Your Voice: Mitigating entrepreneurs’ fears of failure
As part of Vision 2030, the Saudi government has made substantial investments in its entrepreneurial ecosystem.
How entrepreneurship is viewed — including whether it is seen as an attractive career choice — depends in part on social and cultural contexts.
According to the Global Entrepreneurship Monitor’s* National Entrepreneurship Context Index (NECI), evaluated across dimensions including entrepreneurial attitudes and norms, financing, and regulations, the Saudi Arabia’s performance has steadily improved since 2016. In 2022, Saudi Arabia secured second position overall out of 51 economies in the NECI. By comparison, the Kingdom ranked 54th out of 66 in 2016.
About 90% of Saudi adults recognize good business opportunities, concur that initiating a business is relatively easy, or acknowledge knowing entrepreneurs. Also, an impressive 88% of Saudi adults claim to possess confidence in their own abilities to embark on entrepreneurial endeavors.
Despite scoring favorably in many aspects related to attitudes and perceptions, a significant portion of Saudis continue to cite the fear of failure as a deterrent to starting a business. How could this fear be mitigated?
Factors such as enhanced knowledge of risk-management techniques, improved access to financing and talent, modifications in insolvency regulations, and greater promotion of successful entrepreneurial stories have all been identified as potential contributors to alleviating these constraints and, subsequently, fostering a sustainable increase in startup rates.
Fortunately, there are promising developments in this regard.
In recent years, the Saudi government has made substantial investments in its entrepreneurial ecosystem as part of the Kingdom's long-term developmental aspirations outlined in Vision 2030. These investments and efforts appear to be yielding positive outcomes. Notably, the government has streamlined the process of business establishment, extended loan repayment periods, and provided financial support.
Additionally, the government has actively supported the start-up ecosystem by sponsoring various initiatives that cultivate an entrepreneurial culture, such as the Entrepreneurship World Cup events and LEAP, a global technology event that enables entrepreneurs to present their ideas to potential investors.
All these initiatives have the potential to propel Saudi Arabia to top position in the GCC, which would mark a remarkable feat within a relatively short timeframe.
* GEM began in 1999 as a joint research project between Babson College (USA) and London Business School (UK). The consortium is a leading source of information on the state of entrepreneurship and entrepreneurial ecosystems across the globe.
— By Reem Alhashem and Sylvain Cote
(Editor’s Note: Your Voice reflects the thoughts and opinions of the writer, and not necessarily those of the publication.)