Family businesses and private equity
As the states of the MENA region attempt to cut back their role in the economy, and the Gulf states in particular attempt to move away from their dependence on oil, private sector firms are emerging as the key to achieving sustainable economic growth. Although the region's economies remain dominated by the public sector, private firms have recorded impressive growth in recent years in much of the Middle East and north Africa.
Despite such growth, the private sector's share of economic activity remains small, and within that, the family-run business remains king. According to Habib at TNI: "The private equity market is not very well developed, and there are large numbers of family-run businesses. Very few have gone public, and when they do, they still want to maintain control."
More than 70% of the private sector in the Middle East is thought to consist of family-run firms, although there are no hard figures. The predominance of family businesses is not just a feature in the Middle East, however: 37% of the Fortune 500 companies are considered family businesses, and about 60% of public companies in the US are still family-controlled.
There are three types of family businesses.