The age of the entrepreneur
Author: Georgi Gyton
Professionals want to work for themselves - but does the GCC have the infrastructure to support them?
The dream of working for yourself is becoming so attractive that the majority of professionals in major Middle East economies would now prefer to go it alone than remain in a corporate environment, according to a new study.
The Entrepreneurship in the Mena report, from Bayt.com and YouGov, suggests that 71 per cent of respondents would prefer to be self-employed if they could - a figure that peaks at 73 per cent in the UAE and Saudi Arabia. This represents a surprising increase on the same survey in 2013, when the figures were 47 per cent for the UAE and 42 per cent in KSA.
The main reasons for being self-employed in the UAE were personal fulfilment (50 per cent), an increased level of autonomy when it comes to work-life balance (46 per cent) and the ability to be your own boss. In Saudi Arabia, 44 per cent felt it would enable them to give something back to the community.
There are, however, a number of key barriers to self-employment. One is start-up finance, with 48 per cent of survey respondents citing it as the reason they have not become entrepreneurs so far. They were also uncertain whether they would be able to generate sufficient income.
Regulation is another obvious problem, particularly in the UAE, where 47 per cent reported that starting a business was difficult, and 63 per cent felt legislation should be relaxed to improve the entrepreneurial landscape.
Unsurprisingly, the number of self-employed workers is currently tiny, given the bureaucratic and legal barriers in place. According to the Dubai 2014 Labor Force Survey, only 1 per cent of UAE workers are self-employed, the majority of them Emiratis, though this has doubled in four years. The numbers in neighbouring countries, where regulations are even tighter, are likely to be lower.
While they represent a small cohort of the working population, the push to boost the entrepreneurial spirit is a feature of every national strategic plan across the GCC, according to Professor William Scott-Jackson, chairman of Oxford Strategic Consulting. Governments, mindful of the broader economic climate, are prepared to offer financial and logistical support to help entrepreneurs get off the ground.
"There are numerous and generous schemes in place to support nationals wishing to set up innovative new businesses," he says. "And the 'year of innovation'' in the UAE last year also generated a great deal of interest and motivation to set up new businesses."
Gorvinder Pannu, legal director, employment, at Addleshaw Goddard, does not believe the broad restrictions on non-nationals opening businesses in GCC countries are likely to be removed soon, but points out there are many free zones -particularly in the UAE - that allow greater flexibility, a trend she expects to continue.
"The free zone culture encourages entrepreneurship," says Pannu. "It's very common for expats to go and set up their own businesses there and have control over the services they want to provide."
According to Arleen Gonsalves, associate research manager at Bayt: "There is a long way to go to reach a mature entrepreneurial landscape in the UAE, but the opportunities are sufficiently large, and with better support from the government it will further accelerate the trend."
Scott-Jackson says his research suggests it is possible to assess the psychological characteristics of those who are likely to make good entrepreneurs. This insight could be used by governments to target different kinds of support to these individuals. "For example, these high-growth potential entrepreneurs could be supported (financially and with advice) to deal with the tricky stages of fast growth, whereas the likely 'one-man bands' would get different support to help them maximise their own personal success," he says.