By 2030, the population of Saudi Arabia is expected to reach 39.1 million, an increase of 24.1 percent from 2015. Such a high growth market offers many opportunities for its entrepreneurs. I wrote in 2010 that entrepreneurship enjoys a high-level of government support. Its investments are bearing fruit. Today’s younger Saudis are particularly entrepreneurial.
People under the age of 35 make up about half the population – they are increasingly applying their education and technical skills to seize opportunities created by the country’s dynamic consumer market. According to HSBC’s Essence of Enterprise Report, Saudi founders are on average 26 years old when they launch their businesses, which is younger than in most other countries. 63 percent of Saudi business owners are under the age of 35. The country may very well have the world’s youngest successful entrepreneurs.
“Saudi entrepreneurs are focused on the local Saudi market, and 40 percent of founders are women,” says the moderator of my panel today Ahmed El Alfi, founder of Flat6Labs, which has accelerator programs throughout the Middle East.
Another sign of increased entrepreneurial dynamism is how the number of Saudis who applied to participate in the MITEF Arab StartUp Competition continues to rise. Before this year, the Kingdom usually accounted for about five percent of total applications, but this year it was 20 percent. The final winners’ ceremony was hosted by the King Abdulaziz City for Science and Technology (KACST), which, since it was founded in 1977 has become a central launch pad for new ventures.
During my day in the Kingdom, I heard about and connected with many other programs and initiatives that support early-stage entrepreneurs including: Qotuf – qotuf.com; King Abdulaziz City for Science and Technology (KACST), Badir (a KACST program for that supports innovation, entrepreneurship and technology through incubators and other initiatives – badir.org.sa; Sirb (a KACST-sponsored angel investment network that finances early-stage start-ups); King Abdullah University of Science and Technology (KAUST); Hikma IP and New Ventures (two KAUST-operated startup accelerators) and the National Entrepreneurship Institute (Riyadh) – riyadah.com.sa.
No doubt these institutions and programs are just part of the story.
The Global Entrepreneurship Index reveals that Saudi Arabia’s ecosystem has world class strengths in Start-up Skills and High Growth oriented start-ups. Its most significant bottlenecks are in Process Innovation and Technology Absorption. Estimates are that improving the conditions for entrepreneurs by 10 percent would likely add upwards of U.S. $139 Billion to the Saudi economy.
While Saudi Arabia is known for its vast energy sector, entrepreneurship is now making a significant contribution to the Saudi economy. Startups are emerging in a wide variety of sectors – from media, to solar energy, to education, to food services – as seen in a recent Forbes listing of the 100 startups that are shaping Saudi Arabia’s future. A virtuous cycle is gaining momentum. Successful founders become investors and mentors to new startup teams (who are often spinning out from successful startups) generating increased entrepreneurial dynamism. Government policies, human capital, and support services (networks, angel investors, venture capital groups, etc.) are becoming institutionalized and – according to a study by Yusuf Nadia on the role of entrepreneurship in the Kingdom’s economic development published this past March – “entrepreneurship is becoming an engine of economic growth, a catalytic agent for expansion and promotion of productive activities in all spheres of economic life in every part of the country.”
GEN plans a major expansion in Saudi Arabia in 2017 in collaboration with the recently formed General Authority For Small And Medium Enterprises under the leadership of my old friend Dr. Ghassan Al-Sulaiman, who will serve as Governor. We are excited about expanded partnerships with Shell and Badir and look forward to further enabling entrepreneurship as a driver of global engagement in the Kingdom by opening GEN Saudi Arabia next year.
My assignment today was to speak at the MISK Global Forum which enabled GEW in Saudi Arabia to be celebrated in style with young nascent entrepreneurs hearing from the likes of Dave McClure, Middle East startup expert and author Chris Schroeder, Muhammad Yunus and some extraordinary youth and women leaders from throughout the Gulf.
And to cap it off, I was honored to be able to end my visit here in style with a dinner party hosted by the Deputy Crown Prince Mohammad bin Salman Al Saud at his Palace with Dr. Majed Al-Kassabi, Minister of Commerce & Investment and other ministers. We were joined by my fellow panelist Silicon Valley investor Joe Londsdale of 8VC, Joshua Steiner from Bloomberg, former NBA star Dikembe Mutombo, Christiane Amanpour and Becky Anderson from CNN; Cisco founder and Executive Chairman, John Chambers; BP CEO Bob Dudley and from the UAE, the world’s youngest Minister Shamma Al Mazrui.
With this level of knowledge, relationships and communities, I am optimistic that entrepreneurship will play its role in helping Saudi Arabia reach its 2030 goals.