ENTREPRENEURSHIP AS A CATALYST FOR ECONOMIC GROWTH—SAUDI REALITIES

Entrepreneurship has long been recognized as a catalyst for economic growth. The economic consequences of creating a vibrant and healthy entrepreneurial class within a country can pay dividends to society well into the future. These dividends, although often not immediately perceived or seen, may include sustained job creation, foundational support for new industries and technologies, improved workforce skill levels, and the eventual creation of significant built wealth. The motivational factors leading governments or a nation's private sector to support commercial and industrial projects, particularly as they relate to SMEs and the pursuit of innovation, differ from country to country. Saudi Arabia's great push to diversify its economy by fostering broader private-sector participation in the expansion of its technological and industrial bases has led to new programs supporting Saudi entrepreneurs. Before discussing the Kingdom's efforts to support its entrepreneurs, however, the difference between how government and its institutions view their roles in investing in entrepreneurship and innovation and how the private sector weighs in on such areas should be noted.

Orthodox economic analysis views business development projects as being motivated by profits and the avoidance of losses. The reasoning goes something like this: investment decisions are most often taken and capital deployed by companies in projects that hold comparatively low risk and reasonably high assurances of profitable returns. This is particularly true for companies that must spend significant capital investment to fund the research and development of new products and technological advances. Economists theorize that once the decision to fund new product development and related R&D is made and work is undertaken, there may be unforeseen and unintended benefits that inure to a nation's economy and society at large. These potential economic or R&D “spillovers” may, over time, if experienced consistently and quantitatively, have transformative effects on a country's economic and societal well-being.

Established economic theory postulates that as private industry inevitably follows the profit motive, it will usually devote only those quantities of resources to projects that will likely lead to a significant return on its investment. From private industry's perspective, it is this reasonable rate of return as well as the potential for the development of profitable and new products, technologies, and services that form the basis of their investment decisions. Economists have dubbed this favored outcome of business as “private rates of return.” This outcome, the theory goes, often falls short of the greater economic and social good to be realized by a nation at-large if the private sector had committed higher levels of capital resources and investment in the first place. This higher economic and social benefit potentially realized by society is referred to by economists as the “social rate of return.” When the social rate of return is not realized through a disconnect between higher levels of private-sector spending desired by the government or “the people” so as to secure the optimal national outcome, the occurrence of a “market failure” is recorded.

Until very recently with the onset of government and private-sector initiatives to help small business and entrepreneurship, there has been a “market failure” in the lack of an institutionalized approach to support and promote SMEs and entrepreneurs. As observed earlier and as noted by several business people interviewed for this book, the biggest concerted government effort to support entrepreneurship in the Kingdom occurred during the early days of development of the Kingdom's modern economy and early stages of the Saudi oil industry when the government fed the nation's burgeoning Saudi contractor and vendor and supplier chain a steady diet of contracts and new business.

As noted in Chapter 1 under the section titled “The Private Sector's Role in National Development and Non-Oil GDP,” many of the Kingdom's largest and best-known FOBs experienced their modest beginnings through the award of increasingly larger contracts from Aramco and government-controlled procurement entities. As these companies gained more business, their experience and productive capacities ascended ever steeper. The more these companies grew, the more public tenders they would win and government contracts awarded them. The ability of these large and increasingly diversified Saudi companies to win contracts by consistently demonstrating their proficiency in delivering was often enhanced by teaming up with global Western and later Asian firms making them even more formidable competitors.

Over decades, the tendency in the Kingdom has been for smaller companies with much less experience and capacity to be persistently squeezed out of significant and large government-funded project opportunities by the big companies. Many Saudi SMEs continue to voice scant hope in breaking into the highly competitive heavy industrial contracting business because of the high up-front capital costs as well as the commonly held belief that the big contracts always go to the big companies. To be fair, one may observe that when a country has faced such extreme pressures to modernize with breakneck swiftness as Saudi Arabia has over the last five decades, it would be somewhat unjust to criticize it for invariably selecting companies of size in order to get the job done on large and mega-industrial projects. The Kingdom cannot be faulted, however, for having the right intentions. It has always touted the need for an all-inclusive private-sector participation in spurring economic growth.

The Kingdom's development planners have been criticized for what has been perceived by some as a perennial neglect of its emerging entrepreneur class as it is claimed they have lurched from one national economic development strategy to another. Most of the current and serious government-sponsored entrepreneurship development entities and their programs have been created within the last 10 to 15 years. Private-sector entrepreneurship promotion organizations are even newer. Endeavor, for example, to be discussed shortly, has one of the highest impacts of all the entrepreneur organizations in the Kingdom, and it only began activities in 2012 and was launched in May 2014.

For decades, there have been calls from the Kingdom's leaders to the private sector to “do more” to contribute to the diversification of the Saudi economy. As previously discussed in Chapter 1 of this book, since the start of its modern economy, the Saudi government, in public pronouncements, five-year development plans, and its discourse with the Saudi private sector, has strongly emphasized the importance of broad-based private-sector engagement in the country's development. It is worth repeating that the First Five-Year Development Plan stated: “Only by continuously encouraging private enterprise—and small companies, family businesses, and individuals—to pursue those activities that they can undertake more effectively than government agencies, will the economy be able to benefit to the full from the ability and initiative of all its people.”¹ Further on in Chapter 1, Objective 11 of Article 1 of the royal decree creating the Supreme Economic Council, stated its goal of: “Increasing the participation of the private sector in developing the national economy through the government's privatization program.”²

The call from Saudi leaders continues today. Under the able leadership of the Custodian of the Two Holy Mosques, His Majesty King Salman Bin Abdulaziz Al-Saud and His Majesty's ministers, the Saudi government continues to enjoin the private sector to heighten their level of participation in the development of the Saudi economy by spending more investment capital inside the Kingdom that will create jobs and economic opportunities for SMEs. On May 27, 2015, His Majesty King Salman met with a large group of business leaders, including chairmen of the nation's chambers of commerce, heads of banks and Saudi FOBs in order to stress the Saudi government's eagerness to work with the private sector to resolve issues and encourage an increase in their investments in the country. His Majesty was quoted as saying to the businessmen gathered: “Our doors are open and we are ready to listen to your problems and proposals at any time…. Our main concern is the Kingdom and its people and you are part of it.”³

The lack of greater success in having the Saudi private sector take on a greater share in investments within the Kingdom is the “market failure” constantly being scrutinized by public officials. It is one proposition to advocate for broad-based private-sector engagement in the development of the country's economy, and it is, of course, quite another when the reality is that those predominantly engaged in capital spending on industrial development projects are large family-owned companies or the country's largest quasi-state entities. The curing of this “market failure” of less-than-optimal private-sector participation must include the substantive involution of Saudi SMEs. One is to be reminded that most SMEs began as start-ups. The Kingdom must find more accelerated methods of getting SMEs involved in the growth of the economy through an expansion of available commercial opportunities for this critically important part of the nation's citizenry.

Saudi Arabia's leaders have often recognized the need for a more national commercial engagement more inclusive of the country's SME participation. In March 2014, lamenting the high number of SMEs in the Kingdom owned and run by expatriates, His Excellency, Saudi Finance Minister Dr. Ibrahim Al-Assaf, was quoted as saying, “These establishments [SMEs] are still owned by expatriates, which confirm that we still have a long way to go before these establishments can have an active contribution to employment and the domestic national product. We need to push these establishments to be owned and managed by nationals.”⁴ The minister went on to say, “There should be more support for small and medium-sized establishments, and stronger funding opportunities. The business environment should be improved to strengthen these establishments' role in the national economy, because small and medium-sized establishments are a rich source of employment opportunities, income, consumption, and growth.”⁵

More than a year later, in October 2015, the Saudi Council of Ministers approved the creation of a government entity to combat the Kingdom's intractable long-term unemployment situation and drastically reduce the high composition of foreigners. Commenting in an Arab News article reporting on the creation of the entity, economist Fahd Bin Juma was quoted as stating, “…the labor force in the Kingdom is 11,912,209-strong, but of that number, only 47 percent are Saudis (5,591,563) while 53 percent (6,320,646) are foreigners.”⁶

Executive leadership farming in Saudi Arabia is in its third real developmental decade. Cultivating tomorrow's business leaders optimizes the possibilities of yielding successful businesses and in turn ensures a steady flow of potential private-sector investors in the domestic economy. Neglect of propagating tomorrow's business leaders will come at the expense of diminishing returns for a nation's economic development schemes. Although some would disagree, I believe the Kingdom's leadership is not only well aware of this but it is doing its best to promote entrepreneurial leadership in the country to foster greater participation in and contribution of SME to the Saudi national economy. The most promising recent development in the Kingdom for entrepreneurship and SMEs has been the overhaul of Saudi government-sponsored SME-focused policies, programs, and institutions.

On Monday, October 26, 2015, the Council of Ministers adopted multiple measures designed to greatly strengthen and support SME growth in the Kingdom and bring the country in line with world standards concerning best practices for SME programs and institutions. His Majesty King Salman approved the creation of an entity called the Public Authority for Small and Medium Enterprises (PASME).⁷ This new entity will exercise financial and administrative independence over its affairs but be overseen by a board of directors chaired by the Saudi minister of commerce and industry.⁸ It has been known for some time that the MOCI has been studying the feasibility of establishing an SME-focused entity akin to the U.S. SBA, which exists to support and promote SMEs in the United States. PASME looks to have very similar attributes.

To further the purpose of this new institution, Saudi Minister of Culture and Information, His Excellency Adel Al-Turaifi was quoted by the Saudi Gazette as stating: “The authority aims at regulating SMEs in the Kingdom as well as in supporting, developing, and taking care of them in line with the best international practices.”⁹ Minister Al-Turaifi went on to say: “This will be done to achieve the objective of raising their productivity, increasing their contribution to gross domestic product (GDP), raising their capacity to play a role in the national economy in order to generate more jobs for Saudis and the nationalization of technology.”¹⁰

PASME will also take on the enormous responsibility of guiding the establishment of a greater national framework to manage the growth and funding of SMEs in the Kingdom. The Council of Ministers directed that PASME subsume supervisory powers over SMEs previously held by the Coordination Council of SMEs sector within the Saudi Credit and Savings Bank (SCSB) and the National Center for SMEs within the MOCI. The entity tapped to fund Saudi SMEs by having transferred to it responsibilities previously held by the SCSB is the Saudi Industrial Development Fund.

For many Saudi SMEs, especially startups, perhaps there is no more important issue than their access to financing their businesses. Many complain about what they view as the onerous documentary hurdles they must surmount to secure loans from Saudi banks and other financial institutions. In a Bloomberg article on the Kingdom's SMEs and the reduced funding levels of Saudi banks to SMEs, Hasan Al-Hazmi, co-founder of Supply and Logistics Solutions, a 2014 start-up providing storage and cargo services located in Riyadh, summed up the frustration of many Saudis with startups when he was quoted as saying: “Banks are not lending to any startups without providing annual financial statements audited by licensed entities in Saudi Arabia…[H]ow would I be able to provide a bank with statements if I just started?”¹¹

The Kafalah program, established in 2006 and managed by the Saudi Industrial Development Fund (SIDF) of the Saudi Ministry of Finance, offers financial institutions in Saudi Arabia guarantees up to 80 percent of loans made by those institutions to SMEs. The thought behind the program was that banks were not lending to SMEs, particularly new ones, because of the inherent risk of lending to unproven commercial ventures. By shifting that risk to the Saudi government, the thinking goes that financial institutions would be more likely to lend capital to Saudi businesses' skimpy bank and financial statements. The Kafalah guarantees to the lender can last up to seven years. Another related program called Taqeem allows banks to secure important credit information on potential loan applicants in order to better adjudge repayment abilities.

For the year 2013, the SIDF reported it had approved 2,515 guarantees in comparison to the 1,670 guarantees approved the year before. It reported that the value of guarantees issues that year totaled US$342,000. Direct loans to approved SME Kafalah applicants from participating Saudi commercial banks rose from US$471,428 in 2012 to US$625,986 in 2014.¹² Purportedly, since its inception in 2006, a total of 4,082 enterprises have been funded at a cost of US$1.8 billion.¹³ The Kafalah program offers more than just SME corporate financing. Training and SME preparedness is also a part of their service function. The SIDF states on its website:

However, as reported in the Bloomberg article quoted in footnote 208, there are signs lending under Kafalah could be slowing, owed to a variety of reasons. As the article states: “Lending under the nation's SME Loan Guarantee Program, also known as Kafalah, plunged 76 percent to 572 million riyals ($153 million) last year as banks tightened rules, according to data from the Saudi Industrial Development Fund. That compares with a 12 percent increase for total bank credit last year to 1.25 trillion riyals, according to Saudi central bank data.”¹⁵

The need to invest in tomorrow's leaders is not only a Saudi challenge, but it is also one requiring the attention and resources of the GCC as well. According to a study done by the Leadership Circle, the GCC nations are under-spending on the development of future crops of its business leaders. The Leadership Circle, a global leadership development company with a community of certified coaches and consultants and committed to nurturing transformative changes in the thinking and action patterns of entrepreneurs, has concluded that organizations in the GCC region are not living up to international benchmarks for how to develop future business leaders. On October 8, 2015, news outlets reported the Leadership Circle's findings quoting the organization as saying: “The lack of leadership development is a serious issue in Saudi Arabia. With the largest population of the GCC countries and a government ambitiously committed to the Nitaqat program, increasing significantly the involvement of its nationals in the private workforce, there is a growing need for qualified leaders.”¹⁶

The Leadership Circle further noted that: “An internationally accepted rule of thumb is that professional development should consist of 70 percent on-the-job learning, 20 percent coaching from the line manager or a coach, and 10 percent classroom training. The gap in coaching has negative repercussions on the entire leadership development.”¹⁷

There is no shortage of organizations, programs, funds, and other initiatives that seek to foster greater growth of entrepreneurs and small businesses in the Kingdom. Let us look at the public- and private-sector contributions to the development of entrepreneurship and the development of SMEs in Saudi Arabia.

PROMOTION AND SUPPORT OF SAUDI ENTREPRENEURS AND SMALL AND MEDIUM-SIZED BUSINESSES

There are numerous SME and entrepreneurship promotion organizations in Saudi Arabia today. Some are government-funded; others are private-sector originated programs that are supported by Saudi companies large and small. Some of these programs and initiatives focus on individual business people with innovative technologies and ideas for inventions, while others concentrate on developing an individual's business practice acumen and successful and proven entrepreneurial skills sets. The end game for many engaged in the proliferation of new enterprises and SMEs encompass goals often articulated by both government and business: the growth of the private sector, increased investment of Saudi capital inside the Kingdom, greater non-oil sector job growth and an expansion of the country's knowledge-based economy. A look at the existing organizations promoting entrepreneurship and the SME community reveals a diverse group of entities serving the Kingdom.

In Table 5.1, “Organizations Associated with Entrepreneurship in Saudi Arabia,” you can see a listing of both public- and private-sector entities offering programs and services designed to grow the capacity and number of startups and SMEs in the Kingdom.

These organizations vary in the number of startups and SMEs they serve, their size in terms of funding and staffing, and also in regard to the amount of notoriety and frequency of recognition they receive within and outside the Kingdom for the work they perform. Virtually every organization offers training and training support. All but three entities out of the 35 listed offer some type of counseling services to aspiring and accomplished business people. Out of the 35 SME-focused entities listed, 23 offer some type of loan package or financial assistance. Let's examine a number of these organizations and their impact on Saudi entrepreneurship and SMEs.

ENDEAVOR GLOBAL INCORPORATED (ENDEAVOR) AND ENDEAVOR SAUDI ARABIA

Endeavor is a global entrepreneurship support organization that promotes itself as “leading the high-impact entrepreneurship movement around the world.”¹⁸ It is an organization whose mission is not only to accelerate the growth of “high-impact entrepreneurs,” but to spur fundamental change in the positive growth of economies in which these special types of entrepreneurs are found as well. Endeavor Global, Incorporated, the worldwide parent company, was conceived and founded by Linda Rottenberg and Peter Kellner in 1997 and is headquartered in New York City. The organization had its initial launches in Chile, Argentina, Brazil, Uruguay, and Mexico. By 2001, Endeavor had selected 100 high-impact entrepreneurs, and in the following year the first Harvard Business School case study about Endeavor was taught at the university. Since that time, it has grown to an organization that operates in 19 locations around the world, including North America, Latin America, Europe, Africa, the Middle East, Asia, and, of course, in the Kingdom of Saudi Arabia.

Endeavor enjoys a substantial worldwide network of business advisors, both individuals and organizations, who act as mentors, advisors, coaches, and as a “global board of directors” for entrepreneurs selected to join the program. The aim is to provide entrepreneurs access to and the ability to rely upon some of the most fundamental and critical elements to the successful entrepreneurial equation: talented individuals and organizations in the business world, proximity and open doors to financial and human capital, and entry to strategic markets. The example that Endeavor is setting in the area of support for high-impact entrepreneurs is without equal in regard to its global scope and constancy of analysis.

Endeavor's 61st international selection panel met in Morocco in October 2015 and chose 18 companies from 12 countries as their newest Endeavor entrepreneurs. The organization now claims to support 1,159 high-impact entrepreneurs from 735 companies in 24 emerging and growth markets.¹⁹ Much of Endeavor's rate of success with the entrepreneurs it accepts into its programs seems to be traced to the rigorous and meticulous process of identifying, screening, and ultimately selecting its applicants. This process is conducted by Endeavor's international selection panel (ISP), a group of distinguished international business leaders, and is a 12- to 18-month multilayered operation that makes visible as much of a 360-degree, scrupulous, and exacting examination of aspiring successful entrepreneurs as can be found anywhere in the world today.

The world is Endeavor's universe from which it searches for qualified applicants. As its website states: “We select individuals of all ages, ethnicities, and educational backgrounds, delivering a meritocratic message to the developing world: through hard work, creativity, and values-driven leadership, individuals living anywhere, from any background, can turn an entrepreneurial idea into a world-class venture.”²⁰

Nominations of applicants can be made by the Endeavor network or the applicants themselves. All applications are thoroughly screened and scrutinized to determine if initial interviews will be granted. Candidates are given initial interviews to assess each candidate's practical abilities to successfully go through the Endeavor program. A second review is then conducted by senior-level members of Venture Corp, a trademarked and branded service group of Endeavor Global, Inc., which provides education services such as seminars, workshops, speaker event series, and individual mentoring programs in the fields of venture capital and entrepreneurial business leadership. Venture Corps members conduct multiple interviews during this second phase in which the candidate's business's strategy, innovation, growth-potential, and entrepreneurial personal qualities meet Endeavor's program standards.²¹

In the next stage managed by the local selection panel, consisting of a group of 10 to 15 Venture Corps and local Endeavor board members, conduct additional candidate interviews, debate the merits of each candidate and then ultimately select those candidates who are recommended to the ISP for the final phase of consideration. As finalists, candidates are then interviewed and judged by the ISP and from that group of finalists the ISP names those to be included in the new class of Endeavor entrepreneurs.

Besides the credit to Endeavor's outstanding organization leadership, vision, and selection process, its stand-alone status as the most-recognized and accomplished entity championing the interest of high-impact entrepreneurs is due in large part to the nature of the “high-impact entrepreneur.” They are a breed apart in regard to their propensity for exponential business growth rates and the reverberating positive effects they have rippling through their host economies. But to understand Endeavor and its mission, one must understand the meaning of “high-impact entrepreneur.”

High-impact entrepreneurs constitute the vanguard in the advancing army of new and successful businesses. In many ways, they are an elite group within business possessing superior abilities that yield consistent and predictable beneficial multipliers that resound throughout an economy. They create the most jobs, experience the highest growth rates, are among the greatest creators of wealth, and become the best role models for aspiring SMEs. In a commentary for CNBC.com, Linda Rottenberg, co-founder and CEO of Endeavor, and one of the most-renowned experts on entrepreneurship in the world, once described “high-impact entrepreneurs” by saying: “High-impact entrepreneurs are visionaries who generate the highest returns, create the most high-value jobs, have the most significant impact on their communities, and inspire the most people to follow their lead—saying, ‘If she or he can do it, I can do it too.’”²² Endeavor's proposition to global economic development policy and decision makers is that if you are going to devote resources to investing in SMEs, a strong case is to be made to have a significant portion of that capital spent on the highest-yielding segment of that business group … high-impact entrepreneurs. In a revised edition of his book The World Is Flat, well-known author and New York Times columnist Thomas Friedman extolled the virtues of Endeavor by referring to it as operating under a “mentor capitalist” model and calling it “the best anti-poverty program of all.”²³

Other key attributes of the high-impact entrepreneur were articulated in a 2011 report authored by Rhett Morris of Endeavor's Center for High-Impact Entrepreneurship and the Global Entrepreneurship Monitor (GEM). The report was sponsored by Ernst and Young. In surveys of entrepreneurs, conducted by GEM for the report, it was reported that “only three out of every 1,000 respondents to the GEM surveys had founded a business that achieved high rates of growth, as defined to be an average of 20 percent or more estimated annual growth in the number of individuals employed.”²⁴ Other cited attributes of the high-growth entrepreneurs: “High-growth entrepreneurs represent only 4 percent of the total entrepreneurs who responded to the GEM surveys, yet the businesses they have founded or co-own created close to 40 percent of the total jobs generated by all entrepreneurs who responded to the survey. [And] high-growth entrepreneurs are more likely to have started their businesses to increase their incomes.”²⁵ High-impact entrepreneurs are outperformers in every sense of that term. Endeavor has shown that this special breed can be found in every part of the world. It should be no surprise that they have been found in the Kingdom of Saudi Arabia.

Endeavor Saudi Arabia was founded in 2012 by a visionary group of young Saudi business people, a group well-experienced in knowing what success looks and feels like in the Kingdom. Endeavor Saudi Arabia lists its founding board of directors as: Rami K. Alturki, president and CEO of Khalid Ali Alturki & Sons (Alturki Holding); HRH Princess Banderi; A. R. Al-Faisal, director general, King Khalid Foundation; Mohammed A. Hafiz, CEO; Al-Sawani; Musaab S. Al-Muhaidib, CEO; Al-Muhaidib Technical Supplies; Abdulaziz A. Al-Omran, VP, Khalid & Abdulaziz Al-Omran Co.; Hossam Radwan, CEO of Abraaj Saudi Arabia; Faisal Tamer, managing partner at the Tamer Group; and Abdulla Al-Zamil, CEO of Zamil Industrial. Rami Alturki serves as the board's chairman.

Endeavor Saudi Arabia has a range of programs and activities designed to identify, prescreen, and select high-impact entrepreneurs into an intense program that prepares each entrepreneur for successfully continuing upon and accelerating on the path of high growth and sustained positive impact. The aim is not only to remove the well-known barriers to successful entrepreneurship but to provide each Endeavor selectee a catalyst to an optimal environment enabling him or her to grow and resonate his or her success to fuel wealth creation, more jobs, and stronger macroeconomic conditions.

I sat down with the chairman of Endeavor Saudi Arabia, Rami Alturki, to discuss the state of entrepreneurship in the Kingdom and Endeavor Saudi Arabia's work in promoting the high-impact entrepreneur. We discussed the historical barriers to successful entrepreneurship that Endeavor Saudi Arabia sees SMEs facing every day in the Kingdom: (1) fear of business failure; (2) lack of role models; (3) limited management expertise; (4) lack of contacts and mentors; (5) lack of trust; and (6) limited access to “smart capital.” Rami said that all of these inhibiting factors can have a stifling effect on SMEs overall. However, in his view, what is particularly damaging to the prospects of increasing employment and growing the economy is having these barriers keep the high-impact entrepreneur from reaching his or her business goals. This is because high-impact entrepreneurs have been shown many times by Endeavor's research to be the SMEs that yield the greatest impact by creating 100 times more jobs than most startups.

For Rami and his involvement in founding Endeavor Saudi Arabia, the attraction was being able to position himself and other key business leaders in the Kingdom with the abilities to make a difference within an organization possessing the structure and unique programs to in turn make a difference in the lives of entrepreneurs and their high-growth businesses within the entire country. For Rami and his fellow Endeavor Saudi Arabia board members, these special entrepreneurs constitute essential elements in the Kingdom's drive to create the new and innovative jobs the country needs. The role Endeavor Saudi Arabia plays in mentoring and guiding Saudi high-impact entrepreneurs is proving successful in the creation of new wealth and projecting these businesses into becoming global competitors.

I asked Rami Alturki for some of his thoughts on the direction of entrepreneurship in the Kingdom and his insight into some of the more harmful impediments facing today's Saudi SME.

“There are numerous challenges facing Saudi SMEs today. Some of the specific challenges faced can ultimately prove fatal to a business just starting or attempting to scale up. The lack of reliable and routine access to professionals such as lawyers, accountants, bankers, and successful business peers can constitute a considerable drag on a company trying to grow. In today's increasingly global regulatory environment, a lack of knowledge of how to establish and maintain satisfactory corporate governance and compliance policies may be quite detrimental if sound advice is not secured,” Rami stated.²⁶

Expanding his comments on the common lack of knowledge by many SMEs, Rami said: “A lot of Saudis are sitting around at bigger companies with many great ideas. Taking that leap into entrepreneurship for many Saudis can be quite a daunting prospect. There are so many talented and smart entrepreneurs in the Kingdom. Many find it difficult, however, to surmount many of these obstacles going it alone. In the area of corporate finance, for example, many Saudi start-ups and SMEs find themselves in a quandary when they find their access to needed capital blocked because they are not prepared to meet the financial disclosure requirements of most lenders, investors, and financial institutions. Most of the time, that's why many entrepreneurs fail because they don't have the proper appreciation for financial disclosure.²⁷

During my interview with Rami, I asked him about comparisons made between today's Saudi entrepreneurs and the first-generation FOB founders, he offered some interesting observations.

Rami believes that when most aspiring Saudi business people consider the well-known first generation big businessmen of decades ago, they view those times as very different from today's environment. Because the environment was different, younger Saudis find it challenging to view older generation business leaders as role models in a practical sense. As others have, Rami makes the point that during the foundational times of some of the Kingdom's largest and better-known Saudi businesses, those companies received significant government support through readily available contracts as the country sought to build its modern infrastructure.

Moreover, the kind of coaching and business guidance provided those young, essentially Saudi, startups on a daily operational basis were prevalent and accessible when working contracts for some of the first Saudi industrial entities of the 1960s, 1970s, and 1980s such as Aramco, Saudi Arabian Fertilizer Company (Safco), Saudi Iron & Steel Company (Hadeed), and Saudi Yanbu Petrochemical Company (Yanpet). To be sure according to Rami, young Saudis respect and admire these older generational business leaders, but it is a struggle for them to find relevance in the decades-old experience of these firms to their daily challenges in growing their businesses in the Kingdom today.

I posed one of the more material questions of this book to Rami when I asked him whether he believed today's Saudi entrepreneur has the same kind of “fire in the belly” that propelled Steve Jobs to achieve unequaled heights in the fields of computers, information technology, and innovation. The question as to whether Saudis have the requisite will to work, grind it out, and enthusiastically pursue entrepreneurial dreams is routinely speculated upon. This question goes to a critically important social issue among Saudis concerning the Saudi work ethic.

There is no shortage of Saudis, among them Saudi business people, who believe that young Saudis have yet to become conscientious and dependable workers. I have witnessed some Saudi businessmen eschew the hiring of more Saudi workers than required by law because of their reputed undependable performance on the job. Although I believe this is very far from the norm, I have heard numerous stories concerning Saudi workers who routinely show up for work late and leave for the day significantly shy of the full set of hours they are required to be on the job. Many believe there is a kind of malaise or mild disaffection among many Saudi youth when it comes to the level of participation in any kind of daily laborious pursuits. Some have offered very blunt comments suggesting the lack of assiduousness, industry, and drive on the part of some younger generation Saudis stems from a social and familial cultivation of their sense of entitlement and privilege.

Rasheed Abou-Alsamh, a Saudi-American journalist, writer, and blogger, wrote: “The truth is that the Saudi generation born after the first oil boom ended around 1983 is an especially spoiled one. They have grown up with maids and drivers at their beck and call; they have been spoiled by parents who gave them everything from expensive clothes to cars to make them happy. This is a generation that hasn't known the deprivations of the pre–oil boom days when Saudi Arabia was a much poorer nation that did not have many luxuries.”²⁸

In stressing the importance of education in the growth of a knowledge-based society in an opinion editorial, editor-at-large of the Saudi Gazette, Khaled Almaeena, in part blamed the high unemployment rate in GCC countries like Saudi Arabia in part can be traced to Saudis graduating without the requisite skills sets saleable to private-sector jobs. Mr. Almaeena wrote: “According to statistics from the World Economic Forum, the GCC countries collectively have one of the highest youth unemployment rates in the world. To my mind, the reasons for this include the apathy of young people and their lack of work ethics in addition to their inability to master the job descriptions required by the private sector.”²⁹

In reply to my question concerning the “fire in the belly” for business and industry among young Saudis, Rami stated that he believed undoubtedly that there are many Saudis quite zealous in their pursuit of success for their businesses. He said he could readily give examples of Saudi entrepreneurs, in particular Endeavor Saudi Arabia's own candidates, who have achieved notable successes in entrepreneurship in the Kingdom. But, he added, he also laments over what he sees as a “crisis of aspirations” afflicting many Saudi youth. Rami stated:

Rami applauded the Saudi government, particularly the Ministry of Commerce and Industry for recognizing the challenges and obstacles faced by Saudi SMEs. He noted their willingness to listen and consider the views of organizations like Endeavor Saudi Arabia and acknowledged the government was working to address some of the problems. In addition to getting aspiring Saudi business people the help they need in filling in the knowledge and skills gaps with corporate governance, financial disclosure, and other best-business practices, Rami also believes another area that needs improvement is changing certain aspects of Saudi culture so as to nurture startups. Rami appreciates the cultural difference between the United States and Saudi Arabia when it comes to their tolerance for business failures.

“I certainly recognize that failure in business here in Saudi Arabia, particularly the financial aspects of failure, can be devastating for a Saudi,” Rami said. “It can have potentially long-lasting consequences. Culturally and legally, the United States is much more experienced in absorbing failed businesses than Saudi Arabia. No doubt, there is a need here to promote a “cultural accommodation of failure” to reduce much of the fear factor in starting up new businesses in the Kingdom. But it will take some time to make this cultural shift,” he said.

Endeavor Saudi Arabia continues to identify and select high-impact entrepreneurs from the Kingdom. Many of these Saudi high-impact entrepreneurs are today's Saudi business disrupters. A prime example of this new breed is Saudi inventor and entrepreneur Ms. Lateefa Alwaalan, founder and general manager of Yatooq, the creation of Ms. Alwaalan. A beneficiary of close contacts of Endeavor's network of dedicated entrepreneurs as well as the guidance and support of Saudi incubators, she used her own funds and took out bank loans to pursue her entrepreneurial dreams. Ms. Alwaalan was supported by KACST's BADIR incubator in developing a portable electric brewer of Arabic coffee. Good and authentic Arabic coffee, one of the daily pleasures I miss about living in the Kingdom, requires attention to the details in a traditional and fairly involved brewing process. Ms. Alwaalan's creativity and use of Saudi initiatives to which she had access from partnerships allowed her to patent, produce, and sell into international markets the Yatooq Arabic coffee maker.

Ms. Alwaalan has become a role model for many aspiring Saudi entrepreneurs, especially Saudi women, and continues to receive accolades for her accomplishments. She received the 2015 Ernst and Young (EY) 2015 “Entrepreneur of the Year” award. It is the example of Ms. Alwaalan and those others set by many of today's Saudi entrepreneurs that affirm the value of support organizations such as Endeavor.

THE NATIONAL ENTREPRENEURSHIP INSTITUTE (RIYADAH)

One of the most impactful and effective entrepreneur support organizations in Saudi Arabia is the National Entrepreneurship Institute, or “Riyadah,” as it is more commonly known. The story of Riyadah, from its creation through development and onto the achievements it has recorded over the years, is one of true appreciation and care for the spirit of Saudi entrepreneurism. The essence of Riyadah is the recognition that teaching Saudis from all walks of life and socio-economic status the life-changing experience of starting one's own business and providing them with the tools and knowledge to earn a living doing so releases the very best in the individual.

One of the greatest tributes payable to Riyadah is that it has led the way in providing useful support to Saudis in transitioning them from unemployment and a life of dependency on the state to real self-reliance and self-determination through successful entrepreneurship. It is an organization that continually evaluates its effectiveness and relevance and adjusts its focus and the application of Riyadah's unique program processes for aspiring entrepreneurs to optimize its value proposition. I had the distinct opportunity to interview the former chief executive officer of Riyadh, Dr. Sherif Elabdelwahab, for this book. He provided me with an abundance of insight into Riyadah's operational structure and thorough applicantion and evaluation processes.

Having assumed the position of CEO in 2011, Dr. Elabdelwahab's education and background could not have been more suited to the responsibilities he fulfills at Riyadah. He earned two master's degrees in public services administration and TESOL (Teaching English to Speakers of Other Languages), and was awarded a PhD from Ohio State University in foreign and second language education with an emphasis in workforce development. Beyond his educational achievements suiting him to shepherd the aspirations of budding Saudi business men and women has been his work experience in the areas of human resources youth empowerment programs. He has been an ESL (English as a Second Language) instructor, designed and delivered curricula instructional programs for a number of public- and private-sector institutions inside and outside the Kingdom. He has also written and presented, regionally and internationally, many esteemed papers on the subjects of EFL, independent learning and human resources development. Within Dr. Elabdelwahab's able hands, along with the experienced staff upon which he relied at Riyadah, the organization has gone from 22 branches and 1,400 entrepreneurs served in the Kingdom to 39 branches and 3,000 entrepreneurs out of 9,500 trainees.

In recounting the origins of Riyadah, Dr. Elabdelwahab noted for me how the importance of entrepreneurship in Saudi Arabia made its early impressions in the Kingdom earlier than the eighteenth century. It hit its long stride during the decades of the 1970s and 1980s and the country's oil boom. Dr. Elabdelwahab's recollection of this commercial expansionary period is in accordance with what I have learned from that foundational period of early Saudi entrepreneurs and FOB founders. It was a fast-paced, kinetic, unpredictable time in business when mavericks worked day and night and abounded and flourished in their craft. The energy and enthusiasm of these first-generation startups resonated throughout the Kingdom and seemed to telegraph (and eventually telex) the “new frontier” nature of business opportunities there on behalf of the country to the entire world. As Dr. Elabdelwahab put it: “In those days, Saudis started businesses with absolutely nothing and would walk for miles and miles in search of opportunities. Initially, there was little government support for developing their aspirations and growing their businesses. Eventually though, the expanding oil sector hit the global big leagues and Saudi Arabia's petroleum revenue waves raised all boats. And, according to Dr. Elabdelwahab, that is when entrepreneurship in the country began to change.

Dr. Elabdelwahab noted that with the onset of the oil boom of the 1970s and 1980s, there was a shift in the Kingdom in which the entrepreneurial pursuits of Saudis in their own businesses was gradually replaced by white-collar jobs. The kind of new frontier mind-set was replaced by a reliance of younger Saudis on their parents' personal largess and the growing availability of government jobs as the size of the public sector continued to grow. This dependency, said Dr. Elabdelwahab, created a bubble in which younger generations of Saudis forsook the higher risks associated with starting one's own businesses and surviving on their own life skill sets for the relative comfort of a salaried paycheck or even less strenuous daily pursuits. Government policies were not focused on the promotion of entrepreneurship. Government's emphasis on entrepreneurship began to take hold around 2000 and grew during that decade. That was the time when Riyadah was created.

At its beginning, Riyadah was one of the Technical and Vocational Training Corporation's (TVTC) strategic partnerships. The TVTC is the pre eminent government-sponsored technical and vocation training program in the Kingdom. Formerly known as the “General Organization for Technical Education and Vocational Training” (GOTEVOT), it has established itself as the leading provider of technical and vocation training in Saudi Arabia. With more than 100 locations throughout the Kingdom, the TVTC serves more than 120,000 trainees in disparate fields. It was the demonstrable successes of the TVTC within its small and medium businesses development center (SMBDC) that led the Kingdom's Ministry of Petroleum and Mineral Resources (MOP) to start a national entrepreneurship initiative. Riyadah was soon to become one of its most important and effective partners. There was an ever-increasing recognition by the Saudi government of the importance of entrepreneurship to the individual and the nation's economy.

In 2004, with an initial grant of US$8 million, the MOP partnered with the founders the Japan Saudi Arabian Methanol Company, SABIC, Saudi Aramco, STC, Alinma Bank, SCSB, and TVTC to establish Riyadah as a strategic partner of the TVTC. All of these entities are represented on Riyadah's board of directors. It is notable and commendable that it was the Japanese who stepped up as the only foreign entity to officially support Riyadah's founding. The creation of Riyadah was more than just a triumph for SMEs business owners and those who aspire to become them. It was a victory for the notion that occurs to many unemployed Saudis that they can equip themselves with the knowledge that can start them on their own paths toward financial self-determination. The fear factor has been discussed in this book and its insidious, inhibiting, and harmful effects on the determination of Saudi entrepreneurs to succeed in the face of repeated defeats and disappointments. The creation of Riyadah and the development of its entrepreneur development training system has successfully contributed to a lowering of the high failure rate of Saudis starting their own businesses.

After its start as a strategic partner in the TVTC's SMBDC in 2004, the organization produced its first batch of entrepreneurs in 2006. As it experienced and executed on the delivery of its training program, Dr. Elabdelwahab said Riyadah learned much about its program, processes, and about the Saudis matriculating through the program. The regular monitoring and assessments of the SMBDC partnership program and its entrepreneurs fostered a re-engineering within the entity.

“During this re-engineering phase, we learned a lot about the applicants and those accepted into the program. Many of the success indicators that we look for in the individual appear or do not. A percentage of those accepted do not show up when they are required to. We learned about a person's ability to problem solve and what aspects of our program best tested an individual's ability to troubleshoot their way past obstacles or existential threats to their businesses,” Dr. Elabdelwahab said. “What do you do when the person has absolutely no experience or knowledge in the business they want to start? How do you adjust and fine-tune the program to make it better not only in substance and delivery but make it a better experience for the entrepreneur?” This is some of what was involved in the re-engineering of Riyadah.

In the middle of 2010, after the re-engineering of the organization, Riyadah had its official start as a stand-alone organization distinct from the SMBDC program function it had with TVTC. In 2011, Riyadah had achieved full operations with programs and activities eventually being offered at 25 male and 14 female branches and three liaison offices in the Kingdom. Those who benefit from the full range of Riyadah's training programs, support services, and award activities occur in 68 cities within the Kingdom of Saudi Arabia. Besides helping the prospective entrepreneur drill down on critical skills and developmental understandings of how to successfully administer and grow one's own business, Riyadah also provides instruction and insight on other crucial aspects of starting a business in Saudi Arabia. Training on these aspects include promoting one's own business ideology, building positive beliefs toward small businesses, and promoting awareness of the importance of cultural values in developing one's business.

The branch and liaison offices are run by Riyadah local branch coordinators who are in charge of managing the delivery of the programs, administration of the local offices, and, in most instances, instructing Saudi trainees. Dr. Elabdelwahab refers to them as Riyadah's “soldiers” without whom the fight for entrepreneurial advancement through the use of the organization's program systems would not be possible. Riyadah is able to maintain a bank of knowledgeable and capable professionals as its coordinators through an active “train-the-facilitator” program. In this way, Riyadah has been able to multiply their number and activity level of each branch office opened in the Kingdom.

In 2012 and 2013, Riyadah created e-training and e-solutions training programs for existing entrepreneurs with active businesses that lack the time to make their way through extended Riyadah course materials, but want to enhance the management and growth of their companies. The growth of Riyadah's Internet-based services and training solutions to Saudi entrepreneurs is impressive and reaches any aspiring or current business person with an Internet connection along with a computer, tablet, or smartphone. Riyadah understands and is taking full advantage of the phenomenal growth in mobility occurring within the Kingdom.

Dr. Elabdelwahab further related that the use of Riyadah's e-portal platform is also used to train aspiring entrepreneurs through the 24-step program of Riyadah's entrepreneurship program. Saudi entrepreneur-trainees, in over 81 Saudi cities across two million square kilometers have the ability through Riyadah's e-training platform to complete 20 of the 24 steps necessary to meet Riyadah's requirements for successfully matriculating its course materials.

Riyadah's relationship with the TVTC remains quite active. Thirty-four percent of business start-up applicants to Riyadah program come from the TVTC. The TVTC has an extensive reach and access to all of the Kingdom's universities. since its beginnings, however, Riyadah has expanded its collaborations beyond its linkage with the TVTC. Riyadah has an active collaboration with the International Labor Organization (ILO) and is one of the ILO's strategic partners in delivering the ILO “Know About Business” (KAB). The ILO, an esteemed and multi lateral global institution that serves the interests of working men and women by fostering the cooperation and coordination between governments, its private sector, and workers together in order to set labor standards, develop policies, and create programs, promote social and economic growth and well-being. It is headquartered in Geneva, Switzerland, and has its International Labor Office, the permanent secretariat of the ILO, located in Geneva. It has offices around the world.

The ILO's KAB entrepreneurship awareness training program is being offered in the Kingdom through Riyadah and is run by local certified trainers in optional practical training (OPT). OPT is a period during which undergraduate and graduate students with a specific designated immigration status who have completed or are pursuing degrees for a specific period are allowed to work and thereby gain practical experience in their chosen fields.

The ILO KAB program was established in the 1990s and is meant to benefit “teachers in general secondary education, trainers in vocational and technical training institutions, and higher education professors trained to deliver KAB course content and be certified as KAB national facilitators.”³⁰ The KAB program has been an invaluable tool in Riyadah's toolbox and has been allowed to supply an adequate stream of qualified entrepreneur instructors in each new office it opens in the Kingdom. It is this “training the facilitator” feature of Riyadah in multiplying those that offer instruction of aspiring entrepreneurs that is a distinguishing feature of the organization among business promotion entities in the Kingdom.

The 10 modules offered in the ILO KAB program curriculum are: (1) What is enterprise? (2) Why entrepreneurship? (3) Who are entrepreneurs? (4) How do I become an entrepreneur? (5) How do I find a good business idea? (6) How do I organize an enterprise? (7) How do I operate an enterprise? (8) What are the next steps to become an entrepreneur? (9) How does one develop one's own business plan? and (10) a social entrepreneurship module.³¹ The ILO touts the strengths of the KAB program as: “Interactive, learner-centered, and participatory methodology of teaching and materials; step-by-step training for teachers/trainers/professors; adaptability to requirements of national curricula; can quickly achieve scale and sustainability, being implemented through national educational structures; transfer of re-training potential to national constituents through building core groups of KAB key facilitators inside the education system (often at training of trainers institutes); [and] KAB methodology being updated every two years.”³² I think it is the thoroughness of the KAB program delivered by Riyadah combined with the reach the organization has through its branch offices and cooperation with the TVTC that accounts for its actual results and success.

Riyadah has complete training packages in six critical areas of entrepreneurial development:

• Training
• Consultations
• Mentorship
• Incubation
• Financing attainment
• Permits assistance

Riyadah's unique brand of entrepreneurship promotion and training and the effectiveness it has recorded over the years is institutionalized in its Erada services program. Erada is Riyadah's “Start Your Own Business” training service. (not to be confused with Erada Advanced Projects, a wholly owned Saudi company in Riyadh). Erada first measures the Riyadah trainee's aptitude for entrepreneurial pursuits. It next helps the trainee develop his or her idea for the business. Next, providing the requisite skills to start and run his or her own businesses, Riyadah instructs and guides the aspiring entrepreneur through a series of lectures and challenges that show the trainee what entrepreneurship means and the life significance of starting one's own business. Riyadah and its skilled workforce help trainees explore alternative sources of financing for starting their business. They assist the trainees with acquiring required licenses, permits, and authorizations for legally running their business. They also assist the trainees in obtaining any equipment necessary to operating their business. Once up and running, Riyadah provides consultation services and mentoring throughout their first year of operation in order to optimize their chances for success.

There is no “come one, come all, accept all” sign outside Riyadah's door. I believe the reason why Riyadah has achieved such levels of success has much to do with the amount of attention and examination it takes in assessing each Riyadah trainee applicant. The process of making it into Riyadah is relatively involved and rational in its structure. With the exception of indigents or the financially distressed applicants, all applicants must pay a fee of US$266 (SR1,000) before they can engage in the simulation training Riyadah provides. According to Dr. Elabdelwahab, this application fee not only covers the cost of developing the business plan, but it also provides some level of confidence on the part of Riyadah that their applicants are fairly serious in their aspirations.

The application fee, evaluation, matriculation, and support process of Riyadah's Erada program is presented graphically in Figure 5.1.

The process begins with an application. Most applications are filed online through their e-application system. The application is evaluated during the approval process with additional information sometimes requested. A thorough interview is conducted of the applicant and a decision is made whether to send the applicant directly to simulation training or to an ancillary training assessment session called “ideation training.” Before joining with Riyadah's intense simulation training modules, plan development, and support programs, the ideation training helps fill in some of the blanks an entrepreneur trainee may have in the full development of his or her ideas for their business and clear identified paths toward the implementation of the idea.

Riyadah then takes trainees through a series of program exercises in which they go through a one-day simulation in which they are confronted with multiple problem-solving and trouble-shooting exercises. After the one-day simulation program there are other simulations that follow. The process is a rigorous system to identify and test a trainee's existing abilities and strengths to cope with the many obstacles and challenges that arise in a new or growing business. Trainees spend at least four hours a day for six weeks creating and developing a viable business plan. With the help and guidance of Riyadah staff members, trainees are able to improve and polish their business plans. After final submission of authenticated business plans are made by trainee, a committee reviews each plan's feasibility and readiness for the next phase in the Riyadah system. The committee either approves it or declines each plan. After approval and its being judged ready, the trainee and the Riyadah team then move the plan to the financing phase. The plan goes to the SCSB for review and a determination as to whether it will be funded. The financing review process normally takes approximately 45 days. Following final notification that his or her business plan has been approved for financing, the trainee then has 90 days within which to start the business.

After the successful launch of their businesses, graduates of the Riyadah program receive support and counseling months after starting their own companies. This kind of “cradle-to-cash” care Riyadah devotes to each of its trainees has allowed it to experience exceptionally high success rates.

In January 2015, reporting 2014 end-of-year results, Dr. Elabdelwahab reported to the press that by December, Riyadah had trained 9,447 out of 10,000 targeted trainees. Seventy-nine hundred Saudis were approved for loans from among the 10,000 who had completed their business plans and another 1,000 businesses had been in the process of opening their operations. Forty-seven hundred and twenty young Saudi entrepreneurs have started their own business enterprises in 181 business categories.³³ Riyadah's successful track record resonates well past its own corporate halls. The organization continues to work with partners and collaborate with government institutions to transmit its message that entrepreneurship for the individual is life-transforming and a meaningful livelihood.

Riyadah has contributed to the awareness of Saudi graduates of the King Abdullah Scholarship Program by offering entrepreneurship training from Riyadah's “Develop Your Business Idea” (DYBI) program. Riyadah has also offered over 8,000 young Saudis selected for the Saudi Arabian Ministry of Education's summer camps program throughout the Kingdom the opportunity to learn about entrepreneurship and the rewards from a life in business. I believe this will be one of the most enduring and most laudable legacies for Riyadah, the spirited encouragement to greater number of Saudis for them to think in a different way. They're leading Saudis, through actual instruction and training, how to conceptualize the source of sustenance for their lives extending beyond a future of government jobs or publicly dispensed dole.

THE CENTENNIAL FUND (TCF)

From the very beginning, the Centennial Fund (TCF) has had the highest support acquirable from Saudi Arabia's royal rulers. In July 2004, with the greatest interest in and recognition of the importance of the Saudi private sector and its development to the national economy, His Royal Highness Prince Abdulaziz Bin Abdullah Bin Abdulaziz Al-Saud, fifth-born son of His Majesty, the late King Abdullah Bin Abdulaziz Al-Saud, founded the Centennial Fund. HRH Prince Abdulaziz Bin Abdullah serves as TCF's chairman of the board of trustees. On July 8, 2004, the late King Fahd Bin Abdulaziz Al-Saud approved the formation of TCF and it was legally established by royal decree No. 190/A.³⁴ It was and continues to be an initiative supporting the wishes of King Fahd, late King Abdullah Bin Abdulaziz Al-Saud and Saudi Arabia's current King Salman Bin Abdulaziz Al-Saud contribute to equipping young Saudi entrepreneurs with the foundational knowledge, relevant skill sets, coaching, and financial resources to start and grow their own small and medium-sized businesses in the Kingdom. The vision of the founders of TCF was to facilitate the impact young Saudi entrepreneurship would have on the positive economic trends in the Kingdom and in turn for those entrepreneurs to gain from those trends.

At its creation, the TCF had the most influential and powerful leaders of the Saudi Arabian government and private sectors behind it, supplying advice, financial resources, and direction so it could fly off the ground when it began operations. In fact, one of the most revealing facts about the entity's beginning is its collaborative relationship with the General Investment Authority of Saudi Arabia (SAGIA).

SAGIA is the Kingdom's one-stop shop for preinvestment and postinvestment assistance. On paper, SAGIA was established on April 10, 2000, on the authority of Resolution No. 2 of the Saudi Arabian Council of Ministers. It was created to aid in implementation of the Saudi Arabian government's newly minted Foreign Investment Law of 1999. It is promoted and recommended as the first resource and assistance consultation any potential foreign investor should make as it may begin the process of capital investment within the Kingdom. That is what SAGIA is on paper. It has grown, however, to become much more than a consultation resource and paper mill.

As in most countries from the private sector's perspective, government bureaucracies often present special challenges to a company's intention to enter a host country's market, satisfy local law requirements, hire the necessary human resources, get its offices, plant, or operations up and running, and subsequently achieve profitability. Even a country possessing world-class and transparent investment policies and enforced laws and regulations will often encounter complaints from foreign investors as to how laws and rules are interpreted and applied.

While serving in the commercial section of the U.S. embassy in Riyadh and having assisted hundreds of American companies seeking to do business in Saudi Arabia, I can attest to SAGIA's reputation as an effective resource for foreign investors as they seek to navigate some of Saudi Arabia's bureaucratic thickets, solve seemingly inconsistent procedurally applied rules, and deal with the occasional thoroughgoing and unequivocal riddles that would confound even the most astute and erudite local and international commercial law attorneys. SAGIA's able leadership and the competent cadre of staff professionals that run SAGIA's Investor Service Center and Government Relations Unit continue to serve as invaluable resources to foreign investors into the Kingdom. SAGIA has the authority to license foreign investment projects, coordinate with other government ministries and agencies, and provide critical information required by investors in following through with their investment decisions. SAGIA has representatives from multiple ministries and agencies in-house to provide quick answers and procedural facilitations during the investment application process.

SAGIA has been led and continues to be led by a group of most able leaders. SAGIA's first governor was His Royal Highness (HRH) Prince Abdullah Bin Faisal Bin Turki Al-Saud, who served from 2000 to 2004. HRH Prince Abdullah Bin Faisal now serves as Saudi Arabian ambassador to the United States, having assumed his ambassadorial posting at the royal Saudi Arabian embassy in November 2015. SAGIA's next governor was Amr Al-Dabbagh, who served in that capacity from 2004 to 2012.

SAGIA's current governor is His Excellency Abdullatif Bin Ahmed Bin Abdullah Al-Othman. A former senior vice president of Saudi Aramco with over 30 years of experience in planning and managing oil and gas projects, H.E. Governor Al-Othman succeeded Amr Al-Dabbagh in May 2012 with the rank of minister. A Massachusetts Institute of Technology (MIT) graduate, Governor Al-Othman is a man of formidable intellect and fully satisfies his reputation as an exceedingly competent planner and organizational tactician. I have had the opportunity to work closely with Governor Al-Othman and SAGIA. The USSABC collaborated in the organization and planning of the Washington, D.C. September 4, 2015, “U.S.–Saudi Investment Forum” held in conjunction with the visit of His Majesty King Salman Bin Abdulaziz Al-Saud³⁵ and that evening's dinner in honor of His Majesty King Salman. Along with Saudi Aramco, I worked with Governor Al-Othman and had the opportunity to observe a sampling of his capabilities at close range. Undoubtedly, SAGIA continues to be well served by the governor's exceptional leadership.

What is most revealing about SAGIA and TCF is how quickly after the TCF's creation was it placed in a collaborative relationship with SAGIA. As mentioned, TCF was established by royal decree on July 8, 2004. On July 20, 2004, TCF signed a collaborative agreement with SAGIA “to work together in helping Saudi entrepreneurs to translate their commercial ideas into projects.”³⁶ Then SAGIA governor, Amr Al Dabbagh, signed the SAGIA-TCF partnership agreement with the founder of TCF, HRH Prince Abdulaziz Bin Abdullah. Mr. Al-Dabbagh currently serves as chairman of the board of directors of the Al-Dabbagh Group, a 50-year-old family conglomerate headquartered in Jeddah, Saudi Arabia. This FOB was founded in 1962 by His Excellency Sheikh Abdullah Al-Dabbagh, former Saudi Arabian minister of agriculture. When he served as SAGIA's governor at the time of TCF's establishment, Amr Dabbagh served as chairman of TCF's board of directors. Former Governor Al-Dabbagh was a strong supporter of the July 2004 partnership agreement and named numerous initiatives between SAGIA and TCF during his tenure. Mr. Al-Dabbagh sits on TCF's board of trustees and served just beneath HRH Prince Abdulaziz Bin Abdullah as the board's vice-president.

The Centennial Fund describes its aims as: “…to enable the new generation of Saudis to achieve financial independence through starting their own businesses through training, mentorship, government support and soliciting loans, transforming them from job seekers to job providers.”³⁷ The TCF operates a number of initiatives and international collaborations in its mission to bring more Saudis into the world of entrepreneurship and sustain them in their successes. It actively seeks to expand the Saudi entrepreneur ecosystem through these initiatives and partnerships. This work includes offering business networking opportunities, supporting entrepreneurs through general and specialized training, securing legal advice for the entrepreneur, assisting in feasibility studies, marketing advice, counseling and educational services, supplying financial help, providing assistance to entrepreneurs in dealing with government, and assisting entrepreneurs with developing their technologies.³⁸

One of TCF's most interesting initiatives is called “international academy for entrepreneurs.” The Centennial Fund has created an international academy for entrepreneurs in order to broaden the proposed training and empowering programs for youth. Several courses on the fundamentals of technology entrepreneurship, with global partners like Robotics Centre, Microsoft, the Intel Program for Innovation, Blackberry Academy, and the 3-D Printing Center, provide the process technology entrepreneurs use to start technology-based companies, or to use it. It involves taking a technology idea and finding a high-potential commercial opportunity, gathering resources, such as talent and capital, figuring out how to sell and market the idea, and managing rapid growth. To gain practical experience alongside the theory, entrepreneurs form teams and work on start-up projects in those teams. A lot of students and young Saudis participated in these programs.

The Global Entrepreneurship Forum (GEF) is an annual event that gathers international leaders in business and entrepreneurship in one location for the purpose of sharing insights, exchanging best practices, and generating exposure for the latest trends and innovations in the global community of entrepreneurs. The Centennial Fund (TCF) launched this initiative in 2013 as an extension of the annual HRH Prince Abdulaziz Bin Abdullah International Award for Entrepreneurship.

The theme of this year's forum is Innovation in Social Enterprise, as the GEF explores the viability of solving a variety of social issues, both locally and globally, through the vehicle of entrepreneurship.

The annual awards were launched by His Royal Highness Prince Abdulaziz Bin Abdullah Bin Abdulaziz as an initiative of the Centennial Fund, under the supervision of the advisory council. The aim of the program is to encourage entrepreneurial projects and to celebrate the owners of such projects in the Kingdom through commendations and awards.

One of TCF's initiatives is called “Business in a Box,” which basically constitutes a “plug and play” approach to launching a young Saudi who wants to start his or her own business. It is a start-up process TCF says is completely automated and provides all of the “tools, documents, and steps along with the idea of a successful and an innovative enterprise.”³⁹ Essentially, these are ready-made businesses “in a box,” already created by TCF in 26 fields, waiting for someone to plug in and start a company.

The Centennial Valley (CV), another TCF program that is a catalyst for business incubators supplying an array of integrated services. The first CV was established in King Abdullah Economic City (KAEC). Since then, CVs and their incubator services have been established and operate within Imam Muhammad Ibn Saud Islamic University, Al-Sharq University, Hail University, Al-Qassim University, Taiba University, King Abdulaziz, Al-Jouf University, and Jazan University.

TCF maintains an impressive array of international collaborations, quality control systems, and accreditations with world-renowned organizations. Although not an exhaustive listing, the following are organizations with whom TCF has active collaborations: Gulf Cooperation Council of Entrepreneurs (GCC UE); Young Entrepreneur's Alliance G20; Asian Entrepreneurs of Alliance; World Alliance of Young Entrepreneurs; the Clinton Global Initiative; Youth Business Singapore; United Nations for Industrial Development Organization (UNIDOBahrain); Microsoft; and Shell.

One of the distinctive attributes of TCF is that its approach to assisting entrepreneurs is often guided by the best practices and model systems it is exposed to through the international collaborative agreements it maintains. This is important to the organization because one of TCF's bedrock principles of operation. Its mission is to constantly look at ways in which to diminish the barriers to entrepreneurship for aspiring or existing Saudi business people. TCF Director General Dr. Abdul Aziz Bin Hamoud Al-Mutairi recently adopting new methodology aiming to change the culture of the local community. These perspective changes are supported by the government's new objectives of using new business models such as Education for Entrepreneurship and Employment (E4EE) in addition to another of TCF's new initiatives called childpreneurs. After the Centennial Fund's studies and experiments in addition to access to the world's best experiments, we found that the best model is to provide integrated services that contribute to the reduction and limitation of these challenges.⁴⁰

Similar to Endeavor, TCF has its own management system for the induction of entrepreneurs into its programs and their care during the process of bringing their business dreams to life. Its course of care is called the “Entrepreneur Management System” (EMS). TCF's EMS protocols begin with intake procedures requiring registration and verification of the applicant's data. Next, the applicants will go through an education phase (academy) depending on his business idea to give the applicant the required skills and knowledge to start a business. In recognition that acquiring funding for one's business venture is one of the most challenging blocks for an aspiring entrepreneur, TCF works with the entrepreneur in submitting loan applications for their proposed business project.

After undertaking the business and obtaining funding, TCF's EMS takes the entrepreneur through its integrated web-based system, which matches them up with mentors, and having multi-continuous follow-up and in addition to giving the applicants the chance to access all given support for the SMEs through many of TCF's strategic partners. At any time, the TCF entrepreneur is able to submit service requests and check his or her status online. TCF EMS protocols include online reports and performance charts that inform the entrepreneurs, trainers, mentors, and others on the risk of the entrepreneur's performance and fledgling business, needed adjustments to executing the plan, and monitoring the entrepreneur. This integrated approach in TCF's EMS, as well as the other initiatives of TCF, are indicative of the organization's approach of scanning the globe for the best practices in delivering impactful entrepreneurship empowering structured programs. As within any organization that purports to support and counsel would-be entrepreneurs, the proof of its effectiveness is usually quantitatively measured in some way. I've met with TCF Director General Mr. Abdul Aziz Bin Hamoud Al-Mutairi to discuss TCF and its successes in getting more young Saudis into their own businesses. Director General Al-Mutairi credits TCF's positive impact, growth, and continuing recognition to the enduring support of its founder, HRH Prince Abdulaziz Bin Abdullah. Mr. Al-Mutairi pointed to the fact that throughout its existence, HRH Prince Abdulaziz has taken great care to safeguard and advance the founding principles of TCF in all of its initiatives and any of the organization's new directions of expansion. It has been the appreciation of youth projects to the economy, the importance of equipping young Saudis with the tools to surmount the many obstacles faced by the entrepreneur, and the constant search for best practices in supporting the entrepreneur that, the director general says, has kept the TCF effective and relevant.

Director General Al-Mutairi believes, as others have voiced to me, that there are many challenges faced by today's Saudi entrepreneur. I asked him about the issue of how failure in business is faced by Saudis in the Kingdom. He said: “This subject of business failure and the impact on the failed business person is a serious one. It can be the kiss of death for any entrepreneur in the Gulf due to cultural influences. Yes, the cultural challenges are strong. And, the government, private sector…everyone should do more to handle this problem.” The director general pointed out that Gulf entrepreneurs come from a heritage of trading and merchant businesses. For this reason, he said, the same culture that presents challenges for business failure at the same time has the potential to give the Saudi entrepreneur an advantage.

I also discussed the recurring question in this book, that of the existence or even prevalence of the “fire in the belly” of Saudi entrepreneurs. Director General Al-Mutairi said he does find evidence of the passion for business that many Saudis have when they comes to TCF for support and guidance. He said he believes it is the support from TCF and other entrepreneur support organizations in the Kingdom used in nurturing and growing this passion for business by young Saudis that will lead to the positive economic impact all Saudis want to see coming from more and more Saudis with their own successful businesses.⁴¹

SAUDI TECHNOLOGY DEVELOPMENT AND INVESTMENT COMPANY (TAQNIA)

The Saudi Technology Development and Investment Company, or TAQNIA as it is commonly known, is one of the Kingdom's best examples of a Saudi public institution that combines a focus on advanced technology and entrepreneurship. It places high priority on all three. It is the Saudi Arabian government-owned investment arm that works to contribute to the diversification of the country's economy and the Kingdom's push toward knowledge-based industries. Established by royal resolution No. (M/47) on June 22, 2011, and based on action taken by the Council of Ministers through Resolution No. 217, dated June 21, 2011. It is a joint stock company fully owned by the Kingdom's Public Investment Fund (PIF). From its inception, TAQNIA's objectives included securing the transfer of strategically important technologies, commercializing its developed innovations and technologies, supporting growth of the country's GDP, diversifying the economy, and contributing to the creation of high-quality jobs.

TAQNIA's vision is: “to drive accelerated diversification of the Kingdom's economy through knowledge-based industries, thereby creating value-adding jobs, and to help create an innovative ecosystem in the Kingdom.”⁴² Its mission is to: “[a]chieve its vision by investment in local and global technologies and actively engage in the development and growth of those technologies into economically sustainable enterprises.”⁴³ TAQNIA states that key inputs to its operational goals and agenda are the goals and guidelines of the National Industrial Strategy (NIS), discussed in Chapter 2, and the National Knowledge Economy Plan.

TAQNIA's chairman of the board of directors is His Highness Prince Dr. Turki Bin Saud Bin Mohammad Al-Saud, who also represents King Abdulaziz City for Science and Technology (KACST) on TAQNIA's board. His Highness is truly a towering figure within Saudi Arabia among those who purport to be champions of innovation, entrepreneurship, and the development of advanced technologies. His Highness has been the author and at the forefront of major initiatives and programs within the Kingdom, and his background is worth noting.

His Highness received his PhD in aeronautics and astronautics from Stanford University, and joined KACST in 1997. Dr. Turki Bin Saud became the director of the newly established space research institute within KACST. In 2004, Dr. Turki became the vice president for research institutes of KACST and the chairman of the science council. He is chairman of the supervisory committee of the national science and technology plan; the boards of several joint nanotechnology centers set up in collaboration with leading world universities and companies; and the board of the National Technology Incubation program, BADIR. Dr. Turki was also one of four team members that translated the vision of the late King Abdullah Bin Abdulaziz Al-Saud and wrote the charter for KAUST. He has been a driving force within KACST and the Saudi science and technology community for collaboration, innovation, creativity, and effectiveness in policy development and execution. It has been under His Highness's leadership that KACST and TAQNIA experienced a deepening of the support structure for Saudi entrepreneurship.

TAQNIA Chairman Dr. Turki Bin Saud is ably served by the other board of directors of TAQNIA, and they are: Mr. Abdullah Bin Ibrahim Al-Iyadi, TAQNIA vice chairman and representative of the Public Investment Fund; Dr. Mohammad Bin Abdulaziz Al-Ohali, representative of the Ministry of Higher Education; Dr. Ibrahim Bin Abdulaziz Al-Hinaishill, general manager of Saudi Credit and Savings Bank; Dr. Ammar Adennan Alnahowi, representative of Saudi Aramco; Dr. Fahad Bin Abdulaziz Al-Shuraihi, representative of Saudi Basic Industries Corporation; and Dr. Abdullah Bin Hassan Al-Abdulqadir.

TAQNIA is actively developing and acquiring scientific and technological expertise through collaborations, strategic alliances, and technology licensing arrangements in order to present industrial opportunities to the Kingdom. TAQNIA has kept up a blistering pace of accomplishments and their work centers on 29 industrial categories from which they promote opportunities to local and foreign companies and institutions. TAQNIA has achieved the initial phase of success in 17 of the 29 categories. The organization is experiencing ongoing successes in launching joint ventures with local and global technology leaders and investors. This has burnished their reputation and their own goal of swiftly moving the Kingdom within reach of being a knowledge-based-dominated economy. The main areas for which TAQNIA seeks out joint ventures and collaborations around the world are: life science and health; security and defense; information, communications and technology (ICT); material science, energy and environment and water technology.

TAQNIA has established a number of subsidiaries to support its mission. They are as follows: TAQNIA Cyber, a government-owned company specializing in information security, communication security, and signals intelligence; TAQNIA Space, pursuing the manufacturing of satellites, providing secure satellite communications and high-value remote sensing data; TAQNIA Defense, which is to develop and deliver defense and security technology solutions, build, develop, and produce defense and security technologies through local and global strategic partnerships; TAQNIA Services, a domestic service provider in the fields of technology management and commercialization and engineering and technical services; TAQNIA Services, a firm offering consulting and management advice in technology strategies, technology and innovation programs, commercialization of R&D outputs, and high-quality engineering and technical services; Technovia, a national center for translational R&D in Saudi Arabia with a focus on building technology innovation and commercialization capacities, bridging the gap between research outcomes and successful industries; and advanced water technology (AWT), which develops affordable water solutions throughout the entire water value chain by using innovative technology and excellence.

TAQNIA is active on several fronts in the support of entrepreneurism within the Kingdom. Its TAQNIA Services subsidiary has a strategic alliance with KACST, Saudi Aramco, KAUST, KFUPM and RTI International, which serves to scale R&D activities within the Kingdom to ensure the fruits of those projects are ready for commercialization. The non-Saudi partner, RTI, is one of the world's leading research institutes. An American research institute, RTI, is headquartered in North Carolina and has a staff of more than 3,700, and provides research and technical services to governments and businesses in more than 75 countries. RTI is located in North Carolina's Research Triangle Park, one of the largest research parks in the world. RTI's areas of service excellence and expertise are: health and pharmaceuticals, education and training, surveys and statistics, advanced technology, international development, economic and social policy, energy and the environment, and laboratory testing and chemical analysis.

The TAQNIA Services alliance has been set up to actually use some of the intellectual properties produced by all Saudi research centers. It will scale them up to be ready for consumption by Saudi industrial activities.⁴⁴

Besides facilitating the commercialization of IP out-turns, TAQNIA Services also aids technology startups by providing support in areas such as investment finance, legal, technical assistance, advisory consultancy, marketing and strategy, and business development.⁴⁵ The support role TAQNIA was given in the area of financing entrepreneurship was directed soon after TAQNIA was formed. In October 2012, His Highness Prince Dr. Turki Bin Saud Bin Mohammad Al-Saud announced a venture capital fund would be established by TAQNIA to support startups and other projects that serve the interests of the Kingdom's objectives of diversifying the economy, broadening the Saudi industrial base, and adding to its intellectual property stockpile of advanced technologies.

I had the opportunity to interview the chief executive officer of TAQNIA International, Mr. Fahad Alhussain. He also serves as a consultant to the board of directors of TAQNIA Holding. Through TAQNIA International and TAQNIA Holding, the parent, TAQNIA, is building a powerful and growing portfolio of investment holdings and IP assets reflective of the range of technologies it continues to pursue around the world. Mr. Alhussain is the right combination of businessman, financial capitalist, able administrator, and deal hunter.

Since 2012, when he assumed the role of CEO with TAQNIA, Mr. Alhussain has built TAQNIA from a start-up to a holding company with more than 16 subsidiaries. He is a prominent member of the business community and widely known within the Kingdom's ICT sector. Before joining TAQNIA, Mr. Alhussain was CEO of International Systems Engineering (ISE), an economic offset company in Saudi Arabia specializing in the provision of technological solutions and support of large-scale defense projects. Under Mr. Alhussain's leadership, ISE grew 600 percent. Before ISE, he was tapped to manage the Saudi Internet service provider (ISP) industry's major merger of AWALNET, NASEEJ, and ALALAMIAH. While Mr. Alhussain was at AWALNET, the company's revenues doubled and he engineered the company's acquisition by Saudi Telecom Company (STC), the largest provider of telecommunications services in the Kingdom. He was also on the team that brought about the launch of Saudi Arabia's first satellite, SAUDISAT 1. He holds numerous board positions, including BADIR ICT.

During my interview, I spoke with the TAQNIA CEO and discussed a number of subjects, including the importance of innovation and technology to the Kingdom's future, the promise Saudi startups and entrepreneurship hold for the country, and the role of SMEs in the Kingdom's future economy.

During my discussion with him, Mr. Alhussain highlighted the role of TAQNIA in the promotion of entrepreneurship. He outlined the history of TAQNIA, which began with its chief mandate of contributing to the diversification of the Saudi economy. Specifically, he said, at the time our slogan was to have TAQNIA be “the SABIC of technology.” After the usual parade of consultants and in-depth studies in preparation for the creation of TAQNIA, what emerged were the three main areas of subject concentration for the organization, which were: (1) investment attraction and promotion; (2) industrial development; and (3) the R&D developmental services.

In terms of investment attraction and promotion, TAQNIA Holding was the first entity in the Kingdom established by the Saudi government to function as a venture capital firm. Mr. Alhussain said, “In this business line, we initially threw a rock in a pond whose waters were quite still and caused a ripple effect resulting in such an impact that today, everyone in the Kingdom is talking about venture capital. TAQNIA was the first.” He said that to see the establishment of TAQNIA, the first government-funded Saudi venture capital firm, in an investment environment historically considered to be very conservative was quite a momentous occasion. It took much effort to gain the trust of TAQNIA's prospective shareholders.

One of the first important steps in this direction was to gain Riyadh Capital Bank as a shareholder. This backing eventually led to the formation of TAQNIA's first venture capital fund. On December 22, 2015, His Highness Prince Dr. Turki Bin Saud Bin Mohammed Al Saud, president of KACST and chairman of TAQNIA, inaugurated the Riyadh Taqnia Venture Capital Fund, with an initial capitalization of US$120 million. In announcing the fund, His Highness emphasized that “the establishment of this fund is one of the essential tools to achieve the Kingdom's transformation into the knowledge economy, which is adopted by the government of the Custodian of the Two Holy Mosques King Salman Bin Abdulaziz Al-Saud, to turn the Saudi economy into a knowledge-based one through securing robust organizational and technological infrastructures as well as the efficient resources to provide support and encouragement to small- and medium-sized enterprises (SMEs) so as to invest in high value-added technological areas.⁴⁶

Mr. Alhussain pointed to how the new investment strategy by the PIF is to seek out investment opportunities that have a strategic value returns regard to serving the development goals of the Kingdom as opposed to purely monetary returns. Riyadh Taqnia Venture Capital Fund will operate within the Kingdom and internationally. The fund's strategy will focus on investing in startups and other companies for which there is a huge upside for the development and industrial growth and expansion priorities of Saudi Arabia. An example, Mr. Alhussain stated, was in the area of water desalination. He said, “Today, the Kingdom is now the largest producer of desalinated water in the world, satisfying approximately 20 percent of global demand. If we had invested and taken equity position in the leading technology companies in this field years ago, we would have not only benefited financially, but we would have proprietary rights in a technology that has high use and value inside Saudi Arabia.”

Seventy-five percent of the new fund will focus on investments in the United States, Europe, and technology investments from other developed countries, while 25 percent will be devoted to investments emanating from within the Kingdom. So, Mr. Alhussain pointed out, there is a two-pronged investment approach. When a technology startup or existing enterprise has attractive technologies in areas of developmental priority for the Kingdom, and the enterprise has a high promise of profitability inside the Kingdom, it is then that the prospective investment would be a target for the new fund. So, Mr. Alhussain stated: “We are not a silent investor but rather an investor that would need to grow the company actively while pursuing its ultimate profitability, thereby exacting our returns on investment.”

Of no less importance, but less commented on by Mr. Alhussain was the second and third areas of industry development and R&D developmental services. Concerning industry development, he said this can be described as mimicking the petrochemical giant SABIC, but in TAQNIA's case, for the area of technology. In the R&D developmental services area, it is TAQNIA's responsibilities to help in the commercialization of technologies. Normally, TAQNIA would come in as a late-stage investor. TAQNIA Holding's subsidiary, TAQNIA Services, is engaged in this area of commercialization facilitation.

During the interview, Mr. Alhussain graciously provided me with his opinions on the important themes of this book. Specifically, when I asked him about his opinions on how an entrepreneur should be defined, he expressed great interest in the question. He related how when BADIR was established, he served on its board. He served on a committee to evaluate the first entrepreneur applicants to BADIR. These applicants came to BADIR seeking funding for their ventures. The committee faced the question of who should be considered an entrepreneur and receive acceptance into the BADIR program. As Mr. Alhussain recalls, there were 108 applicants. Some of them were seeking to start old or existing businesses. So, he said, out of the 108 applicants, the committee ultimately accepted eight for admission into the BADIR program. The elimination of the unselected applicants was primarily based on whether the applicant was starting some type of business other than that which was based on a new idea, technological solution, or new-to-market technology. What Mr. Alhussain was saying is that the committee was looking for creative destruction among the applicant's venture ideas.

Another question on which Mr. Alhussain offered his opinion was whether the third- or fourth-generation FOB executives should be considered entrepreneurs. Mr. Alhussain sees the dichotomy of the issues when you view a third- or fourth-generation FOB family member in the family business with little at stake, yet he or she is trying to do something different in an entrepreneurial spirit. He told me that in this regard, the BADIR experience is quite useful. To many who have dealt with BADIR or those who have pursued access to its programs tend to believe entrepreneurs can be produced swiftly with little effort. However, he pointed out, it takes a whole ecosystem with all of its support functions to produce successful entrepreneurs. This is where he sees the useful function of the type of entrepreneurial ecosystem within an FOB. Those family members and FOB working environments tend to act as an ecosystem that would nurture the new ventures attempted by that third or fourth generation FOB business executive. BADIR's incubation program is one of the best that Mr. Alhussain has been close to and he said he saw the real benefits of having a 360-degree support system within which the growth of an entrepreneur is tended to on a daily basis.

The last question posed to Mr. Alhussain to which he responded related to his opinions as to the general environment for the Saudi entrepreneur. He expressed considerable optimism for the entrepreneurial ecosystem in the Kingdom. He sees great support from the government these days, particularly when it comes to the Saudi government's initiatives to change the Kingdom's laws pertaining to startups and the area of bankruptcy.

What also inspires Mr. Alhussain's optimism is the changing mentalities on the part of Saudis when it comes to starting their own businesses. He attributed some of this to the tens of thousands of Saudi students coming back to Saudi Arabia after having studied abroad. Mr. Alhussain sees them coming back with a heretofore-unseen enthusiasm to start their own businesses and new ventures. In a generally risk-averse society, Mr. Alhussain sees considerable reason for optimism when he views the changes in Saudi attitudes on this subject.