How can entrepreneurship drive the economic growth in the GCC, specially after the last price drop?

Is entrepreneurship the answer to the serious problem of youth unemployment in the Gulf Cooperation Council region? One of the key questions preoccupying GCC governments is how to create more jobs for young people and how to make productive use of their wasted potential. Almost half of the GCC population is under 25 years old and there is major concern about the rising number of unemployed young people in the region and the huge socio-economic impact this is having on the economy and stability. GCC governments are increasingly looking toward entrepreneurship as a tool for youth empowerment and a key for generating employment. Micro and small and medium-sized enterprises (SMEs) are now a driving force behind new job opportunities for young people. They are a good source of income, a means for overcoming poverty, and a tool in stimulating sustainable development. A big challenge for GCC youth is how to transform new business ideas into reality. Efforts are being made in GCC countries by both public and private sectors to boost their entrepreneurship, direct young men and women in the labor market, and train them as future job providers. For example, in Bahrain, Injaz Bahrain plans to train 52,000 students by 2014 in business and entrepreneurship, and Tamkeen Bahrain has launched the “Wehda Wahda” campaign to support creative entrepreneurs. The National Youth Program in Kuwait supports young Kuwaitis in entrepreneurship programs and the Civil Service Commission approved the establishment of a new SME department. Wataniya Telecom’s “Give Kuwait” campaign holds an annual exhibition for young Kuwaiti entrepreneurs to showcase their ideas and products for free. Sharakah, the Oman Fund for Development of Youth Projects, is the leading entrepreneurial fund for SMEs and provides funding and expertise for young Omanis to start their business. The Qatar National Vision 2030 focuses on promoting youth entrepreneurship with easy access to training and funding. Qatar Development Bank provides lending to small businesses, and Enterprise Qatar supports the development of SMEs. An Executive Entrepreneurship Certificate Program has been launched to become an incubator for local businesses and entrepreneurship. Qatar-based Silatech, which focuses on youth microenterprise support, has teamed with Kiva, the world’s largest online micro lending platform, to launch Kiva Arab Youth. In Saudi Arabia, Custodian of the Two Holy Mosques King Abdullah has earmarked $ 54.4 billion from the 2013 budget for education and training for young Saudi nationals. The Human Resource Development Fund provides funds for young entrepreneurs through banks and other financial sources. The non-profit Centennial Fund supports youth entrepreneurship mainly in rural areas with loans and mentoring services for up to three years. More than 3,447 entrepreneurial projects have been managed by the Fund at a cost of $ 195.5 million in 180 towns and villages. The Fund also plans to boost SMEs. The Saudi Arabian General Investment Authority launched the Saudi Fast Growth 100 to measure the fastest growing companies in the country within the smaller-sized corporate segment of the Saudi economy. Saudi Aramco launched the initiative “Wa’ed” to encourage individuals to explore their entrepreneurial potential by providing expert guidance and tools to improve their business. The King Abdullah University for Science and Technology offers a program to support start-ups in technical fields and Queen Effat University launched a chair to encourage and train young Saudis to contribute in entrepreneurship. Bab Rizq Jameel helps generate employment opportunities for young men and women in Saudi Arabia by identifying job opportunities and providing training and grants and loans for entrepreneurial businesses. It generated more than 320,000 jobs across the region and was awarded “Best Initiative to Support Entrepreneurship in the Arab World” at the 2012 Global Entrepreneurship Summit in Dubai. A major objective of the UAE 2013 Dubai budget is to promote young Emirati entrepreneurships and establish a public benefit fund to support SMEs, creating 1,600 jobs. The Dubai government supports entrepreneurs through the Mohammed bin Rashid Establishment for Young Business Leaders, the Mohammed Bin Rashid Awards for Young Leaders and the Mohammed bin Rashid Al Maktoum Foundation. Abu Dhabi University launched an Entrepreneurship Center to support innovation and development of businesses. And recently, Dubai broadcast a local television show, The Entrepreneur, to promote entrepreneurship, with an initial 100 contestants gradually whittled down to one winner. These are all laudable efforts to address youth unemployment issues through entrepreneurship support but are they enough? There are still cultural and financial barriers inhibiting young people from starting a business: they are hesitant to take up an apparently risky activity such as entrepreneurship and prefer a secure job in the public sector, even though there are no longer sufficient public sector jobs available. Independent entrepreneurship is still not seriously supported by banks who do not want to risk their capital. Generating youth employment will be successful only through the promotion of a positive and dynamic entrepreneurship culture among young men and women. As well as giving entrepreneurship priority on a national policy agenda, awareness has to be raised on the opportunities and challenges of entrepreneurship through a national marketing campaign. One way to encourage the young to see entrepreneurship as a valid career choice is to incorporate entrepreneurship education and training in the curriculum at secondary, vocational, tertiary and university levels. This will help to initiate young people in the world of business and entrepreneurship, and teach them how to start a business. But as well as equipping them with basic entrepreneur skills, schools also need to develop the entrepreneurial spirit and qualities of young people such as responsibility, efficiency, self-reliance, flexibility, and foster lateral thinking, creativity, imagination, and innovation. Entrepreneurship centers for training and research development can be established at university levels. Both public and private sectors should equip youth with training, business development services and access to information and computer technology, and encourage them to grasp the challenges in the field of entrepreneurship. Furthermore, because affordable capital is required to build sustainable business, GCC governments should smooth the path for young entrepreneurs by providing easier access to credit and funding; one example is Saudi Arabia’s granting of partial guarantees to SMEs. Increasingly, women in the GCC region are aspiring to become entrepreneurs through small and micro enterprises and with the unemployment rate greater for young women than for young men, special focus should be put on encouraging women entrepreneurs. Sadly, they are still under-represented in the region’s entrepreneurship as men not only have more knowledge, experience, and skills, but they also have easier mobility and access to funding and credit. According to a Gallup research survey (March 2011-January 2012), the percentage of women who own a business reaches only 6 percent in Qatar, 3 percent in Bahrain, and a paltry 2 percent in Kuwait, Saudi Arabia and UAE. And although 32 percent of women in Qatar are planning to set up a business in the next 12 months, the figures are still very low for Bahrain, Kuwait and UAE (4 percent) and Saudi Arabia (2 percent). This shows that Qatar is moving rapidly toward creating a strong entrepreneurial youth culture. It is essential to remove the traditional cultural barriers that inhibit GCC women from starting their own business and support them with funding, training and access to business mentors. Exclusive services should be developed through strategic affiliations and networking to provide them with necessary tools for their business. There is no doubt that women can grasp the entrepreneurship challenge and win. In November 2012, 18 young Saudi women students competed against other students from across the Arab world in the Injaz Al-Arab Young Entrepreneurs Competition in Doha. And they won! Their invention was “Without Limits,” a smart bag that can be opened only with personal fingerprints. It can store up to 16 fingerprints for each bag. In 2012, a prestigious start-up competition covering all of the Middle East, the MIT Business Plan Competition, was held in partnership with the Saudi Abdul Latif Jameel Community Initiative. Events like this empower and motivate young people, providing recognition and mental support. Significantly, nearly half of the teams included women.

I agree with MR VINOD JETELY  and i can,t add any thing

According to the IMF forecasts, the current oversupply in the global oil market suggests that GCC may face challenges in maintaining market share, with potential downside pressures on oil production. Government spending and hence non-oil activity may slow down by more than expected. The normalisation of US monetary policy is expected to tighten financial and monetary conditions in the region, especially in the GCC, although the pass-through is expected to be slow and partial. For countries that are highly dependent on foreign funding such as Bahrain, Oman, Yemen, financing and rollover risks may raise, the IMF said. “We do not expect the gradual rate normalisation in the US to have any big impact on project funding across the GCC. In UAE and Dubai we see most near to medium term project funding requirements have been covered and do not expect any disruptions.

agreed with the expert's answers...

by planing and focus on human power and how improve them

 

during the recession of USA, many small business took contracts for KFC, burger king, and McDonald, as well other low price food service increases, people started going there since they can't afford going to expensive restaurants, and these restaurants closed down due to economic, so, this is what will happen, many people will start losing their jobs in big companies, foreigners will be layout due to low income, and there will be increases in small businesses since it's perfect information flow that easily can get access and apply, the increase of these small business won't be able to affect the GCC citizens, that because of the problem of they would hire cheaper employees, and more affordable, sadly it wouldn't be as much difference since most of these employees save up money and do not spend it, that would immediately send the money to their country, and honestly I don't see  where this could help, if the money rotate within the country atleast even with the recession it would keep on going of maintain the money flow.

 

that would be in economic prospective.

Appreciate you invitation,

Totally agree with Mr. Vinod's answer

Hi

it is a very interesting question, and i am sure that many will answer it in a way that makes you tired of reading the coments board, but many of what has been said here is the economical facts on papers and in books but i am sure you asked this question to get a better and easier answer.

Alright then, let me tell you this shortly.

The arab area since long time past and present, have been heavely influenced by the west, in terms of un healthy relationships, that benefited the west more than the east, and as a matter of fact it is destroying the east slowly, which amazingly, i am not sure how the arabs haven't yet figured this out by now, and most amazingly, is that they continue on the same path under the banner of false democracy and globalization.

As a matter of fact, if you ask anyone on the streets, if he or she feels there is a real difference in all the promisses been given so far if it ever was effective or made there lives better, the answer i am sure will shock you.

For the enterprenuer in the gulf area to manage a future on the market, he or she must start from now on to plan correctly, the whole business, meaning.... When you look at large and small businesses nowadays, what strikes your attention most??????

they are as following;

1-Most of them are a repettive of the concept if not with added on or a copy cat but in a different way

2-Many enterprenuers dont think in forehand about future prospective growth in the real time 4D

all they think about is now and how will i make a profit and how will i expand, and how will i become a monopolist if possible....etc

3-when opening a business, you would see that it targets the best on the market, with invested higher costs to keep this image ever growing, of course it is good but without thinking of both the lower and middle class the idea is like blowing on a baloon..and you enjoy looking at it streatching and getting bigger, but without noticing you are about to blow it up into pieces... this is what is noted today where many big businesses started big and did not accurately calculate the expansion outcome on the consumer and on the market....

4-Many businesses are focusing on high end brands, because first it gives a prestigious look and second it filles your wallet, but what the enterprenuer did not notice or think, is that,

you are driving the market to its red line by relying on imports and more lux imports and even extra more lux projects to give lux imports for the arabs, this is today what we suffer from

more imports and less local production, giving higher costs for end user and creating more jobless market, because today everything is about imports to satisfy the high end users..

what about the rest of the people??????

have anyone thought about them..yes..only on media and some projects which are still on papers OR... it exsists but hey... not everyone will get it as u think it is...

 

To make a difference in a life of people you and everyone else need to stop simply, this whole lux mania

and think of creating real time opportunities for the little ones who are coming up the ladder or on the way to it, how????

simple answer, yet no one is doing it real time...

START TO PLAN YOUR BUSINESS TOWARDS THE USE OF THE COUNTRY LOCAL PRODUCE

AND RELY LITTLE ON CERTAIN LUX PRODUCTS, IN ANOTHER WORDS.. CREATE A BALANCE

if we all do this, we will have an increase in growth, and more factories will start thinking and producing local goods of high quality to even compete with the west

we simply need to work from inside out not vice versa... this idea of making a lux future so fast and rapid is breaking the community a part.. because many people are still under the red line and they need to climb slowly, they cant face it by all of sudden raise on prices and energy and cuts here and there and higher interest rates and everything is imported...

we are killing the future of our generations by building castles in the air and making them forget who they are, the arabs one day gave the world a wealth of knowledge..

today, the arabs are begging the knowledge from the west????????/

today there are untrained labor force

bad education system that gives all the chance of learning properly even with little income

opportunities are becoming rare in there eyes, creating more unemployment and also unsocial behaviours in the comunity.

 

finaly and sorry taking long...

the answer is..

all enterprenuers need to recalculate the way how they decide on there business path

to ensure it operates the local producers and also gives opportunity for the rest to re open the doors for production yet creating growth in the comunity and more opportunities to benefit everyone

it's time for everyone to re asses his and her priorities with a focus on the country to develop with less help from west...

growth needs respect of traditions and a look into advanced methods for living, but without compromising the real tradition upon which the real us (humanity) started with.

this is the final puzzle answer to you which i need you to think of it

 

imagine a fisherman, who heared of large fish on another island and he is so greedy to make more money so he sails all the way down to fish this large ones, risking even his life to get such a catch, and when he does, he goes back and sell them at high profit, while others cant pay the price, but he never listens, he even became more greedy, that he let all his worlers out and kept only a cheep guy from another village to help him, and now he makes less catch more money but he created more hungry people and poor people with no work, he even claimed the shores of his own, and created extra charges on who wants to fich localy... more people became poorer and poorer because one day

the rich ones managed to build a bridge to the other island and they found that he is of no more use to them, so they throw him out and dectated more foreign rich guys to over take the island and the other ones.... he sat alone sad thinking to himself

HAD I BEEN NOT GREEDY, HAD I THOUGHT OF THE OTHERS AS WELL, WE WOULD HAVE HAD BENEFITED ALL AND THIS WOULD NEVER HAVE BEEN MY FATE

Looking to anther cost mets to sold the products as other countery did if you don't me what I want I will change the deal with you to get the best price and best deal contract rolls Or keep my product here and put the price on and ask the customers to computation

Based on the REVISED development strategies.

In my opinion the regions where is vast amount of joblessness should encourage SME (Small Medium Entrepreneurs).As population is increasing at the exponential and industry cycle are showing downward trend.Through encouraging SME and granting SME loans the self employment will be encouraged. 

 

Drop in Oil prices will have not effect only GCC but whole world.With recent oil being traded at 27 $ barrel is indicating another bad recession.