Most family-run businesses in East Africa have not prioritized research in order to assist them in recovering from the economic challenges brought about by the Covid-19, a recent survey by PricewaterhouseCoopers (PwC) has revealed.
The survey indicates that just 12% of the region’s sampled family-owned firms have prioritized investment in innovation or research.
The study, which sampled 95 family-run firms, was done between October 2022 and January 2023 covers Uganda, Kenya, Tanzania, Rwanda and Ethiopia.
Apart from inadequate innovation and research, the survey indicates that family-owned firms are not fully embracing the ongoing trend of corporate digitalization in the area, as just 46% of them claim to have good digital skills.
Over the next two years, family-owned firms in the region have high growth aspirations; seventy-five percent of them anticipate growth, as seen in the news publication, the East African.
“There is great optimism even in the face of significant challenges and disruption, which speaks to the resilience of these family businesses and their owners, stakeholders and communities,” the survey says.
The survey indicates that family companies in the area are overcoming financial difficulties, with 64% of them reporting growth and only 13% reporting a decline in sales.
This represents a substantial change from the 46% who said they saw growth and the 31% who said sales decreased in 2021, mostly due to the Covid-19 epidemic.
Hope
Yet it is not all doom and gloom. The survey shows that family run businesses in the region grew by 20 percent last year compared to a similar period in 2021, despite tough economic challenges.
Data from PricewaterhouseCoopers (PwC) shows businesses in Africa improved from 46 percent growth in 2021 to 64 percent in 2022.
“Considering the optimism broadly shared amongst many family business owners, now is an opportune time to focus on one of the key strengths of East Africa’s family enterprises: trust,” the report notes.
“While family businesses have long relied on the trust premium they’ve built for ensuring strong relationships with key stakeholders like their customers, our survey showed many organisations have been slow to adapt to the evolving nature of trust today.”
Business also said that it was essential to be trusted by customers, employees, and family members.
Among them, 56 percent are fully trusted by customers, 47 percent are employees, and 77 percent are family members, which is slightly higher than the global results.
Top priorities for family businesses include expanding into new markets, increasing customer loyalty, strategic acquisitions, the business’ carbon footprint, and social responsibility.
An expanded audience of stakeholders, the report added, includes the general public and younger generations such as millennials and generation Z, who have higher expectations for customer satisfaction and growth.