Dr. Mohamed A. Ramady
Publication Date: 
Mon, 2006-07-03 03:00

When one analyzes societies that have progressed in economic terms, it becomes noticeable that a key factor is the sponsoring, promoting and encouragement of an enterprising spirit from an early age. This creates the desire to experiment, take risks and promote an awareness of more complex issues than ones that are of immediate concern to younger people.

This entrepreneurial spirit often starts from secondary school, where students are encouraged to set up either imaginary or real companies, appoint management members from amongst themselves and promote their company. It is amazing to see how young students seem to mirror their real life elder counterparts, with management intrigues, petty jealousies, alliances, failures and successes all being played out, but with the children becoming interested in how the real world actually works.

They assume responsibilities and learn to present their cases and defend their decisions. They learn to take constructive criticism in their stride and not take matters personally. They learn to plan ahead and carry out research to enable their company or project to survive in a turbulent world. All these might seem irrelevant to them at the time, but the experiences gained certainly seem to help them in later life to able to cope with similar situations and problems.

This inquisitive knowledge-seeking and application aspect of education continues in higher learning, where students are encouraged to establish companies and use the resources of their university or college through what is called “incubator” programs.

This is not just for gifted students, but open to all those who can demonstrate practical ideas that can benefit themselves and society. Students at this age are not burdened by the worries of settled life and responsibilities — their ideas are still fresh and nothing seems impossible for them. Universities and society respond by creating the right environment for such ideas to take root and flourish and progress into companies. It might seem a simple dream, but it is from such simple dreams that big companies grow. Just examine the background of the giant information technology companies of today — most started in garages or discussions long in the night amongst like-minded but restless youth. Think of the Bill Gates and Richard Bran sons of this world. These are the role models of millions of young enterprising youth who not only dream, but also believe they can make it.

The situation in the Arab world, with few exceptions, is generally disappointing. Some attempts are being made to set up incubators for students to turn their ideas into reality, but these are either hampered by lack of suitable facilities, support from the wider community, or lack of funding. Ideas by themselves will not be enough. The young people will need wider community participation and involvement, for in the end, everyone benefits. In certain countries, these projects benefit from a “clinic open day” support system, where one or two days are set aside a month, and lawyers, bankers, financiers and venture capital investment companies participate in the “ clinic” and offer their advice free to young entrepreneurs. This advice ranges from how to establish companies, raise finance, prepare a professional business plan, patent their ideas and commercialize knowledge, to finally how to find business partners for their projects. They leave the young ones to get along and do what they are supposed to do best — generate ideas, without being overwhelmed by bureaucracy and red tape that will put them off the idea of starting a business.

One can only look around the Arab World in general and just imagine the possible obstacles faced, let alone the lack of wider community support as mentioned above. Why do they do it then in other countries? All those participating in promoting entrepreneurship — whether the government, lawyers, bankers or venture capital investors — look at these ideas as future growing companies, borrowers, clients and possible stock market flotations. The self-interest profit motive is mixed with community service and philanthropy. It is good public relations to the companies offering such “free” services. For governments, especially those that believe that the private sector should be the engine of growth, would see that indeed this can be the case if young entrepreneurs enter and take risks and promote new ideas. A private sector that is sheltered from the real world through subsidies, tariffs and quotas will, in the long run, not be able to stand on its feet compared to a private sector that started off though enterprise, innovation and risk taking.

The national youth dialogues held in Saudi Arabia were good starting points to promote youth and their aspirations. However, society in general needs to empower them with the means to achieve their aspirations. Funding incubators, sponsoring student’s projects, providing free advisory services by our banks and lawyers, as well as leading businessmen, will demonstrate commitment to youth in a meaningful way. It costs nothing but putting in the time and goodwill, but the effect in the long term can be truly astonishing and beneficial to society as a whole.

(Dr Mohamed A. Ramady is visiting associate professor, finance and economics, at King Fahd University of Petroleum and Minerals.)

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