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Looking for entrepreneurs, not excuses
A report released last week suggested that Gulf locals are averse to the idea of entrepreneurship, and attributed this to a combination of factors: cultural sensibilities that mean entrepreneurship was considered unacceptable by earlier generations; a dearth of promotion of the idea of entrepreneurship across the region; and a fear of failure and financial ruin.
Enough of the excuses. To suggest that entrepreneurship is new to this part of the world is to ignore the fact that the Gulf has for centuries been one of the world’s great trading hubs, peopled by generations of some of the most dynamic entrepreneurs in history. From the very first sheikhs to the modern-day business moguls that have embraced the opportunities afforded them by globalisation, enterprise and ambition have been defining characteristics of the Arab success story so far.
To claim that there’s a lack of media promotion of the concept of entrepreneurship is pretty thin, too. Kristina Rogers, senior partner of Monitor Group, the management consultancy which carried out the survey, told Arabian Business last week that “there is an issue about exposure and encouragement in the media — while people are celebrated for what they are trying to do even if they fail in the US or South Korea, for example, that doesn’t happen across the Arab world.”
I’d argue that it has been pretty difficult to avoid positive media coverage of the Gulf Arab entrepreneurs making millions, even billions, of dollars through their own hard work, and considerable talent. A look at our annual rich list will give you 50 names to start with, each of whom earned huge fortunes through entrepreneurship.
A fear of failure and financial ruin, meanwhile, is not a sentiment exclusive to the Arab people.
Let’s face it: now is not a good time to be an entrepreneur in the Gulf. But then it’s probably not a good time to be an entrepreneur anywhere else in the world either, such is the global economic uncertainty that has paralysed credit markets and choked what fragile life there was out of the stock markets.
You’ve more chance of selling a barrel of oil for $147 than securing a startup loan from a local bank, while any company which IPOs in order to raise funds, faces watching their stock fall through the floor the moment it goes to market. It’s the same everywhere — East or West, it’s all gone crunchy.
So if those three excuses don’t hold water, then why are we still bemoaning a lack of Gulf entrepreneurial spirit? The elephant in the room, and one dutifully ignored by Monitor Group, is the public sector and the ‘easy alternative’ that path is perceived to represent. Why flirt with financial failure when you can punch in and out every day, take home an excellent salary, and enjoy the many other perks of a government job?
The last generation of Gulf Arabs didn’t have that safety net and their environment proved a fertile breeding ground for hungry young entrepreneurs. And it is a dynamism the next generation will have to pick up pretty quickly if it is to survive — after all, oil revenue surpluses cannot subsidise bloated public sectors forever. As the region’s local population explodes and competition intensifies, there might be hope for Gulf entrepreneurism after all.
Andrew White is the editor of Arabian Business English.
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Comments 1-5 of 5
Posted by abdul, houston, USA on 28 April 2009 at 21:51 UAE time
The article is very encouraging, there is no-doubt that people living in the Middle East are very good traders, however, it is imperative that the difference between consumers mind-set and entrepreneurial mind-set be understood. The consumers only consumes and create no new wealth vs. entrepreneurial mind-set consumes and at the same time create wealth by innovating new chip, technology or procedure that benefit the many peoples and their respective country but it also make the nation very rich. This comes from gaining new knowledge and trends continuously and applying that gained knowledge to create new tools and technology. I am very hopeful that sooner that would be the in the Middle East, as peoples of that region are now gaining knowledge. Thanks.
Posted by Sand Jockey, Dubai on 26 April 2009 at 15:19 UAE time
...the facts are not.
The Al Abbars, Al Tayers, Al Futtaim's etc aren't entrepreneurs, they are just extensions of the nanny state but on a grander scale. If you dig you will see that many of the conglomerates are also owned in large part by the ruling families.
However, the basic premise is correct. A nanny state is not generally conducive to entrepreneurship. As one local told me a few years ago, why should he work hard when he can get by quite well on what the government gives him.
There are still the odd bright lights but they are few and far between.
SJ
Posted by Geriant, Dubai, UAE on 26 April 2009 at 15:16 UAE time
Paul makes the point that there is a "commendable desire to share the oil wealth around" which is less than half the reality. If the fraction of the oil wealth that is spent on the masses in places such as Saudi Arabia was more in proportion to what is spent on the royal classes that country wouldn't be facing the turmoil you don't read about in the Saudi Gazette. By paying a sop to the average citizen the rulers simply buy time, while they sip champagne on their Benettis off Cannes and Monaco. The Saudization policy is a joke. In the UAE there is a much more transparent sharing of wealth, and a true desire to empower the population. Sitting in Starbucks with a latte is more fun than sweating behind a computer five days a week is not a sentiment held only by Gulf nationals. China's one-child policy has actually caused a similar phenomenon, because the little emperors are spoilt and the middle classes suck the entrepreneurial spirit out of the young by giving them everything.
Posted by paul, Dubai, UAE on 26 April 2009 at 12:32 UAE time
It is one of the dangers of wealth; that in your desire to give it to your children or share it with your citizens, you remove the incentive to study hard, work hard and accept less now for a bigger pay off later.
The gulf countries could be so much more dynamic, but in their commendable desire to share the oil wealth around they are simply feeding a reliance on the state that is little different from the social security culture in western Europe. In many ways it is worse, since the wealth and privileges provided here support a standard of living no one on welfare in western Europe could afford.
The difficult part is taking it away now that the masses have become accustomed to it.
Posted by Geriant, Dubai, UAE on 26 April 2009 at 10:39 UAE time
The UAE has been a nanny state to its nationals too long, giving them everything they need from the proverbial cradle to grave. Free medical care, education, housing, no tax, jobs for life for those willing to work in the public sector. The crisp white thobes and striking black abayas that dominate Starbucks lounge chairs the UAE over are just a local mode of dress similar to the hoodies in the UK -- who get similar but much tinier hand-outs from the moment their unmarried mothers conceive. The UAE should stop spoon-feeding its young and celebrate the many entrepreneurs such as Alabbar, Al Tayer, Al Futtaim, etc. by making the young follow in their plastic-shoe-to-school history.