Entrepreneurship in Saudi Arabia has reached an all-time high, especially with the introduction of the entrepreneurship license. Thus, making it easier for foreigners to open startups in the Kingdom. The entrepreneurship ecosystem has fittingly grown to improve the opportunities available for entrepreneurs, with the number of organizations aimed to support entrepreneurs, financially and non-financially, tripling from 2006 to 2015. We see the largest support network in Riyadh (54%) and Jeddah (29%), followed by Dhahran (10%) and Makkah (8%).
Opportunities available for entrepreneurs in the Kingdom is simultaneously increasing as the government aims to diversify the economy away from oil and modernize the country with Vision 2030 plan. The government have created almost half the organizations born to support entrepreneurs, to help grow the economy.
Hada Fadel, chair at the MIT Enterprise Forum and founding organization for the Arab Startup Competition noted, “What was quite noticeable this year is that Saudi Arabia used to account for 5 percent of total applications and it is at about 20 percent this year,” Fadel says. “So there is a huge jump.”
The challenges that exist for entrepreneurs in the Kingdom are actively being addressed by the Saudi government as they aim to attract entrepreneurs to Saudi. The main barriers to entry for entrepreneurs are regulations and bureaucracy, access to funding and access to talent.
The government address this through the introduction of the entrepreneurs license in November 2017 and the introduction of bankruptcy law. This law makes it simpler for companies who want to expand into the Kingdom by mitigating risk for startups. Government organizations that assist startups with funding and support have been established and job portals with advanced filtering systems to make finding talent easier. Where talents’ skills are in question, tertiary partnerships and initiatives have been established to develop the skills of upcoming graduates and job-seekers.
As Saudi Arabia is an emerging market, there are many opportunities available, especially in the tech and media industry. Saudi Arabia consistently ranks as the most connected and engaged nation with 93 percent internet penetration and 73 percent smartphone penetration per capita. The media and tech industry are rapidly growing, largely due to a young population; with half the population below the age of 25.
Technology and innovation are a major goal for the government through the Vision 2030, with the government giving priority entrepreneur licenses to those bringing new and innovative ideas to the Kingdom. Significant opportunities lie in the tech industry, the following sub-industries have high growth potential; media and ecommerce, healthcare, cleantech, and edtech. Edtech is expected to grow approximately 8% annually in the region, bringing new opportunities for startups in the Kingdom; and in 2016 alone, the ecommerce industry grew by 37 percent.
This new wave of entrepreneurship in the Kingdom is only the beginning, with the government proactively cultivating the entrepreneurship ecosystem in the Kingdom to make it an easier and more attractive environment to enter.