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Overview on Enterprises of Young Entrpreneurs in the Kingdom of Saudi Arabia

Youths under the age of 40 years started to assume a big and vital role in the Saudi economy. They represent today the fastest growing group within the Saudi work force with an annual growth rate of 5.7 % over the last years. They comprise today about 69 % of the total work force in the kingdom. Studies suggest that young entrepreneurs that are male and are within the age group of 25 – 35 years old amount to approximately 68 %, while the female percentage does not exceed 8.7 % which is very low compared to the total number of population.
Studies also showed that the majority of the entrepreneurs are university graduates and hold the first university degree (bachelor) in a percentage amounts to 56.9 %.
It is evident from the statistics that the youth is to a great extent equal to the other age groups in terms of their concentration on various types of profession. It is noted that 41.4 % of the youth group focus on the general management, while the age groups over 40 years comprise about 37.5 % only. Education sector comes in the second rank with 25.8 % of the youth group and 19.4 % of over 40 year age group.
Taking this into account, the youth’s participating interest is increasing in the private sector. Furthermore, studies show that youths established their own businesses; citizens under 40 years established more than 72 % of the total number of corporations registered in 2006. However, young entrepreneurs in the kingdom suffer from many difficulties and impediments during their voyage towards achieving success that they seek.
60% of these impediments from the entrepreneur’s point of view are represented in the ambient business environment these impediments could be summarized in the following points:
Absence of investment banks and existence of the obstacles with commercial banks.

  • Complexity of government procedures (red tape) including procedures of import and export.
  • Lack of adequate qualified Saudi manpower in addition to its expensive cost
  • Unfair competition.
  • Absence of clear mechanisms for resolving dispute
  • The high customs tariff for certain commodities.
  • The road infrastructure and means of transportation.
  • Phenomenon of dump / cheap imports.

At the time when young entrepreneurs in the kingdom face today’s many external obstacles, they, as the case with their counterparts worldwide, also face various internal problems which can be summarized in the following points:

  • Weakness of the administrative capabilities
  • Weakness of capabilities related to dealing with owners/partners
  • Technical obstacles
  • Shortage of cash and financial support.
  • Inefficiency of the human resources
  • Marketing problems
  • Problems with suppliers
  • Problems of collection with customers
  • Fierce competition.

In spite of the external and internal obstacles suffered by the entrepreneurs in the kingdom today, many of them have accomplished brilliant success and achieved their strategic goals. They have done that through building their businesses professionally and focusing on the principles and basics of achieving success some of which are:
Effective planning:
This is considered as one of the most important pillars upon which any business should rely on. It was first principle which was addressed by the American scientist Deming.
Clarity of objectives: –
With the presence of the suitable and clear strategies from which objectives stem, this leads to continuity in the same drawn and previously planned course.
Previous experience in the type of project : -
The absence of sufficient experience in the same field decreases opportunities of project success particularly in its first years.
Financial and moral support : -
There must be some individuals, organizations, or agencies whether governmental or non governmental that extend help and provide support for youths in respect of financial aspects. They should also provide them with advice, consultations and guidance.
Training : -
This element is overlooked by many youths. Development process should be continuous, and it does not come from nothing, rather, one of its important means is the presence of effective and clear training methodology.
With these successes that have been attained for some businesses, there should be agencies which extend help to the entrepreneurs who face many difficulties that hindered them from achieving their expectations whether through helping them start implementation of their projects and reflect their ideas on the ground or through assisting them arrive with their businesses they started to the shore of safety. These agencies include for example but not limited to :
The Committee of Young Entrepreneurs in Riyadh’s Chamber of Commerce and Industry.
The Centennial fund.
Abdullatif Jamil fund for society service.

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