A recent survey on entrepreneurship among youth in Kuwait found that over 67 percent of respondents would like to be self-employed, become entrepreneurs and start their own business. The survey also showed that the perceived image of entrepreneurs in the country is very positive. Of the total respondents, 83 percent perceived entrepreneurs to be opportunity-driven and that they help in creating new jobs.
Youth unemployment in the region is among the highest in the world. Given the large number of youth without regular jobs, it is not surprising that self-employment and entrepreneurship is a growing trend in the Middle East and North Africa (MENA) region.
The ‘Entrepreneurship in the Middle East and North Africa 2019’ survey, was conducted by Bayt.com, the Middle East’s leading career site, and market research agency YouGov,
When asked about the reasons for starting their own business, the top two responses were, ‘personal fulfillment’ (44%) and ‘freedom to choose work-life balance’ (48%). ‘Being my own boss’, ‘ability to give back to the community’ and ‘higher monetary gains’ were also cited reasons. Those who have already started their business seem to have similar reasoning. When asked about the reasons Kuwait professionals have for starting their own business, the top three answers were: more income (33%), wanting to do what they love (27%) and having a great business idea/concept (25%).
The top concern of respondents while setting up their own business was procuring finances to start (59%), and the uncertainty of profit/income (48%). Likewise, among those who tried to start a business in the past, financial-related obstacles were the main challenge they faced. The most appealing industries for entrepreneurship in Kuwait are considered to be Consumer Goods/FMCG (12%) followed by Commerce/ Trade/ Retail (10%) and Hospitality/ Recreation/ Entertainment (9%).
There certainly appears to be no lack of enthusiasm for entrepreneurship in Kuwait and many people are known to have ventured into their own business over the years. But the success of these enterprises leave much to be desired. A study by the World Bank a couple of years ago found that the number of Small-to-Medium enterprises (SMEs) in Kuwait is high, particularly in retail and non-financial services. However, their overall contribution to the economy is marginal — just 3 percent of GDP.
This paradox of high volume and low output is especially troubling when compared to high income and emerging economies, where SMEs comprise most of the economic activity in the private sector and contribute 40 to 50 percent of the GDP. Similarly, on creating employment opportunities the SMEs in Kuwait lagged their counterparts elsewhere. The SMEs in Kuwait were responsible for employing around 23 percent of the total workforce in the country, which is less than half of that in high income and emerging economies.
To understand key barriers to SME business growth in Kuwait, the World Bank surveyed over 500 SMEs in the country. More than 35 percent of respondents said permits and business licensing were the main things blocking their growth. Answers concerning labor regulations, regulatory uncertainty, and administrative corruption also featured highly.
The lack of an adequately educated workforce was also cited by 24 percent of the survey’s respondents as a barrier to growth. Obtaining an operating license and dealing with other government regulations consumes anywhere nearly 20 percent of their time lamented the entrepreneurs.
Building a vibrant ecosystem for SME development is seen as critical to promoting long-term economic diversification in Kuwait. In the next 20 years or so, the private sector is expected to play a leading role in creating jobs for the next generation of Kuwaitis in a New Kuwait. But the success of this will largely hinge on whether Kuwait creates an enabling environment in the form of a robust ecosystem for promoting and encouraging entrepreneurship in the country.
The Times Report