Saudi Arabia’s entrepreneurs poised for success: Report
Saudi Arabia is fertile ground for entrepreneurs, according to initial results from the 2016/17 Global Entrepreneurship Monitor report on the country. The report recommended greater coordination within the entrepreneurship ecosystem to help startup companies reach their full potential.
The 2016/17 GEM Saudi Arabia Entrepreneurship Monitor is the most comprehensive survey of attitudes toward entrepreneurship in the Kingdom. The report is an initiative of the Babson Global Center for Entrepreneurial Leadership (BGCEL) at Prince Mohammed bin Salman College of Business and Entrepreneurship (MBSC). BGCEL is supported by a grant from Lockheed Martin.
“Fostering the ambitions of Saudi Arabia’s entrepreneurs is an essential investment in the longterm growth of the nation,” said Fahd Al-Rasheed, vice chairman of the board of trustees at MBSC. “The GEM Saudi Arabia study places entrepreneurs at the center of the conversation around economic development and offers clear recommendations on enhancing the efficiency of the entrepreneurship ecosystem.”
The report shows a strong cultural affinity in Saudi Arabia toward entrepreneurial activity. More than two-thirds of the work- ing age population believe starting a business to be a good career choice and 25.8 percent are considering starting up a new business within the next five years. This is good news for job seekers, as Saudi startups and early-stage SMEs are typically well-staffed compared to the global average. About 36.6 percent of early-stage startups — enterprises active from three to 42 months — have more than five employees.
The report also shows a marked increase in female entrepreneurship. Around 38.6 percent of entrepreneurs in the Kingdom are women, a proportion that has increased rapidly in recent years.
“The 2016/17 GEM Study shows that social attitudes in Saudi Arabia toward entrepreneurship are very positive, which contributes to a significant enthusiasm in the country for entrepreneurial endeavor,” said Ignacio de la Vega, director of BGCEL and professor of entrepreneurship at MBSC.
“This is particularly encouraging in light of the Vison 2030 objective to increase the economic participation of small- and medium-sized enterprises. Today’s startup, with the right support, could be tomorrow’s market or industry leader.”
Despite the positive sentiment toward starting a business in Saudi Arabia, entrepreneurs face significant challenges sustaining their operations. Factors including limited international reach, competitive challenges and a lack of experienced leadership contribute to a high rate of business closures.