Despite Europe’s current economic and political problems, almost two thirds of respondents (64 percent) said they believe the Euro in its current form will still exist in 5 years time.

Mark Godson, head of management consulting at KPMG Saudi Arabia, said the survey highlights the focus of Saudi companies on transforming business operations to realize cost efficiencies and addressing risk.

“This focus is consistent with the current Saudi environment, where the market is dynamic and growing with an increasing in-flow of foreign players into the market. Locally, a large proportion of the private sector is represented by family run businesses, with the market maturing, a number of these businesses are keen to put in place initiatives toward risk management and business transformation,” Godson added.

“Even in the government sector, large institutions have initiated transformation programs to improve efficiencies and deliver performance. A good example of such an initiative is the performance improvement program started by The Electricity, Co-Generation Regulatory Authority (ECRA),” said Godson.

He added: “Exploiting growth opportunities through successful transactions” and “Improving cash and working capital management” were next hot topics for Saudi business community as represented by 36 percent each as compared to 36 percent and 42 percent respectively for all respondents. The survey also reveals various “transaction-hungry” countries from Eastern Europe and Middle East (Kuwait 72 percent, Hungary 66 percent, Slovakia 54 percent, Netherland 48 percent and UK 45 percent)

Arvind Singhi, KPMG’s senior director in Transaction and Restructuring Advisory in Saudi Arabia, said the volume of transactions in the M&A market is lower than most economies of comparable size and other regional economies.

He added: “Firms have been achieving growth through greenfield investments and expansion of existing businesses. In 2009, the Ministry of Commerce and Industry issued commercial registers for the establishment of 2,865 new companies with a total capital of SR32.9 billion. Furthermore, active portfolio rationalization/management through divestments and acquisitions is not widely practiced among Saudi business groups. However, M&A activity, which is slowly picking up, is likely to gather pace as the overall economy matures.” He said the Saudi Government has actively started PPP initiatives in infrastructure, health care and education sectors.

The structures for these initiatives are still evolving. However, there has been enthusiastic reception in the market for these initiatives, as evident in the survey.”

“Going forward, Saudi Arabia will continue to be a growth focused market, with wide range of opportunities and limited number of mature sectors,” said the director.

A look at the sectors gives an insight into the specific challenges faced by individual industries.

For example, the overwhelming majority of manufactures surveyed believe that the growth agenda in the future will be characterized by a number of factors such as continued globalization and a need for a footprint in the emerging markets (90 percent).

Respondents agreed that key characteristics for future manufacturing supply chains must be greater flexibility and the ability to stop and restart supply immediately.

The majority of executives in the media and telecoms sector (81 pecent) see an urgent need to rewrite business models in the sector and take them out of the analogue past in order to succeed in the digital world of the future.

The survey also provides a fascinating view into the changes needed in public sector.

Ninety-two percent of respondents for example foresee a much greater involvement of the private sector in public health care, both in terms of direct medical provision but also in terms outsourced back office functions.