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The ecosystem of new technologies in Saudi Arabia may be nascent, but it is evolving rapidly to support economic growth
Despite the GCC's largest market in terms of population and consumer spending, the ecosystem of start-ups in Saudi Arabia is small and nascent compared to its large oil sector. SMEs represent only a small proportion of the Kingdom's economic activity, accounting for about 20% of GDP. The unemployment rate for Saudi nationals is around 12.8%, but young people – who make up about half of the 32 million population – face a more difficult challenge, with the public sector, traditionally the largest employer of graduates university, has become overcrowded.
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These are the conclusions published in a new report by Wamda in collaboration with OC & C Strategy Consultants, presented at the Riyadh edition of the flagship event of Mix N 'Mentor, organized by Wamda.
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Commissioned by Google and titled "Ecosystem of Technological Entrepreneurship in the Kingdom of Saudi Arabia", the report highlights the state of the entrepreneurial ecosystem as well as the challenges and opportunities that are being faced face the startups of the Kingdom of Saudi Arabia. The event recently took place at the Hyatt Regency Riyadh-Olaya and brought together entrepreneurs, industry experts, investors, among others, around themes related to the ecosystem of Saudi startups.
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Participants at the event were: Selim Edde, Public Policy Officer for the MENA region, Google; Nejoud Al Mulaik, Director of Fintech Saudi; and Salman Al-Suhaibaney, founder and CEO of Morni.
Walid Faza, partner at Wamda, kicked off the evening by presenting the report's key findings to the public, noting that even though the appetite for entrepreneurship was growing and the number From startups launched in Saudi Arabia was growing, there were not enough supporting organizations such as accelerators, mentoring programs and coworking spaces to meet their demands.
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Fares Ghandour, partner at Wamda, said, "As the region's largest economy, we see great potential in Saudi Arabia. It is an attractive market for startups and companies. As a country that continues to rely heavily on the oil sector, Saudi Arabia must continually seek ways to maximize its entrepreneurial potential and exploit it as a new source of economic growth and employment.
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"Government support has increased, regulatory hurdles have been removed, but much more needs to be done to enable the ecosystem to reach its full potential. Events like Mix N 'Mentor aim to bring together important ecosystem players to network, collaborate and help promote collaborative entrepreneurship. "
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As the ecosystem develops, technological entrepreneurship can be a cure for the dependence of the country's petroleum sector.
"You can not escape the fact that technology is transformative. Today, digital is not a tool, it is not an accelerator, it changes the game, it determines your strategy, "said Selim Edde.
As support and initiatives launched by governments over the last two years begin to take effect, entrepreneurship is expected to grow. Eddé believes that it is essential that the young shoots meet the needs of young demographers, knowing that mobile telephony is an extension of their arm.
According to the report, a healthy technology ecosystem depends on a large number of qualified potential founders and employees with superior skills in technology development and entrepreneurial dynamism. Saudi Arabia's fundamental challenge is to transfer talent to the private sector and technology entrepreneurship. Promoting employment in the private sector, especially entrepreneurship, requires a radical change in the mentality of young people and their communities.
At the present time, the sector tends to be a larger consumer rather than the creator of digital technologies. The majority of startups in Saudi Arabia are software-oriented as a service (SaaS) or e-commerce, while startups of the King Abdullah University of Science and Technology (KAUST) offer more advanced solutions.
Although there were no significant releases valued at more than $ 100 million, there has been progress and momentum in the sector. There is a strong political commitment to developing a strong science, technology and innovation base in Saudi Arabia. As a result, support for the ecosystem of technologies has increased.
The authorities have made a $ 1 billion "fund of funds" available alongside other funding programs. In the last three years, the Kingdom has seen accelerating accelerators and incubators of start-ups, as many government and non-profit organizations are directly involved. or indirectly support Saudi entrepreneurs. Saudi Arabia has more than 40 business incubators and several acceleration programs, half of which have some form of government.
"We clearly see opportunities where regulators have focused on the sector itself. We are showing interest in changing regulations and facilitating business, "said Nejoud Al Mulaik.
In roundtables with mentors including representatives of government entities as well as the private sector, startups shared their challenges. Common problems include increasing angel investment, talent acquisition and disconnection between different governments and regulators, as well as the authorities.
"It is clear that Saudi Arabia has all the elements, but they look at each other and do not move," said Edde. "Connecting, collaborating and co-innovating to create opportunities for the future is extremely important."
For Salman Al-Suhaibaney of Morni, a roadside assistance app, more support needs to be given to start-ups at different stages of growth. "Today, it's much easier for entrepreneurs to determine what they want," he says. "We need support at every stage and not the same set of solutions that can be applicable to everyone."
With its dynamic and young population structure, Saudi Arabia has the potential to create and develop a competitive knowledge economy. Given the abundant resources of the Kingdom and the inherent market dynamics, the burgeoning ecosystem of technological entrepreneurship can lead the non-oil revolution and become a regional engine.
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