DAMMAM, 28 November 2007 — Business analysts at the Saudi Investment Forum, which concluded on Monday, said focusing on education and promoting entrepreneurship should remain on top of Saudi Arabia’s agenda in order to achieve sustained economic success and diversify the national economy.
“This country is endowed with a lot of resources,” said Rob Jones, editorial director of the Dubai-based financial news agency AME Info. “It has all the money in the world. Fear of failure should not stop businesspeople here from taking risks and launching new businesses and adopting new technologies.”
Jones said the Kingdom should stop being a “liquidity rich and risk averse” nation. “Saudi Arabia is not seen as a country that takes risks on ideas that may either develop into great money-spinners or may simply crash and burn,” he said. “A risk-averse culture means it is difficult for people to develop ideas, be that those they have suggested to the company they work for or ones they are trying to build themselves.”
Quoting a young delegate at the conference, which ended on Monday, Jones said: “The region is drowning in liquidity but thirsty for venture capital. The venture capital culture is severely lacking. It can feed ideas and bring those ideas into fruition.”
He said this was an issue in other regions as well, “where entrepreneurs would struggle to get an idea off the ground and develop it into a fully fledged business.”
However, Jones said, in many parts of the world it was now increasingly easy for people to get venture funding to develop ideas. “Take the UK for example,” he said. “People with ideas go on TV shows to sell them. In fact, they try to sell themselves. They convince people to invest money in them. That is how it works. That is how new businesses come into being. You have to put your money on best talents. People here have lots of ideas. But there is nobody to invest in these smart guys.” According to a delegate that Jones quoted, in Saudi Arabia people are more at ease sinking money into a property deal than taking a chance on an idea. “Perhaps it’s the trader mentality,” he said. “People cannot see the picture until it is painted.” Jones said Saudi Arabia should play to its strengths when it comes to funding venture capital. “While the government wants to shift away from a reliance on oil and gas, it has great experience in the energy sector and that experience can help spot a good idea and understand how to foster it into a business. It’s the industry that has to encourage entrepreneurs and ideas,” Jones said.
Gautam Ghosh, head of the Middle East Desk at the Federation of Indian Chambers of Commerce and Industry (FICCI), said the focus should be on education and training. “Their reliance on foreign labor is understandable, but they need to put more focus on their own population,” he said. “They should devise ways and means of making the most of their young population. And therefore education is important.”
However, he said, the focus should not be on just acquiring degrees. “They need to be an integral part of the system,” he said. “They need to do all kind of work, not just managerial jobs. Only then will they succeed.”
According to Ghosh, generous help from the government in the form of scholarships have robbed the Saudis of the hunger for success. But he acknowledged that Saudis have learned from the past. “There is a realization here that they have to think outside of the box,” he said. “That they should not squander the fruits of this second boom.”