On Thursday 23rd March, the Babson Global Center for Entrepreneurial Leadership (BGCEL) at Prince Muhammad Bin Salman College of Business and Entrepreneurship (MBSC) launched the 2016/2017 GEM report on Saudi Arabia.
The report shows a strong cultural affinity in Saudi Arabia toward entrepreneurial activity. More than two-thirds of the working 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. 36.6 percent of early-stage startups – enterprises active from 3 to 42 months – have more than five employees.
The report also shows a marked increase in female entrepreneurship. 38.6 percent of entrepreneurs in the Kingdom are women, a proportion that has increased rapidly in recent years.
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. Among the initiatives highlighted in the report that could foster sustained growth in entrepreneurship are: improving financing channels; enhancing accessibility to R&D; and incorporating entrepreneurial education into the school curriculum from primary through to tertiary grades.
“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 Dr. Ignacio de la Vega, director of BGCEL, Professor of Entrepreneurship at MBS and leader of the GEM Saudi Arabia team. “This is particularly encouraging in light of the Vision 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.”