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Growth obstacles to family businesses in East Africa may be self-inflicted

East African family-run enterprises have not prioritized research and innovation in order to assist them in recovering from the economic constraints posed by the COVID-19 pandemic.
Growth obstacles to family businesses in East Africa may be self-inflicted
Growth obstacles to family businesses in East Africa may be self-inflicted

East African family-run enterprises have not prioritized research in order to assist them in recovering from the economic challenges brought about by the COVID-19 pandemic, and as such have been met with some consequences.

According to the most recent PricewaterhouseCoopers (PwC) study, just 12% of the region's sampled family-owned firms have prioritized investment in innovation or research.

Research findings

Apart from inadequate innovation and research, the poll 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.

Read also: Kenya and Uganda collaborate to enhance connectivity in East Africa

The poll 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.

The study, which was done between October 2022 and January 2023 when the globe had finally begun to recover from the effects of COVID-19 and felt more optimistic about the future, covers Kenya, Tanzania, Uganda, Rwanda, and Ethiopia.

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