COVER FEATURE CARING SMEs

Home Decoration fairs in order to market their products.

There is serious shortage of workers in the home deco-
ration and furniture manufacturing sectors in Saudi
Arabia, said Mr. Sami Alsuhaim of Luxury Home, a
‘Best Promising’ award winning company for 2010.
He particularly noted the shortage of carpenters and
painters in the decoration and furniture industries.
He complained that despite supporting the
Saudization policy, the government has not allowed
SMEs engaged in these sectors to bring in workers
from outside the country. “It’s a major challenge for
us,” he said.
He urged the government to look into the prob-
lem saying that the labor office must distinguish be-
tween the companies depending on their real need for
workers. He also wanted the ministry of commerce to
undertake promotional activities and help promising
SMEs participate in national and international trade
Mr. Alsuhaim noted the support and promotional
activities provided by Asharqia Chamber for the growth
and development of SMEs in the Eastern Province.
“Launching the Best Promising SME Award is the big-
gest support from Asharqia Chamber”, he pointed out.
Luxury Home is legacy of heritage which is en-
gaged in designing, manufacturing and implementing
decoration solutions for commercial and residential
structures. “All of this is made by professional people
reflecting in our skills to reach our customers’ satisfac-
tion and happiness,” he said adding that his company
takes utmost care of details and considers seriously
its customers’ requirements and deals with them as a
partner. Luxury Home will continue to work for the
improvement of its products and services to make its
customers feel satisfied to the fullest, promised Mr.
Alsuhaim.

A Recipe to Foster Entrepreneurship in the Arab World

By Dr. Nabil Shalaby*
I believe that the keyword to awaken
the Arab countries and to restore their lost
glory is ‘development.’ This should happen
in education, culture, economy, health
and social activities. Entrepreneurship
is a major tool, which leads to ‘develop-
ment.’ Entrepreneurship not only affects
our lives through innovation but rep-
resents the working life for many of us
due to layoff by large organizations and
shrinking of job opportunities for gradu-
ates. Entrepreneurship is synonymous to
creation of new venture, small and medi-
um businesses. SMEs have made impor-
sults give the decision-makers in the Arab
World a great responsibility to play their
roles in encouraging and supporting new
initiatives to foster entrepreneurship.
The Entrepreneurship is a special cul-
ture, starting from homes, schools and
universities. I think the center point of
technology innovation is the university. I
am fully convinced that we have to invest
in the entrepreneurial ideas conceived by
the university students. When I recently
participated in the presidential sum- *Dr. Nabil Shalaby is the Founder and Chairman of
the Arab Entrepreneur House, Egypt and Manager of
mit on entrepreneurship at Washington the Entrepreneurship and SMEs Development Center
D.C., I presented a paper at the George

Saudi Commerce and Economic Review/ Issue 201/ January 2011

tant contributions to the Arab economic
growth.
A study conducted by Gallup in June
2009 found that the majority of Arab youth
surveyed believed that entrepreneurship
was the key to future job creation in the
region. According to the survey, 26 per-
cent of the young Arabs were planning to
start their own businesses within the next
12 months. These results are encouraging
for an emerging generation with willing-
ness to start new businesses and pursue
new ideas. If this is what our youth be-
lieve, what can we do for them? These re-
Washington University, School of Business,
on an innovative model for commercializ-
ing entrepreneurial ideas with the support
between universities and technology in-
cubators for the ME, MENA and WANA
universities.
In order to provide solutions or a recipe
for the promotion and support a culture of
entrepreneurship in the region, firstly it is
necessary to diagnose the situation, find-
ing all its aspects and to ensure provision
of basic facilities. There are many agencies
that do so even at the country level. For
example, The Global Entrepreneurship
at Asharqia Chamber, Saudi Arabia. www.nabil-
shalaby.com
Monitor covers more than a hundred
detailed points through seventeen major
topics, which include:
1. Government Policies
Governments consistently favor new
firms – New firms can get most of the
required permits and licenses in about a
week. The amount of taxes is NOT a bur-
den for new and growing firms, coping
with government bureaucracy, regula-
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 COVER FEATURE CARING SMEs

tions, and licensing requirements it is

not unduly difficult for new and grow-
ing firms.

2. Government Programs
A wide range of government assistance
for new and growing firms can be ob-
tained through contact with a single
agency. Science parks and business in-
cubators provide effective support for
new and growing firms. There are ad-
equate government programs for new
and growing businesses. The people
working for government agencies are
competent and effective in supporting
new and growing firms. Almost any-
one who needs help from a government
program for a new or growing business
can find what they need.

3. Education & Training

Teaching in primary and secondary
education encourages creativity, and
personal initiative, provides adequate
instruction in economic principles, and
adequate attention to entrepreneurship
and new firm creation. Colleges and
universities provide good and adequate
preparation for starting up new firms.
4. Finance
There is sufficient equity and debt
funding available for new and growing
firms. There are sufficient government
subsidies and venture capitalist funding
available for new and growing firms.
There is sufficient funding available
through initial public offerings (IPOs)
for new and growing firms.
Saudi Commerce and Economic Review/ Issue 201/ January 2011
6. Commercial & Services
Infrastructure
There are enough and cost-affordable
subcontractors, suppliers, and consul-
tants to support new and growing firms.
It is easy to get professional legal and ac-
counting services. It is easy to get good
banking services (checking accounts,
letters of credit, and the like).
7. Economic Openness
New and growing firms can easily en-
ter new markets. The new and growing
firms can afford the cost of market entry
without being unfairly blocked by estab-
9. Cultural and Social Norms
The national culture is highly supportive
for individual success achieved through
own personal efforts, autonomy, and
personal initiative. The national culture
encourages entrepreneurial risk-taking,
creativity and innovativeness.
10. Opportunities to Start Up
There are plenty of opportunities for the
creation of new firms. There are more
good opportunities for the creation of new
firms than there are people able to take ad-
vantage of them. There are plenty of good
opportunities to create truly exponential

5. R&D Transfer lished firms. The anti-trust legislation is growth firms.

New technology, science, and other
knowledge are efficiently transferred
from universities and research centers
to new and growing firms. New and
growing firms have just as much ac-
cess to new research and technology as
large, established firms. There are ad-
equate government subsidies for new
and growing firms to acquire advanced
technology. There is good support avail-
able for engineers and scientists to have
their ideas commercialized through
new and growing firms.
32
effective and well enforced.
8. Physical Infrastructure
The physical infrastructure (roads, utili-
ties, communications, waste disposal)
provides good support for new and
growing firms. It is not too expensive
for a new or growing firm to get good
access to communications (phone,
Internet, etc.( in about a week. New and
growing firms can afford the cost of ba-
sic utilities (gas, water, electricity, sewer)
in about a month.
11. Abilities, Knowledge to Start Up
Many people know how to start and man-
age a small and high-growth business.
Many people can react quickly to good
opportunities for a new business and have
the ability to organize the resources re-
quired for a new business.
12. Social Image for Entrepreneur
The creation of new ventures is considered
an appropriate way to become rich. Most
people consider becoming an entrepre-

neur as a desirable career choice - You will
often see stories in the public media about
successful entrepreneurs.
13. Intellectual Property Rights
The Intellectual Property Rights (IPR) leg-
islation is comprehensive and is efficiently
enforced; The illegal sales of ’pirated’ soft-
ware, videos, CDs, and other copyrighted
or trademarked products is not extensive;
New and growing firms can trust that
their patents, copyrights, and trademarks
will be respected; It is widely recognized
that inventors’ rights for their inventions
should be respected.
14. Women’s support to start up
There are sufficient social services avail-
able so that women can continue to work
even after they start a family; Starting a
new business is a socially acceptable ca-
reer option for women; Men and women
get equally exposed to good opportuni-
ties and are equally able to start a new
business.
15. Attention to High Growth
There are many support initiatives that
are specially tailored for high-growth en-
The keyword to awaken
the Arab countries and
to restore their lost
glory is ‘development.’
Entrepreneurship is a
major tool, which leads to
‘development’
trepreneurial activity; Policy-makers are
aware of the importance of high-growth
entrepreneurial activity; Potential for
rapid growth is often used as a selection
criterion when choosing recipients of en-
trepreneurship support; Supporting rapid
firm growth is a high priority in entrepre-
neurship policy.
16. Interest in Innovation
Companies like to experiment with new
technologies and with new ways of do-
ing things; Consumers like to try out
new products and services; Innovation is
highly valued by companies and by con-
sumers; Consumers are open to buying
products and services from new, entrepre-
neurial companies.
17. Social Entrepreneurship
Society expects companies to give some
of their profits back to the community
through contributing to important social
or environmental projects; Social, en-
vironmental and community problems
are generally solved more effectively by
entrepreneurs than by the government;
Businesses should invest more in socially
responsible activities; Social responsibility
is a significant source of competitive ad-
vantage for new and growing businesses.
Entrepreneurship Image in the
Arab World, in Brief
• There is a national culture supporting
start-ups, especially among young people,
but did not translate effectively on the
ground.
• There is sufficient funding liquidity by
the government, but it’s too difficult to
access due to regulations and guarantees
required.
COVER FEATURE CARING SMEs
• Bureaucratic governmental procedures
for licensing
• Lack of entrepreneurial education and
training strategy
• High degree of physical infrastructure
in some Arab countries and low degree in
other countries.
Recommendations to Foster
Entrepreneurship in the Arab
World
1. Entrepreneurship is a special culture,
starting from home, to school and univer-
sity
2. Entrepreneurship education and train-
ing should be applied to all regions and
remote areas
3. Launch One Stop Shops (OSSs) for na-
tional entrepreneurs to facilitate licensing
and access to information
4. Launch affordable incubation facilities
in every city
5. Enable business registration in less than
a week, and with no minimum capital.
6. Provide equity funding with flat rate
7. Provide credit guarantee programs with
no collaterals
8. Commercialize the entrepreneurial
ideas with the support between universi-
ties and technology incubators
9. Facilitate customs procedures and in-
crease the period of tax exemptions, espe-
cially for knowledge-based companies up
to 15 years.
10. Enable technology transfer and local-
ization and provide technical assistance to
incorporate technology in all sectors
11. Promoting the concept of social re-
sponsibility for companies of all sizes to
support the activities of Entrepreneurship
Saudi Commerce and Economic Review/ Issue 201/ January 2011
12. Benefit from the huge business opportu-
nities by networking with giant companies
13. Providing advice, guidance and men-
torship services electronically after classi-
fication of experts to help all investment
sectors.
14. Expanding awards and celebrate the suc-
cessful enterprises and help failed businesses
and encourage them to survive again.
Collectively, we can make an impact,
and help ensure entrepreneurship contin-
ues its remarkable progress in the Arab
world, so that future generations will see
their dreams come to life.
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