Being an Entrepreneur in the Gulf

Being an Entrepreneur in the Gulf

  • There are numerous challenges in the Gulf blocking the entrepreneurship path for development.
  • Entrepreneurship is about leading, accepting high levels of risk and living up the challenge.
  • Gulf governments are not doing enough to support gulf entrepreneurs; albeit some good initiatives.
  • Entrepreneurship should be looked at as an integral part of the economy, leading to innovation and job creation.

For those of us who have studied abroad, being an entrepreneur in the Gulf has its own set of challenges. I still remember the first six months I spent in Kuwait after coming back from Denver in 1999. Everything was so different from what I had become used to. It felt like being in another universe. Not only was I suffering from reverse culture shock, but I was also surprised at how different my expectations had become. Coming from a place where you can get anything done over the phone or by email in a matter of hours or days to a place where getting anything done takes months, requires your personal presence, and involves a lot of paperwork. I had to completely readjust to my new reality and reassess my priorities.

At the time the best way to grow was to join a large company. Starting a business was very risky at the turn of the millennium and you couldn’t do it as your main source of income. I literally made good use of the phrase “Don’t put all your eggs in one basket.” If I learned anything about diversification it was to mitigate the risk of a high probability of failure for startups. As I uneasily joined the rest of the country in looking for a secure job, I began to wonder how I could pursue my own personal dream without the necessary ingredients to do so. Having a good idea simply wasn’t enough. The lack of the necessary entrepreneurial infrastructure and a clear path for startups meant that even the best of business plans would face enormous risks. But what is an entrepreneur if not someone who has a proclivity for risk-taking?

Entrepreneurs are contrarians by nature and always go where everyone else says there is nothing to go to. But even contrarians have their limits. Entrepreneurs are generally creative, extroverted, risk-takers by nature and they tend to see opportunity where others do not. The only way to have more of them is to reduce the impending risks that they have to overcome. This is where governments need to step up their efforts. The Gulf countries have undergone a drastic modernization phase over the past sixty years to catch up with the rest of the developed world. Obviously there are still significant issues in the developed world that remain to be overcome—one of them being the lack of a sound ecosystem for entrepreneurs to thrive in.

The Gulf countries that control the largest oil reserves in the world—with billions of dollars in revenue—certainly have no shortage of funds. With such huge surpluses accumulating over the years, there was no urgency to cultivate the private sector or free enterprise. People who traditionally had small businesses saw a better opportunity in a safe government job. When the governments provided more than people’s needs while the cost of living was cheap it tipped the risk-return equation in the favor of a safe job. Those with larger businesses were better positioned to take part of the growing petro-economies. The result is a huge government sector with a few very large family oligopolies controlling the rest.

The Gulf, for the most part, is tax-free. Therefore, the governments have no real incentive in maximizing tax revenue. Cultivating small businesses was low priority because there was no added value. As the population grows, with the biggest chunk under the age of 25, the cracks in the system are beginning to show. The increase of cost of living over the years through inflation as well as an increase in jobless figures means that the only way governments can sustain the storm is through the proactive development of SME’s. More importantly the governments need to provide the right ecosystem for entrepreneurs. A focus on the needs of entrepreneurs would lead to job creation and, eventually, a good tax revenue source that would benefit the whole economy.

Four essential elements are needed:

  1. Ease of setup
  2. Funding
  3. Skilled labor
  4. Real estate

Entrepreneurs can’t be created out of thin air. It takes time to cultivate entrepreneurship. But reducing barriers to entry and risk levels would be taking huge steps toward cultivating that entrepreneurial spirit. However, there are some very good initiatives in the Gulf such as Thukhur for Entrepreneurship & Corporate Innovation, the national program for entrepreneurs in Kuwait and Dubai SME, a Department of Economic Development agency in Dubai. These programs not only build the foundations for entrepreneurs, but also serve to motivate new entrepreneurs by highlighting the success stories and the importance of entrepreneurship in society.

Entrepreneurs have been and will always be the driving force in an economy. I took the rough road to building my business and despite how difficult it was, I would do it all over again without hesitation. It’s not just the money, it’s the satisfaction of creating something out of “nothing.”

The article is written by Basil Al Salem for Arab Business Review

To read more thought-leadership stuff by leaders from Arab Region, please visit Arab Business Review

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