Is entrepreneurship the answer to the serious problem of youth unemployment in the Gulf Cooperation Council region? One of the key questions preoccupying GCC governments is how to create more jobs for young people and how to make productive use of their wasted potential.
Almost half of the GCC population is under 25 years old and there is major concern about the rising number of unemployed young people in the region and the huge socio-economic impact this is having on the economy and stability.
GCC governments are increasingly looking toward entrepreneurship as a tool for youth empowerment and a key for generating employment.
Micro and small and medium-sized enterprises (SMEs) are now a driving force behind new job opportunities for young people.
They are a good source of income, a means for overcoming poverty, and a tool in stimulating sustainable development. A big challenge for GCC youth is how to transform new business ideas into reality.
Efforts are being made in GCC countries by both public and private sectors to boost their entrepreneurship, direct young men and women in the labor market, and train them as future job providers.
For example, in Bahrain, Injaz Bahrain plans to train 52,000 students by 2014 in business and entrepreneurship, and Tamkeen Bahrain has launched the “Wehda Wahda” campaign to support creative entrepreneurs.
The National Youth Program in Kuwait supports young Kuwaitis in entrepreneurship programs and the Civil Service Commission approved the establishment of a new SME department. Wataniya Telecom’s “Give Kuwait” campaign holds an annual exhibition for young Kuwaiti entrepreneurs to showcase their ideas and products for free.
Sharakah, the Oman Fund for Development of Youth Projects, is the leading entrepreneurial fund for SMEs and provides funding and expertise for young Omanis to start their business.
The Qatar National Vision 2030 focuses on promoting youth entrepreneurship with easy access to training and funding. Qatar Development Bank provides lending to small businesses, and Enterprise Qatar supports the development of SMEs. An Executive Entrepreneurship Certificate Program has been launched to become an incubator for local businesses and entrepreneurship. Qatar-based Silatech, which focuses on youth microenterprise support, has teamed with Kiva, the world’s largest online micro lending platform, to launch Kiva Arab Youth.
In Saudi Arabia, Custodian of the Two Holy Mosques King Abdullah has earmarked $ 54.4 billion from the 2013 budget for education and training for young Saudi nationals.
The Human Resource Development Fund provides funds for young entrepreneurs through banks and other financial sources.
The non-profit Centennial Fund supports youth entrepreneurship mainly in rural areas with loans and mentoring services for up to three years.
More than 3,447 entrepreneurial projects have been managed by the Fund at a cost of $ 195.5 million in 180 towns and villages. The Fund also plans to boost SMEs.
The Saudi Arabian General Investment Authority launched the Saudi Fast Growth 100 to measure the fastest growing companies in the country within the smaller-sized corporate segment of the Saudi economy.
Saudi Aramco launched the initiative “Wa’ed” to encourage individuals to explore their entrepreneurial potential by providing expert guidance and tools to improve their business.
The King Abdullah University for Science and Technology offers a program to support start-ups in technical fields and Queen Effat University launched a chair to encourage and train young Saudis to contribute in entrepreneurship.
Bab Rizq Jameel helps generate employment opportunities for young men and women in Saudi Arabia by identifying job opportunities and providing training and grants and loans for entrepreneurial businesses.
It generated more than 320,000 jobs across the region and was awarded “Best Initiative to Support Entrepreneurship in the Arab World” at the 2012 Global Entrepreneurship Summit in Dubai.
A major objective of the UAE 2013 Dubai budget is to promote young Emirati entrepreneurships and establish a public benefit fund to support SMEs, creating 1,600 jobs. The Dubai government supports entrepreneurs through the Mohammed bin Rashid Establishment for Young Business Leaders, the Mohammed Bin Rashid Awards for Young Leaders and the Mohammed bin Rashid Al Maktoum Foundation. Abu Dhabi University launched an Entrepreneurship Center to support innovation and development of businesses. And recently, Dubai broadcast a local television show, The Entrepreneur, to promote entrepreneurship, with an initial 100 contestants gradually whittled down to one winner.
These are all laudable efforts to address youth unemployment issues through entrepreneurship support but are they enough? There are still cultural and financial barriers inhibiting young people from starting a business: they are hesitant to take up an apparently risky activity such as entrepreneurship and prefer a secure job in the public sector, even though there are no longer sufficient public sector jobs available. Independent entrepreneurship is still not seriously supported by banks who do not want to risk their capital.
Generating youth employment will be successful only through the promotion of a positive and dynamic entrepreneurship culture among young men and women.
As well as giving entrepreneurship priority on a national policy agenda, awareness has to be raised on the opportunities and challenges of entrepreneurship through a national marketing campaign.
One way to encourage the young to see entrepreneurship as a valid career choice is to incorporate entrepreneurship education and training in the curriculum at secondary, vocational, tertiary and university levels.
This will help to initiate young people in the world of business and entrepreneurship, and teach them how to start a business.
But as well as equipping them with basic entrepreneur skills, schools also need to develop the entrepreneurial spirit and qualities of young people such as responsibility, efficiency, self-reliance, flexibility, and foster lateral thinking, creativity, imagination, and innovation. Entrepreneurship centers for training and research development can be established at university levels.
Both public and private sectors should equip youth with training, business development services and access to information and computer technology, and encourage them to grasp the challenges in the field of entrepreneurship.
Furthermore, because affordable capital is required to build sustainable business, GCC governments should smooth the path for young entrepreneurs by providing easier access to credit and funding; one example is Saudi Arabia’s granting of partial guarantees to SMEs.
Increasingly, women in the GCC region are aspiring to become entrepreneurs through small and micro enterprises and with the unemployment rate greater for young women than for young men, special focus should be put on encouraging women entrepreneurs. Sadly, they are still under-represented in the region’s entrepreneurship as men not only have more knowledge, experience, and skills, but they also have easier mobility and access to funding and credit. According to a Gallup research survey (March 2011-January 2012), the percentage of women who own a business reaches only 6 percent in Qatar, 3 percent in Bahrain, and a paltry 2 percent in Kuwait, Saudi Arabia and UAE. And although 32 percent of women in Qatar are planning to set up a business in the next 12 months, the figures are still very low for Bahrain, Kuwait and UAE (4 percent) and Saudi Arabia (2 percent). This shows that Qatar is moving rapidly toward creating a strong entrepreneurial youth culture.
It is essential to remove the traditional cultural barriers that inhibit GCC women from starting their own business and support them with funding, training and access to business mentors. Exclusive services should be developed through strategic affiliations and networking to provide them with necessary tools for their business. There is no doubt that women can grasp the entrepreneurship challenge and win. In November 2012, 18 young Saudi women students competed against other students from across the Arab world in the Injaz Al-Arab Young Entrepreneurs Competition in Doha. And they won! Their invention was “Without Limits,” a smart bag that can be opened only with personal fingerprints. It can store up to 16 fingerprints for each bag.
In 2012, a prestigious start-up competition covering all of the Middle East, the MIT Business Plan Competition, was held in partnership with the Saudi Abdul Latif Jameel Community Initiative. Events like this empower and motivate young people, providing recognition and mental support. Significantly, nearly half of the teams included women.
I asked two young Saudi entrepreneurs in Riyadh to sum up their entrepreneurship experience. Abdul Aziz (25 years old), who runs a sandwich business, said: “In life, opportunities come and go. Take what God gives you. If you can start your business, don’t miss this unique chance. Persevere and just go after your dream.”
Nora (24 years’ old) has a catering business at home and said: “You must love what you are doing. If you work only for money you will never succeed. Even if you don’t get money immediately. Never give up. There are ups and downs … there are also risks … but it is still worth it.”
There are thousands of potential young entrepreneurs like Abdul Aziz and Nora throughout the GCC region. With top-down leadership, providing them with the right education, opportunities, and support will enable countries to tap this huge resource and make entrepreneurship a stimulus for prosperity.
Dr. Mona S. AlMunajjed is a sociologist, author and adviser on social and gender issues. (mona.almunajjed @gmail.com)
