Saudi Arabia is #2 in the Global Entrepreneurship Monitor (GEM) National Entrepreneurship Context Index (NECI), trailing only the United Arab Emirates.
As noted in the GEM 2022/2023 Global Report entitled Adapting to a New Normal (released today), GEM defines the entrepreneurial context of a particular economy in terms of 13 different characteristics, labelled the Entrepreneurship Framework Conditions (EFCs):
- Entrepreneurial Finance: there are sufficient funds for new startups
- Ease of Access to Entrepreneurial Finance: and those funds are easy to access
- Government Policy — Support and Relevance: policies promote and support startups
- Government Policy — Taxes and Bureaucracy: new businesses are not over-burdened
- Government Entrepreneurial Programs: quality support programs are widely available
- Entrepreneurial Education at School: schools introduce entrepreneurial ideas
- Entrepreneurial Education Post-School: colleges offer courses in how to start a business
- Research and Development Transfers: research is easily transferred into new businesses
- Commercial and Professional infrastructure: quality services are available and affordable
- Ease of Entry — Market Dynamics: markets are free, open and growing
- Ease of Entry — Burdens and Regulations: regulations encourage not restrict entry
- Physical Infrastructure: good-quality, available and affordable
- Social and Cultural Norms: encourage and celebrate entrepreneurship
The NECI results are based on the scores of the Framework Conditions for each of the 51 economies participating in GEM. At least 36 experts, often more, are selected for their expertise by the GEM National Team and approved by GEM to assess statements that make up the scores. As the same questions are asked in all economies, scores can be compared across countries.
The highest-rated condition in Saudi Arabia is in Physical Infrastructure: services and structures that facilitate communication, transportation and other business operations. Also highly rated are Ease of Entry: Market Dynamics — the extent to which there is a free and open market — and Social and Cultural Norms that encourage acceptance, support and high regard for entrepreneurship. Among the lowest-rated, but showing the most improvement, was entrepreneurship education, both at primary- and secondary-school level and in higher education and vocational training.
With regard to government efforts to counter the negative effects of COVID-19, the experts had positive comments about government measures and policies in general, specific programs addressing the impact of COVID-19, support for digitalization, subsidies for employment preservation, wage subsidies, deferment of tax liabilities, credit and loan repayment extensions, and financial support.
Saudi Arabia’s overall score is 6.3. In the previous year’s report, Saudi Arabia scored 6.1, number 4 overall.
“Saudi Arabia is a clear example of an economy that has invested heavily in its entrepreneurial environment in recent years and as a result there has been improvement in the environment,” said Muhammad Azam Roomi, professor at the Prince Mohammed Bin Salman College of Business & Entrepreneurship and team leader of the GEM Saudi Arabia Team. “Government policies have simplified the process of starting a firm and made it simpler for foreign corporations to invest in the economy, two factors that are essential to the kingdom’s long-term development ambitions under the Vision 2030.”
“The EFCs are derived from more than two decades of GEM research, experience and knowledge,” said Aileen Ionescu-Somers, GEM Executive Director. “The state of the EFCs can encourage and enable, or discourage and constrain, both the new start and any subsequent growth and development. The quality of the EFCs is directly influenced by governmental policy, and therefore GEM’s NECI can be a useful strategic tool for policy decision makers that are seeking to cultivate entrepreneurship, build a robust entrepreneurship ecosystem and empower entrepreneurs.”
Access the full report at https://www.gemconsortium.org/reports/latest-global-report.
Global Entrepreneurship Monitor (GEM) is a consortium of national country teams, primarily associated with top academic institutions, that carries out survey-based research on entrepreneurship around the world. GEM is the only global research source that collects data on entrepreneurship directly from individual entrepreneurs! GEM’s Adult Population Survey (APS) provides analysis on the characteristics, motivations and ambitions of individuals starting businesses, as well as social attitudes towards entrepreneurship. The National Expert Survey (NES) looks at the national context in which individuals start businesses.
In numbers, GEM is:
- 24 years of data
- 3,600,000+ GEM Adult Population Survey interviews since 1999
- 173,000+ respondents in the 2022 Adult Population Survey
- 2,000+ expert interviews for the 2021 GEM National Expert Survey
- 120+ economies since 1999
- 370+ specialists in entrepreneurship research (GEM National Team members)
- 300+ academic and research institutions
- 200+ funding institutions
- 1,000+ publications in peer reviewed journals
GEM began in 1999 as a joint project between Babson College (USA) and London Business School (UK). The consortium has become the richest resource of information on entrepreneurship, publishing a range of global, national and 'special topic' reports on an annual basis. www.gemconsortium.org.