Entrepreneurship in the Kingdom of Saudi Arabia

Home » Research » What’s the big idea? Entrepreneurship in the UAE and KSA

What’s the big idea? Entrepreneurship in the UAE and KSA

July 20, 2011

Exclusive research from Kipp and YouGovSiraj has found more entrepreneurial drive among Saudis than in Emiratis while entrepreneurs remain skeptic about setting up online shopping. Precious de Leon reports.

 We’ve all dreamed of being our own boss at one time or another. And in the GCC, encouraging entrepreneurship has always been a priority. But how much of the government’s intentions are evident on the ground? For this next collaboration with YouGovSiraj, Kipp exclusively brings you the sentiments of residents in the UAE and Saudi Arabia when it comes to cultivating entrepreneurship in the GCC.

And you know what we found? Quite a few interesting things, actually. One of them is that there are more Saudi nationals (71 percent) intent on running their own business then there are entrepreneur-minded UAE nationals (48 percent). Seeing as a majority 34 percent of our Saudi respondents work in the government, it seems the private sector is almost completely bypassed by Saudi nationals, keeping Saudisation of the private sector a distant ambition.

Even with a lot of potential for growth in the SMB sector and with the existing SMB-related organisations, most respondents are still not convinced of the ease of setting up a new business in the UAE with about 66 percent saying it would be ‘somewhat or extremely difficult’. In fact, ‘strict government regulations’ is listed as the top barrier to entry into the SMB category. This is followed by the perception that there is a saturation of global brands in the market—which, in Kipp’s mind, is more indicative of consumers’ different sentiments toward local and global brands rather than the market’s actual level of saturation. (The infographic below shows you the rest of the list of barriers.)

This sentiment goes hand in hand with the perception that most of the support goes to nationals while there is still a lack of support for expatriates interested in opening a business in both Saudi Arabia and the UAE—a whopping majority 40 percent of all the respondents feel this way, in fact.

And when it comes to online, Kipp wondered: would most of the tech-savvy region bring a strong digital presence to their hypothetical business? Rather disappointingly for us as a digital title, a majority 37 percent say that while some sales might take place online, primary selling will remain through more traditional methods. Only 13 percent say they will sell purely online. Looks like we’ll be expecting more Mom N Pop stores in the future.

Besides staunch competition from brands with global muscle, entrepreneur wannabes are grounded in the importance of having availability of finance in their aspirations to open a business. Interestingly, all the respondents—expatriates and nationals alike—say the presence of a local sponsor and access to accurate industry information remain key factors to the success of setting up a small business in the region.

Is it time then to have a committee that liaises between entrepreneur, investor and government, Kipp wonders.



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