The vital role of family businesses in shaping Dubai’s rapid growth
As the President and Chief Executive Officer of Dubai Chambers, one of the largest economic development arms in the United Arab Emirates (UAE), Mohammad Ali Rashed Lootah is at the forefront of developing strategic initiatives to improve ease of doing business.
Charged with supporting local businesses looking to expand globally, attracting foreign companies and investment, and advancing the digital economy, he at once understands the legacy of family businesses in building the ultramodern emirate and the importance of continuous innovation for their future growth.
Opened earlier this year by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, the Dubai Centre for Family Businesses is a typically forward-thinking initiative that fosters the development of the family business sector and enhances its economic contribution to the city’s strategic future growth plans.
Ahead of welcoming The Campden Global Owners & Family Office Congress from October 9-13, Lootah discusses the evolution and focus of the Dubai Centre for Family Businesses, the role family firms will play in the city’s future and how the region is leading the way in sustainable investment…
The Dubai Centre for Family Businesses is a clear indicator of the Emirate’s emphasis on attracting ultra-high-net-worth family offices and businesses. What was the evolution of that focus?
Currently, family businesses employ more than 70% of the workforce in the UAE private sector, which is significantly higher than the majority of leading cities. They also contribute around 40% to the national gross domestic product (GDP).
With this in mind, the UAE’s wise leadership is committed to ensuring the growth and sustainability of family businesses as a key strategic priority. The Dubai Centre for Family Businesses was launched to fulfil these goals and works to support and empower family businesses in key areas such as governance and succession planning, as well as helping them identify and overcome any challenges to ensure their sustainable success.
As you just mentioned, family businesses represent a huge proportion of all private companies in the UAE. Multigenerational firms have played a huge role in shaping Dubai as it stands today, what role do you think they will play in the future?
Family businesses in Dubai have initiated a lot of important sectors in the city and played a key role in shaping its dynamic economy. We believe they will continue to increase the diversification of the economy and contribute to the growth of the city.
Moving forward, family businesses will also play a vital role in enriching the talent in the city by necessitating continuous, dynamic changes when it comes to market requirements. By ensuring the sustainability and growth of their own businesses, they will help to ensure that the talent pool will always match the needs of the market. This creates a win-win situation for both Dubai and the businesses by supporting their sustainable economic growth.
It's extremely important to have the right systems and tools to help family businesses.
The Dubai Centre for Family Businesses will work to develop the managerial skills of partners in family businesses, as well as founders, members, and their children. How important is education and next-gen preparation to the ongoing success of family businesses?
It's extremely important to have the right systems and tools to help family businesses. At Dubai Chambers, we are committed to ensuring the right educational system is in place and have announced several programmes specifically designed to support family businesses.
The first programme is dedicated to the first line of successors – the current second tier of management – to ensure they have the skills required to be able to take the lead in the future.
The second programme will target the next generation, the younger age group who are not necessarily all working within their family businesses yet. This is a very important mid-management level that we really need to communicate with about the importance of family and business dynamics.
The third awareness programme is for non-active shareholders and advisors. We feel that it’s essential for family businesses to have access to trusted family advisors, and aim to build a third-party independent pool they can always reach out to for advice.
How can family businesses contribute to the Dubai Economic Agenda D33, which aims to increase private sector investment in development projects to $272 billion by 2033?
You need family businesses to be aligned with the new direction. The agenda is very ambitious and features more than 100 transformational projects, which I believe will create exciting opportunities for family businesses to diversify their portfolios.
These businesses need to always pay close attention to their portfolios, because what they are currently doing may no longer be relevant ten years in the future. It is vital to diversify, and playing an active role in the D33 agenda will give family businesses great opportunities to move into new lines of business or emerging sectors.
Campden Wealth’s 2022 Global Family Office Report found there is an increased interest in sustainable investing. 42% of those surveyed now invest sustainably and this percentage is expected to increase to 50% over the next five years. Sustainable development has long been a cornerstone of family businesses in the UAE, what can the region teach families around the world on this matter?
Sheikh Zayed [the founder of the United Arab Emirates] set a great example for us all through his deep-rooted belief in sustainability. Dubai Chambers launched the Centre for Responsible Business in 2004, nearly two decades before Dubai was selected to host COP28, and we have many success stories.
The Dubai Chambers building itself is almost at net zero, we have solar panels installed and generate energy from wind. In keeping with the spirit of COP28, we also recently conducted an awareness session for 720-plus representatives from the private sector, who showcased the achievements of their businesses in terms of sustainability.
In addition, the Mohammed bin Rashid Al Maktoum Solar Park – a major development overseen by the Dubai Electricity and Water Authority (DEWA) – is the largest standalone solar park in the world [at 77 square km]. There is an increased awareness around green finance, so our councils are specifically gathering solar energy companies into business groups and working with them to approve policies and laws with the government to help the sector grow.
What advice would you give to global family businesses that are looking to establish themselves in Dubai but don’t know where to start?
We at Dubai Chambers help companies to set up in Dubai free of charge. Our services ensure they have a smooth setup experience, help them to identify the right partners, and facilitate networking after they launch. Any family business that wants to set up in Dubai is welcome to reach out to Dubai Chambers, our dedicated teams will be happy to assist them.
As soon as they set up here in Dubai, we will help them to grow through the surrounding regions. We already have five offices in Africa, as well as offices in the ASEAN region and Latin America. We recently opened an office in London and increased our presence in Europe, and have more offices in the pipeline before the end of the year.
Dubai is also very well connected when it comes to Africa and Commonwealth of Independent States (CIS) countries, and these two regions are witnessing huge growth. As soon as they are in Dubai, global family businesses will be treated the same was as any other business – when it comes to the origin of the business, everyone in Dubai is equal.
The Campden Global Owners & Family Office Congress, an exciting new week-long experiential platform in response to demand from our regional and global client communities, will take place in Dubai, UAE from October 9-13. For more information, click here.
