Saudi Arabia has arguably had one of its most path-altering few years in terms of business, economy and workforce. 2019 saw big steps serving the Saudization plan and Vision 2030, we saw the initial public offering of Saudi Aramco, as well as big steps towards increasing the number of women in the workforce. As the Kingdom moves to diversify away from its oil dependence, new reforms and regulations are helping small businesses emerge. The regulations still can be a challenge, but Saudi Arabia is on its way to foster a climate where social enterprises can prosper. The social entrepreneurship practice adopted by startup companies in which they approach the market through developing, funding and finding solutions for social, cultural or environmental issues is at a perfect time for Saudi Arabia as the country moves through change.
In the past, Saudi Arabia kept things traditional, and left very little room for change. However, since the announcement of Vision 2030 in 2016, the once conservative nation is providing numerous opportunities for foreign investments and promoting a stronger workforce, powered by its large population of young men and women. Many of the challenges of starting a business in Saudi Arabia have been improved, processes have been moved online and the time required reduced, new bankruptcy laws have been implemented and the Saudization requirements have been updated to make it easier for companies to manage compliance.
The Saudi government continues to solve logistic issues going into 2020. As of January 1, 2020, businesses are now able to acquire a license which allows them to open 24/7.
Social entrepreneurship will have a crucial role as part of the building blocks of the ‘New Saudi.’ The government facilitating the younger generation of thinkers and innovators will freshen up the business market and allow for Saudi culture to shine globally through its entrepreneurs. The social entrepreneurship practice delivers by providing solutions for current problems, and it is often a more cost-effective approach. Social entrepreneurs tackle real issues with business tools, and once profit is made, part of it is re-invested in similar ways in order to tackle other similar issues. There have been interesting examples of this recently. A female-led organization puts on a year-long fellowship to help other entrepreneurs develop their concepts and advance their ideas. Social entrepreneurs want to make an impact, and Saudi Arabia is providing the right culture for that.
For those entrepreneurs who are starting off small or with minimal investment, Saudi Arabia has issued an entrepreneurship license, attracting both locals and foreigners to establish their businesses, and making the number of companies that support entrepreneurs both financially and non-financially triple between 2006 and 2015. This shows the readiness in the Saudi ecosystem for entrepreneurship to prosper and grow.
Diversifying the economy will be accomplished by allowing social enterprises to grow and succeed and is aligned with all three of the main Vision 2030 themes; a society of young startup owners will be one that is vibrant. An economy built on the ideas and efforts of young, diversely talented Saudi’s will thrive. Ultimately, a generation of new thinkers and innovators with an affinity to make an impact is a steppingstone for an ambitious nation.