Building our nation: One business startup at a time

SMALL businesses are the backbone of most economies. According to a paper done by Bandar Al Hajar and John Presley, small businesses account for over 90 percent of firms and between 30 and 40 percent of total employment in most developed economies (68 percent in the case of Japan).

Further, and according to a qualitative research done by the Bolton Committee in the United Kingdom, investing in small businesses is good for business as well as national growth and sustainability. SBS are the seed corn of future large businesses; they are more flexible and can adjust production more quickly to market change; they are a source of innovation and provide opportunities for those who wish to initiate their own businesses. And they add value to larger firms by providing them with support services that free them to concentrate on their core activities.

Developed countries are visionary and have made their mark toward this strategic impact. They have invested heavily in small businesses and startups by taking giant leaps to create the enabling environment that supports business startups and assists in their development and sustainability.

Despite this global recognition, the development of the SB sector in Saudi Arabia is at a standstill and needs structural intervention if it is to be developed and sustained. For those of us who experience the excessive administrative and financial demands imposed upon our SBS by our national bureaucracies, we know firsthand of the crippling effects of over-regulation that has taxed financially, crippled our innovation, and frustrated our motivation.

As investors, we are systemically paying the heavy price of living up to the archaic expectations of a bureaucracy disconnected from the realities of modern day needs. Instead of encouraging us to focus on our core business, we are forced to pay attention to a quagmire of archaic administrative and regulatory demands. Instead of giving us the incentive to contribute to national development, we are penalized for our very existence. Instead of positioning us as partners in development we are suspiciously viewed as entities with hidden agendas…

We are THE investors in our future and that of our nation. We operate by our own financial investment and without the safety nets provided by most developed countries. For us, accessing flexible government-assisted financial loans is nearly impossible, as is credit facilitation. We base our business and financial decisions on independent research, because of the lack of a national research and information system. We are penalized by the duplicity of administrative processes and we are taxed by the fees that accompany them. Isn’t it therefore a surprise that we still exist? Not really. We exist because of independent will and determination and we are sustained by the belief that we ARE legitimate partners in development and prosperity.

Today as Saudi Arabia witnesses a déjà vu economic boom, its investment priority should be on its ability to support and sustain small businesses and startups. Today as Saudi Arabia is threatened by its bloated public sector bureaucracies, its socio-economic survival depends on its ability to adopt and implement a flexible decentralized system that nurtures, incubates, assists, and incentivizes its primary engine of growth: Small Businesses and startups.

In February of 2007 I wrote an article published in Arab News titled “The Young and the Restless”. In it I showcased the story of 2 young women entrepreneurs venturing into the challenging territories of starting a small business in Saudi Arabia — single-handedly and without the help of mediators or “Wastas”.

The challenges they faced were many but one that stood out most was the one-year delay our young entrepreneurs had to endure to actually open their doors for business. Our failed bureaucratic system that is charged with assisting business startups could not expedite the registration process in a speedy manner — a delay that cost our young ladies excessive and unnecessary financial costs brought on by a 12-month extension delay.

That was back in 2007. It is now 2012. Can we dare to dream that we are at a crossroads to genuine economic reform? Can we dare to envision a future where young entrepreneurs do not have to face a crippling bureaucracy that taxes them emotionally and financially just because they dare to dream? Can we envision a future in which starting a business takes 24 hours instead of 12 months? Can we hope for a future in which small business startups actually do become the primary employer of our Nation?

Fatin Bundagji

Developed countries

are visionary and have made their mark toward this strategic impact. They have invested heavily in small businesses and startups by taking giant leaps to create the enabling environment that supports business startups and assists in their development and

sustainability.