al Yousef and Alserkal families, with a focus on healthcare and food sectors, aided by the latest digital technology,” H.E. added.

The Minister of Economy continued: “We have crafted a new vision for the ‘Thabat’ program for the next three years. It broadens the program’s reach to attract more family businesses in the UAE and will accommodate two batches annually, each comprising 7 to 10 businesses. Additionally, we’re creating financing opportunities for family businesses that have successfully completed the program. Support is essential to foster the growth of these businesses and their projects in line with the country’s transition to the new economic model, paving the way for a knowledge-based economy centred around innovation and competitiveness.”

Bin Touq pointed out that this session offers an important opportunity to motivate family businesses to invest in startups. Such investments lead to the development of pioneering projects based on creativity and advanced digital solutions, reinforcing the UAE’s status as a preferred destination for family businesses’ investments and projects at regional and global levels.

Najla Al Midfa, CEO of Sheraa, delivered engaging feedback and insight during the panel discussion, emphasising the significance of the intersection between youth and the entrepreneurial landscape. She extended a special welcome to family businesses, highlighting the need for increased engagement in this area. Al Midfa recognised the unique mindset of today’s youth, tech-savvy and eager to make a positive impact on the world. She stated that the new generation is driven by both technology and purpose, seeking to merge profit with a broader social mission.

Al Midfa highlighted innovative Sheraa startups that have gone through their incubation process, including Solva, an innovative electric bike manufacturer; Palmade, specialising in biodegradable cutlery made from palm products; and Kyma, who produce a revolutionary tablet technology for surface cleaners. She stressed support for first-time entrepreneurs through mentorship, technical guidance, product development, licensing aid, and networking. Al Midfa emphasised Sheraa’s role in providing startups their first customer, encouraging family businesses to collaborate with startups to nurture the next generation.

Providing a window into the intersection of entrepreneurship and family businesses, the Sheraa CEO said, “Family businesses have a very unique role to play, not just as venture capitalists in new businesses. There are numerous ways we can collaborate with family businesses, forging connections with innovative startups and working together to nurture the next generation of entrepreneurial success, including the possibility of family businesses acquiring these startups.”

Easa Al Gurg, Group CEO of The Easa Saleh Al Gurg Group, spoke of the economic contributions of family businesses, shedding light on how multigenerational family enterprises adapt to the evolving entrepreneurial knowledge-based economy. He challenged misconceptions about their pace of innovation, highlighting their ability to adapt and leverage tradition for progress. Al Gurg emphasised the importance of balance, avoiding complacency, and embracing innovation for sustainability, shifting from traditional economies to foster bottom-line-focused investments that align with shared goals.

Expanding on this, Al Gurg said, “Every family business was originally a startup, and the perception of family businesses as slow or lacking innovation is not accurate when considering their long-term evolution. It’s about using tradition in the right way and building upon it. Being slow doesn’t necessarily equate to poor performance; when family businesses focus, nothing can impede their progress. To be sustainable, family businesses must be innovative and break free from traditional economies and commodity dependence. Investment should align with common goals and benefit both parties. Balancing innovation with the right policies is crucial, with all stakeholders moving toward shared objectives. It’s not just about innovating within our businesses but also outside, investing in emerging industries and startups. Family businesses need to actively engage within the broader entrepreneurial ecosystem.”

The panel discussion was also preceded by a presentation by American University of Sharjah Associate Professor, Dr. Rodrigo Basco Rodriguez, co-organiser of IFBF, who highlighted the vital role of family businesses in Sharjah’s entrepreneurial ecosystem. He also stressed the need for collaboration between government and family businesses to address various challenges. Discussing historical shifts in family business dynamics and the importance of wealth creation through institutional arrangements, resource endowment, and social connections, the Professor’s presentation underscored the significance of strategic engagement, empowerment, and continuous evolution in shaping the future of family businesses in the region.

The discussion attracted a distinguished and diverse audience of prominent individuals, including renowned business leaders, academic experts, as well as government officials. Leading companies and family businesses were also well represented, with industry leaders eager to explore strategies for investment in the dynamic startup ecosystem.