Kingdom in Context: A Big Boost for Small Business
SME statistics are always fascinating. Recent numbers regarding small and medium enterprises (SMEs) from the IMF are no different. They show that SMEs comprise 98% of all businesses in the Kingdom, employ nearly two-thirds of the workforce and account for 25% of GDP.
In a country looking to diversify its economy, boost employment opportunities and enhance innovation and entrepreneurism, these numbers reinforce a growing trend by Saudi leaders to build up the infrastructure to support existing SMEs and help establish new ones. It’s a policy focus shared by governments around the region and the world.
The Kingdom already has results to show for its efforts. In just the past three months, the Kingdom has made a number of improvements to the business environment in support of SME. As well, a report by Jeddah-based Islamic-finance firm Capitas Group International says that Saudi Arabia has the largest number of public and private sector SME-support programs in the GCC. They include the KAUST Entrepreneurship Center, which offers incubation support and advisory services for entrepreneurs.
One of the newest and most exciting – in part because it is a wholly owned subsidiary of the world’s largest energy company Saudi Aramco – is the Saudi Aramco Entrepreneurship Center (Wa’ed). Established to be a major financier and incubator of new businesses in the Kingdom, it is helping grow a culture of entrepreneurship and will help further inspire the entrepreneurial ecosystem in the Kingdom. Wa’ed targets high-impact entrepreneurs and SMEs by providing financing through non-collateralized loans and equity partnerships, alongside end-to-end support.
GE is supporting the Center through a recently announced agreement to work with Wa’ed to further drive the Kingdom’s SME sector and develop a solid supply chain in manufacturing and services in the energy sector to meet the needs of local, regional and global customers. GE also will partner with the SMEs developed by Wa’ed to enhance their competencies as potential suppliers to GE in the energy sector.
This collaboration is particularly beneficial since one of Wa’ed’s major initiatives is developing SMEs in the energy sector. Wa’ed will work with GE to identify opportunities in the local market to develop new local start-ups and support the development of existing SME suppliers to expand and localize international suppliers.
For more on GE’s efforts to contribute to Saudi Arabia’s economic diversification, click here.