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European Family Business Barometer: incorporating the results for Africa

Embracing innovation

The results of the second edition of the African family business barometer, conducted by KPMG Enterprise in Africa, have been incorporated into this report to highlight both the similarities and differences between business families based in Europe and Africa.

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Our annual Barometer, a joint-partnership between KPMG Enterprise and European Family Businesses (EFB), shows Europe’s family businesses are confident about the future but must become more agile, innovate faster and attract top talent to remain competitive and continue to grow. Now in its seventh edition, the survey received more than 1,500 responses from family business owners in 26 countries across Europe and reveals that family businesses continue to build on the momentum of past strong economic growth. The results of the second African barometer survey have been incorporated in this report and provide some interesting results.

Africa’s family businesses are confident about the future and planning for profitable growth. One of the key strategies for growth is embracing innovation. Respondents are capitalizing on past growth and reinvesting profits into the business. The majority (90 percent) are investing in the core business, 85 percent are investing in training their workforce and 81 percent are investing in innovation and technology. This is also a direct response to the top challenge facing respondents: declining profitability.

Several highlights emerged throughout the reports analysis, including:

  • 74 percent of respondents report that they are confident or very confident in their family business’ economic prospects over the next twelve months. 
  • 57 percent of total respondents reported increased turnover over the past year compared to 39 percent in 2016. A large number of respondents were able to achieve this growth without increasing staff numbers.
  • Improving profitability; increasing turnover; and becoming more innovative are the top three priorities for the next two years.
  • The key concerns of family businesses in Africa are: Declining profitability, access to finance and political uncertainty.
  • There has been a significant shift of family businesses looking to transition key roles to the next generation since 2016. These include: management (35%), governance (29%) and ownership (35%)
     

© 2019 KPMG Services (Pty) Limited, a South Africa private company and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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