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THE LAST WORD with Saeed Al Muntafiq
Whilst business continues to flourish across the region, many still believe that the key ingredients that foster outstanding homegrown innovation are lacking.
July 14, 2013 1:12 by kippreport
Former Executive Chairman of Dubai based Tatweer and current Chairman of Rise UAE talks to Kipp’s sister publication TRENDS about entrepreneurship, risk taking and the need for the region’s youth to adjust their mindsets.
One of the biggest challenges we face in the Arab world is that we tend to, more often than not, look to the West in trying to create platforms, in whatever they may be, whether it is technology, business, culture or education.
SME creation cannot exist with us continuing to look to the West and hoping one day we will have a Mark Zuckerberg emerging to launch a global brand. It has to be enabled by what I call the ‘SME market creation’ – it has to be physically created and then enabled. This creation has three foundations; government policy-making, the entrepreneur or SME owner, and lastly, the environment and mindset within the Arab world.
Firstly, what is critical for government policy-makers is to be involved with the funding space; this space is not just about lending money or creating an incubator. Commercial laws need to be adjusted in order to accommodate start-ups and SMEs to flourish and at the core of these laws should be bankruptcy legislation and remedial procedure that avoid punishment of failure.. This whole notion of creating an environment and culture of risk has to start with walking the talk; this in itself has to start with us telling the youth that you can start your own business and if the worse case should arise, here is the criteria upon which you can announce your commercial failure.
Governments need to also start to ask the large home-grown companies, who normally employ the larger more established service providers, to procure business from the SME space – this is where the government of Dubai and HH Sheikh Mohammed bin Rashid al Maktoum has shown great vision in the past. Over ten years ago His Highness instructed the SME division to create the procurement programme, whereby forcing Dubai government companies and departments to spend five percent of their procurement budget with startups and SMEs.
Standards must be developed and this is generational. We cannot set the tone and expect the youth to take the leaps we need if we continue to celebrate and reward existing businesses, whilst simultaneously not supporting the entrepreneurs and startups. If governments can focus on ‘ideation’and assist with packaging the next generation of business ideas that will fuel growth and job creation, then that is a starting point.
The second foundation mentioned concerns the actual entrepreneur or SME owner. Traditionally within the Arab world our image of an entrepreneur is mostly of a person who has a car, a house to live, enough food to eat three meals a day, healthcare and eat a fancy dinner once every three days. This is not what an entrepreneur is – this should be a person who sells their soul for their business, and who is willing to invest their own money, happiness and health into the idea and in this region many of the youth have grown spoilt and accustomed to a new lifestyle that is not a foundation for successful entrepreneurship.
The nucleus for any young person here is the family and this is where the change in mindset must first be introduced. Traditionally, success was measured in terms of obtaining a steady and reliable desk job in government – this is how my parents gauged success and it is still the case with many of the current younger generations. There needs to be a change of communication within the family, and from bottom to top within the education system, that lets the youth know that risk taking and venturing into the private sector with ideas is not only acceptable, but in certain cases, highly recommended.
The private sector should also be trying to adapt innovation in attracting the talented youth – why can’t private businesses here role out a programme whereby they will invest in the ideas of employees – they provide financing and expertise to help grow the idea, and take a share of the profits. This in itself is driving the growth of ideas, of entrepreneurship and of better business.
We, as business owners, as managers and as parents have to instill the idea that business cannot just be about money and exposure – there is an epidemic with attitudes here, that won’t be adjusted with changing just one thing. The oil and gas money won’t last forever, but the youth cannot be expected to change this mindset on their own – the family, the education system and society must all move in tandem.