By 2030, more than one trillion dollars in assets will transfer to the next generation across the Gulf. This transition is often described in simple terms.

Either the successor breaks away from the family enterprise to build a startup, or they remain inside the business and preserve existing structures with minimal change.

That framing is increasingly inaccurate.

Across Saudi Arabia, the UAE, and Bahrain, a growing group of NextGen leaders is taking a different approach. They are not exiting family conglomerates, and they are not merely maintaining them.

Instead, they are using these businesses as platforms to build new ventures, new capabilities, and new asset classes from within.

This shift is changing how innovation happens in the Gulf, and who controls it.

Why the Family Business Has Become the Preferred Starting Point

Starting a new company in most markets means limited capital, weak distribution, and slow regulatory access. In the Gulf, established family groups already possess these advantages.

They control supply chains, have long-standing relationships with regulators, and operate at a scale that most startups cannot reach for years.

NextGen leaders are increasingly aware that these characteristics are not constraints. They are structural advantages.

By developing new ventures inside existing groups, founders secure an anchor client from the outset, reduce early operational risk, and test ideas in real market conditions. This approach avoids the early-stage failure cycle that affects most standalone startups.

The following cases show how this pattern is being applied in practice.

Case Study 1: Building a Logistics Business Inside Retail

Saud Alsulaiman and Flow Progressive Logistics

For decades, the Alsulaiman Group was best known in Saudi Arabia for holding the IKEA franchise.

By the mid-2010s, delivery and fulfillment had become a major operational weakness. Large furniture items were difficult to transport efficiently, and third-party logistics providers were optimized for small parcels rather than bulk goods.

Rather than outsourcing the problem, Saud Alsulaiman created a separate logistics company designed to solve it.

Flow Progressive Logistics was established as an independent business with guaranteed initial volume from IKEA. This allowed the company to invest in infrastructure and systems from the start, while building services suitable for the wider market.

Today, Flow operates as a leading heavy logistics provider in the Kingdom. It works with global investors on large-scale logistics developments and serves clients far beyond its original retail base. The family business did not simply improve an internal function. It created a new logistics company that supports the broader economy.

Case Study 2: Creating Institutional Space for Internal Founders

Chalhoub Group and The Greenhouse

The Chalhoub Group built its position as a leading luxury distributor in the Middle East. As global brands increasingly move toward direct digital engagement, the group recognized the risk of relying solely on traditional distribution.

The response was organizational rather than cosmetic.

Chalhoub launched The Greenhouse, an internal venture platform that allows employees to develop and test new business ideas with structured support. Failure is treated as part of the process rather than a reputational risk.

One outcome of this approach is Mindme, a workplace wellbeing platform developed by Nokhez Usama, a behavioral neuropsychologist within the group. Instead of leaving to build a startup externally, she developed the product internally, with access to real users and operational feedback across the organization.

By the time Mindme reached the market, it had already been tested, refined, and validated at enterprise scale. The group retained talent, and a new product line emerged without external funding pressure.

Case Study 3: Updating the Balance Sheet of a Legacy Group

The Kanoo Family and Digital Assets

The Kanoo Group in Bahrain traces its history back more than a century. Its assets have traditionally included shipping, industrial services, and real estate. In 2020, fifth-generation family members Abdulaziz and Abdulla Kanoo proposed allocating a small portion of the family portfolio to digital assets.

The proposal was challenged internally and evaluated in detail. Approval was eventually granted on a limited basis.

The allocation proved profitable. More importantly, it changed internal perceptions of how the group could approach new asset classes. This credibility enabled the twins to establish ARP Digital, a firm that now advises other family offices on digital asset exposure and custody.

The original operating businesses remained intact. What changed was the family’s approach to capital allocation and risk assessment.

What These Examples Have in Common

Across sectors, the same pattern appears:

  • Existing businesses act as first customers and test environments.
  • Capital is deployed with long-term ownership in mind, not short-term exits.
  • Governance structures are adapted to allow experimentation without destabilizing the core group.

This approach suits the Gulf context. Family ownership, patient capital, and strong local networks make internal venture building more practical than importing startup models designed for different markets.

Implications for the Gulf Economy

Much of the discussion around regional innovation focuses on accelerators, venture funds, and university spinouts. These will continue to matter. However, some of the most consequential new companies in the region are emerging inside long-established firms.

For policymakers, this reinforces the importance of governance reform and minority investment structures.

For family offices, it highlights the need to formalize internal venture pathways.

For NextGen leaders, it offers a clear alternative to choosing between loyalty and ambition.

Innovation in the Gulf is not limited to new entrants. Increasingly, it is being driven by successors who understand both modern business models and the institutional strength of their own organizations.

Conclusion

The next phase of economic development in the Gulf will not be defined solely by new startups. It will also be shaped by how existing family groups evolve under new leadership.

NextGen leaders are demonstrating that continuity and change are not opposites. By building new ventures inside established businesses, they are extending the relevance of family enterprises while contributing directly to the region’s economic diversification.

This is not a rejection of tradition. It is a methodical reworking of it.