Entrepreneurship is a source of economic growth in all parts of the world, and in many Middle Eastern countries, it is one of the main economic drivers. Bayt.com teamed up with YouGov to ascertain the current levels of understanding and interest in entrepreneurship throughout the Middle East and North Africa (MENA) region.
The ‘Entrepreneurship in the MENA’ report found that a vast majority of MENA professionals (71 percent) would prefer to be self-employed, citing ‘personal fulfillment’ (58 percent) and ‘freedom to choose work-life balance’ (41 percent) as the primary reasons for this preference.
On the other hand, close to a quarter of respondents (23 percent) said that they would prefer to seek employment in a company, as opposed to setting up their own business. The main reason for this decision is the security of a ‘regular income’ (44 percent), followed by the interest in ‘learning new skills’ (41 percent), ’employment stability’ (35 percent), ‘benefits and perks’ (31 percent), and ‘fixed working hours’ (28 percent). For 28 percent of MENA professionals, ‘lack of finances to start their own business’ was the main reason they chose to seek employment in a company rather than set up their own business.
The State Of Entrepreneurship In MENA
For employed MENA professionals, almost three in five are contemplating starting their own business (59 percent), while 17 percent have already attempted to do so in the past but either ‘could not do so’ or ‘failed to do so’.
As for MENA professionals who are currently self-employed, 75 percent have taken the first steps to establish their business within the last six years. Respondents who are self-employed said that ‘gaining greater independence in what they wanted to achieve’ (39 percent), ‘feeling the time was right’ (34 percent) and ‘wanting to do what they love’ (34 percent), were the main reasons behind their decision. Achieving a larger income was also a reason for a third of the respondents.
For active entrepreneurs surveyed, 37 percent revealed that they are at the start-up stage of their business, while approximately a quarter claim that their business is established and performing well (24 percent). However, nearly one in five (19 percent) disclosed that their business is not performing well. When asked about their business ambitions, almost a third stated that they have their sights set on obtaining more growth and profitability in their country of residence (30 percent), while almost three in 10 respondents (28 percent) want to see their business become an important regional player in the future. Around one in five hope to grow their business into an important international player (22 percent) or a major international group (19 percent).
Route To Entrepreneurial Success
When it comes to the best time to start a business, professionals in the MENA are divided. It seems that ‘at any time’ and ‘mid-career’ are the most popular times, both at 37 percent. Other respondents believe the right time to set up a business is either ‘right after college’ or ‘after a lengthy career’, both at 12 percent.
Regardless of the best time to start a business, ‘not being afraid of failure’ is by far the best advice to give to aspiring entrepreneurs (42 percent). Other important advice include ‘perform an extensive amount of market research’ (12 percent), ‘have a great business plan’ (11 percent), ‘have a great marketing plan’ (9 percent), and have a great founding team’ (8 percent).
As for the best industries for entrepreneurship, the report’s respondents feel that ‘Communications/ Information Technology’ (18 percent) and ‘Advertising/Marketing/Public relations’ (17 percent) are the most favorable options for aspiring entrepreneurs, followed by ‘Hospitality and Leisure’ (14 percent), ‘Architecture and Engineering’ (12 percent) and ‘Finance/Insurance/Real Estate’ (10 percent).
To ensure business continuity and success, respondents cite five key factors, including ‘innovation’ (31 percent), ‘being close to clients or customers’ (22 percent), ’employing the right people’ (21 percent), ‘access to funding’ (19 percent), and ‘access to advice and mentorship’ (8 percent).
Challenges Faced By MENA Entrepreneurs
Professionals in the MENA region who have tried to start a business in the past but couldn’t or failed to do so faced certain challenges which prevented them from success. These reasons were mainly cited as ‘inability to obtain financial support’ (52 percent) and ‘inability to self-finance the start-up phase of the company’ (51 percent).
Finances are a common theme among respondents when it comes to listing their business concerns. Around 56 percent claim that ‘procuring the finances to start’ is a top concern, followed by ‘hiring the wrong people’ (41 percent), the ‘uncertainty of profit/ income’ (35 percent), and ‘making a loss’ (30 percent). More than half of the employed respondents (54 percent) claim that it is difficult to start a business in their country of residence, and the majority believe that government intervention could ease the business set up process in a number of ways. The vast majority (60 percent) agree that easing the law and regulations for setting up a business would improve the entrepreneurial landscape in their country immensely. This is followed by ‘reducing taxation’ (12 percent), ‘regulating competition among businesses’ (12 percent), and ‘facilitating access to skilled labor’ (10 percent).
“Entrepreneurship has been a proven driver of both economic activity and innovation across the MENA region, which is why governments should take note of the fact that laws and regulations with regards to starting a business are among the top concerns for entrepreneurs in the region. We believe collaboration is a top priority for the public and private sector, as well as professionals looking for a job. In an effort to provide a channel for cooperation and exchange, Bayt.com offers Bayt.com Specialities, a platform where established business owners and aspiring entrepreneurs can share knowledge and interact before making the decision to work together. The website also provides special hiring packages to new business owners looking to hire top talents,” said Suhail Masri, VP of Employer Solutions, Bayt.com.
“Despite many challenges, entrepreneurship is fast emerging as a transformational mega-trend in the Middle East providing both a personal sense of fulfilment and the ability to be your own boss. It also plays a vital role in the economic development as a key contributor to innovation and new job opportunities. There is a long way to go to reach a mature entrepreneurial landscape in the Middle East, but the opportunities are sufficiently large and with better support from the government it will further accelerate the trend,” said Arleen Gonsalves, Associate Research Manager.
Data for the Bayt.com ‘Entrepreneurship in the MENA’ report was collected online from May 30 to July 24, 2016, with 715 respondents from the UAE, KSA, Kuwait, Qatar, Oman, Bahrain, Lebanon, Syria, Jordan, Algeria, Egypt, Morocco and Tunisia.