Saudi Arabia, An Entrepreneur’s Dream?
Did you know that Saudi Arabia is ranked number one among the G20 group of the world’s biggest economies in terms of how its taxes and regulations impact entrepreneurs? Even more, it is considered as one of the top 15 countries in the G20 in terms of its overall entrepreneurial ecosystem.
These statistics were recently released by Ernst & Young’s G20 Entrepreneurship Barometer 2013. In fact, Saudi Arabia is in the same quartile as three of the four BRIC countries (Brazil, China and Russia), as well as Mexico. And it is ahead of countries in the fourth-quartile like Turkey, India, Indonesia, Italy and Argentina.
This is great news for the Kingdom and a source of encouragement for all Saudi entrepreneurs. Why? Because, as the report states, entrepreneurs are great job creators. They supplied 67% of all new EU jobs in 2012 and 75% of all new jobs in China. They provide one of the main engines of growth for healthy economies. Also, they create world-leading companies, turn ideas into innovations, support local communities and build prosperous societies.
The report identifies five key pillars of entrepreneurship: taxes/regulation, funding, support, training and culture. Saudi Arabia ranks highest with regards to tax and regulation – not surprising given its low- to zero-tax environment, but that also fits with its top-25 ranking in the “Ease of Doing Business” index compiled by The World Bank.
The Kingdom ranks right in the middle in the areas of access to funding, education and training and coordinated support. So… if it’s doing so well in these areas, why isn’t it ranking higher? Because it’s right at the very bottom when it comes to entrepreneurship culture.
One of the key criteria in defining entrepreneurship culture is the “stigma of failure,” a barrier that is well known to those working in the field of entrepreneurship in the region. It was cited in 2010 in the “Celebration of Entrepreneurship” conference, in the 2011 report on “Accelerating Entrepreneurship in the Arab World” by the World Economic Forum, and in the 2013 report entitled “Unlocking Arab Youth Entrepreneurship Potential” that reviewed the successes of the INJAZ Al-Arab program.
GE is actively working in the Kingdom to encourage entrepreneurship through its support for programs such as the Saudi Aramco Entrepreneurship Center (Wa’ed). Just last month, GE worked with Wa’ed to organize a Saudi Supplier Conference that brought 200 SMEs together as part of a broader effort to deepen the local supply chain in fields such as energy and oil & gas.
For more on how GE is working to support Saudi Arabia’s entrepreneurial ecosystem and broader economic competitiveness, click here.