Forty-two percent of Saudis plan to launch their own businesses within the next three years, according to the National GEM Report 2024-2023. This report, which highlights the Kingdom’s economic advancements and promising opportunities, particularly emphasizes the role of women entrepreneurs. It was launched during the ongoing Biban24 Forum, organized by the Small and Medium Enterprises General Authority (Monsha’at) under the theme “A Global Destination for Opportunities,” running from November 5 to 9 at the Riyadh Front for Exhibitions and Conferences.
Thriving ecosystem for early-stage businesses
The report marks the highest level of entrepreneurial intentions seen in eight years, signaling a growing interest in innovation and self-employment. It showcases a vibrant entrepreneurial ecosystem at every stage. The data indicates a robust one-third increase in the number of early-stage businesses (those operating for less than 42 months) compared to 2022, with this segment now accounting for 25 percent. Furthermore, established businesses are thriving, with Established Business Ownership (EBO) surging by an astounding 40 percent to reach a record high of nearly 14 percent.
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Focus on social and environmental impact
Another notable trend highlighted in the report is the strong focus on social and environmental impact within the Saudi entrepreneurial landscape. This aligns closely with Saudi Vision 2030 and the ongoing initiatives of the Saudi leadership. According to the 2023 GEM data, an impressive 80 percent of entrepreneurs and 84 percent of established business owners prioritize social and/or environmental considerations alongside profitability and growth.
Challenges in entrepreneurial ambition
Despite the rise in entrepreneurial ambition and activity, the report notes a continuing challenge: the fear of failure. While a significant 93 percent of Saudis recognize ample opportunities for starting businesses, over 57 percent of those who see these opportunities admit that fear of failure could deter them.
Economic diversification
Dr. Zeger Degraeve, dean of MBSC, stated that the latest national report reaffirms the ongoing progress of the Kingdom’s dynamic entrepreneurial ecosystem. He noted that as the economy diversifies, the supportive environment fostered by Saudi Arabia acts as a catalyst for the growth of SMEs. He expressed optimism about the findings of the report but also emphasized the responsibilities that come with it, asserting that MBSC is committed to nurturing Saudi Arabia’s next generation of transformative leaders, equipping them with the essential knowledge and entrepreneurial mindset needed for success.
Support for SMEs
Professor Muhammad Azam Roomi, GEM Saudi Arabia team lead, echoed this sentiment by indicating that the eighth consecutive edition of the report highlights the Kingdom’s thriving entrepreneurial landscape, which reflects the ongoing diversification of its economy. He pointed out that Saudi Arabia’s unwavering support for SMEs serves as a critical engine for growth and emphasized that while the report fosters optimism, it also underscores the responsibilities that lie ahead.
Ongoing collaborative efforts
This report is part of the ongoing collaboration between MBSC, Babson Global, and Monsha’at aimed at enhancing entrepreneurship within the Kingdom by establishing a comprehensive ecosystem that meets international standards and offers opportunities for both local and international entrepreneurs to tap into the burgeoning Saudi market.
The launch of the GEM report during the Biban24 Forum underscores the significance of the event as an international platform for exploring opportunities and fostering innovation. The report is anticipated to provide valuable insights for investors and decision-makers, aiding in the acceleration of emerging businesses and improving the investment climate in the Kingdom.
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