A clear picture has emerged of a resilient entrepreneurial ecosystem that continues to attract young minds seeking a foothold in the Saudi and Gulf Cooperation Council markets. Much has been said about the ways in which the coronavirus disease (COVID-19) has led to a reckoning for youth whose employment has been disrupted by the pandemic. Many have viewed this challenging time as an opportunity to incubate their next big idea and explore ways to make independent income.
One can expect that aspiring entrepreneurs, freed from the constraints of traditional employment and eager to tap into emerging industries, may accelerate an entrepreneurship boom in the Kingdom over the next few years. With Vision 2030 aiming to increase the contribution of small and medium enterprises to the Kingdom’s gross domestic product from 20 percent to 25 percent over the next decade, opportunities to establish new businesses and expand existing offerings are plentiful.
The Saudi population is a particularly entrepreneurial one, according to the 2019 Global Entrepreneurship Monitor report, which revealed that approximately 76.3 percent of adults in Saudi Arabia believed that promising opportunities exist to start a new business. Foreign companies have shared the sentiment that Saudi Arabia offers an ideal business environment, with low startup costs and tax incentives appealing to potential entrants.
Despite this year’s turmoil, the numbers tell an encouraging story: According to data released by the Saudi Ministry of Investment, 506 new licenses were granted to global companies during the first half of 2020, with the entrepreneurship, education, finance, and housing sectors claiming the top spots.
And while COVID-19 has temporarily put a damper on economic growth, Mohammed Al-Jadaan, Saudi minister of finance and acting minister of economy and planning, indicated that non-oil economic growth in 2019 ranged between 3 and 8 percent in the tourism, entertainment, and financial technology sectors.
Entrepreneurship is likely to play a major role in continued efforts to diversify the economy and expand market options.
- Madison Clough
The pandemic, which is likely to have long-lasting reverberations on the global economy, has certainly spurred efforts to encourage foreign investment and local entrepreneurship. As of September 2020, those seeking to establish a business in Saudi Arabia can benefit from the country’s leading business incubator, which offers the “Set Up in Saudi” platform to walk potential investors through the process of creating and maintaining a 100 percent foreign-owned business. Establishing a business in Saudi Arabia has never been easier or faster, and entrepreneurs are rushing to take advantage of new regulations as a result.
Moreover, in the midst of the Misk-hosted Entrepreneurship World Cup KSA national finals hosted this week, over 150,000 entrepreneurs from 200 countries came together to pitch their ideas and, in turn, receive hands-on mentorship, highlighting an enthusiasm undeterred by COVID-19. Saudi Arabia has rightly positioned itself as the gateway into the Gulf region’s economic potential, and the private and public sectors have joined hands to ensure that small and medium enterprises are not left behind. Against the pandemic’s backdrop, the Kingdom’s Social Development Bank announced plans to offer 6,000 entrepreneurs up to SR 2 billion ($533 million) to help them get their projects off the ground.
Saudi and foreign entrepreneurs have more tools at their disposal than ever before, with major mentorship and pitch initiatives in place to encourage the growth of entrepreneurship. While the pandemic has presented distinct challenges, it has lowered the barrier for entry and offered encouraging signs for those trying to break into the startup scene. Entrepreneurship is likely to play a major role in continued efforts to diversify the economy and expand market options. Aspiring business owners would be wise to consider how they can contribute to the economic recovery period, in turn growing their enterprises and overcoming challenges that call for extreme ingenuity and business savvy — two skills that will serve them long after the pandemic.
Madison Clough is a strategic communications professional residing in the Gulf. She holds a master’s degree in international security from George Mason University and specializes in communications on geopolitical and cultural issues.