By Nawaf Al Sahhaf / Arab News
With roughly two-thirds of its population below 30, Saudi Arabia is increasingly looking toward entrepreneurship as a tool for youth empowerment and a key to generating employment.
The focus has turned to entrepreneurship because the GCC countries, which depend on oil income, currently face stiff challenges in the wake of crude price volatility.
Entrepreneurship triggers economic development and contributes to the diversification of economies, spurring growth and job creation. Naturally, entrepreneurs strive for innovation that drives competitiveness and business success.
The tech startups environment in Saudi Arabia is thriving as a result of a range of converging factors driven by a rich and robust ecosystem of startups, investors, accelerators, incubators, business networks, advisory and mentorship platforms. Much of the credit for these strengths goes to the Saudi government.
Ever since the country embarked on the ambitious Vision 2030 journey outlined by Saudi Arabia’s Crown Prince Mohammed Bin Salman, there has been no looking back. The Kingdom made headlines after the Public Investment Fund, its sovereign wealth fund, acquired significant stakes in Uber, Lucid Motors and Magic Leap. All three ventures are symbolic of technological innovation at its helm. Furthermore, the PIF is a significant stakeholder in SoftBank’s Vision Fund, dedicated to technology ventures alongside Google, Amazon and others.
Over the last few years, the Saudi government has recognized the potential of entrepreneurs and invested heavily in creating a fertile ecosystem by implementing wide-scale public programs focusing on supporting startup technology companies.
The tech startups environment in Saudi Arabia is thriving as a result of a range of converging factors driven by a rich and robust ecosystem of startups, investors, accelerators, incubators, business networks, advisory and mentorship platforms.
The government has been taking proactive steps to build a robust infrastructure for entrepreneurs, encouraging innovation and fostering entrepreneurship. It has given special priority to the tech entrepreneurship sector, a key pillar of the diversification of national income sources, sustainable domestic economic growth, job creation, as well as strengthening the Kingdom’s capabilities for moving toward a post-oil economy.
A number of government agencies and companies have also been established to support the Saudi entrepreneurial ecosystem, which includes Business Incubators and Accelerators Company (BIAC), a unit of Saudi Technology Development and Investment Company (TAQNIA), which, in turn, is wholly-owned by the PIF. The Kingdom today has a thriving startup ecosystem with an increasing number of local venture funds as well as supportive regulatory frameworks. Institutions such as Mohammad Bin Salman College, MiSK Foundation, PIF Academy, KAUST Innovation and Economic Development and Saudi Aramco Entrepreneurship Center (Wa’ed) are enriching the entrepreneurship ecosystem. Other major government efforts to support the startup’s ecosystem have been the rise of accelerators and incubators such as the BADIR Program.
I have spent my life living, studying and working between Saudi Arabia and America. I am proud of Silicon Valley, which is not only the largest local pool of quality resources, but also combines them with a global resource attraction that is five times higher than the second most attractive ecosystem in the world, New York City. In 2017, a staggering $25 billion was invested into local startups.
As a Saudi, I have always noticed the untapped potential of the Kingdom and its love for technology and readiness to innovate.
Saudi Arabia has been easing regulatory impediments, including limits on foreign ownership that had long kept investors away, while seeking technology transfer through its $45 billion investment in Vision Fund. The government has even announced plans to create a futuristic $500 billion high-tech megacity, called NEOM, with more robots than humans.
The Saudi government is very well aware that startups need the right ecosystem to grow into businesses that can positively impact the economy and society. Yet, entrepreneurs still face various challenges when starting up such as regulations and bureaucracy, access to funding and attraction of top talents to the area.
The government is effectively addressing these challenges through the establishment of regulatory entities and initiatives to support entrepreneurs.
While Saudi Arabia is heading in the right direction in creating a strong entrepreneurship ecosystem, it needs to up the ante in making local startups visible and appealing to venture capitalists all over the world.