Small and Medium Scale Enterprises Within Saudi Arabia

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Table of Contents

Headline
Person being interviewed
Transcript
Reflection

Headline

Entrepreneurs, regardless of their location, share similar problems when it comes to gaining access to sufficient capital to start their business. In this interview, what will be analyzed is the current situation of small to medium scale enterprises within Saudi Arabia and the inherent difficulties associated with the process of obtaining sufficient funds to start a profitable business venture. It is expected that through the various facts and arguments presented in this interview, the reason behind the lower rate of entrepreneurial activities within Saudi Arabia as compared to its neighbors will become clear and should act as the basis behind an assessment that would create effective suggestions as to how entrepreneurs within the country can best respond to the financial opportunities and challenges they are currently experiencing.

Person being interviewed

Mohammed Al Mansoor: is a businessman that operates primarily in Saudi Arabia yet has travelled to various areas around the world in order to examine their business processes and how he could apply it to his own business. He is currently in Canada to look at various Canadian based Saudi connected businesses in order to determine whether he can establish his own business.

Transcript

Me: Hi Mr. Al Mansoor, so I have to ask what can you tell me about the current situation of SMEs (Small – Medium enterprises) in Saudi Arabia at the present?

Mr. Al Mansoor: Well, small to medium scale enterprises (SMEs) make up the bulk of a country’s enterprises constituting 80 to 90 percent of local businesses. This can also be seen in the case of Saudi Arabia with SMEs hiring a majority of the country’s workforce at the present. H.M. King Abdullah bin Abdul Aziz Al-Saud himself has been quoted as stating that “entrepreneurs are the backbone of the Saudi Arabian economy and are instrumental towards its continued growth and prosperity”.

Me: Does this mean that the situation of small businesses within the

Mr. Al Mansoor: You really need to take into consideration the fact that SMEs constitute 92 percent of local businesses they are still overshadowed by the country’s oil and natural gas industry which accounts for 90 percent of export earnings, 45 percent of the GDP and 80 percent of the government’s budget revenues. This is in stark contrast to the situation found in countries that I have visited such as the U.S., U.K., China and other industrialized countries where local SMEs makeup more than 70 percent of GDP, 60 to 70 percent of local government revenue and 75 percent of export earnings.

Me: Where does the problem come from?

Mr. Al Mansoor: It is a funding issue really, in the case of Saudi Arabia, family plays a crucial role in the funding and development of small to medium scale business ventures wherein more than 75% of local businesses started by entrepreneurs were a result of family members contributing towards the initial starting capital of the entrepreneur and actively gave advice regarding the proper management of the business. It is the strong family ties within the country’s culture that limits the export market of Saudi Arabia due to the development of a business culture wherein it has become preferable to deal with family members or friends of the family when it comes to joint business ventures and business opportunities which in effect severely curtails the ability of a business to expand beyond its current market due to the inherent hesitance in dealing with the unfamiliar.

Reflection

During the interview process, I have to admit that I had the tendency to “butt in” so to speak where I at times interrupted the speaker in order to ask a particular question while they were still talking. In hindsight, I have to admit that this was probably not the best approach to getting them to talk about the topic since it may have seemed rude. What I discovered during the interview was that it was better to just let the person at the time talk and attempt to steer the interview towards the direction that I wished it to go.

There are certain “pauses” during the conversation that can be taken advantage of in order to help guide it towards the desired direction. I found out that without taking advantage of these pauses, the person I was interviewing would continue to speak and speak about a particular issue without any end in sight. The last lesson I learned from the interview is that it is better to read extensively about the topic before interviewing someone about it.

I discovered that there were plenty of moments where I simply could not understand what he was talking about due to the complexity of the issue. Some general understanding of a topic is needed to ensure that proper questions can be given. Overall, I have to say that my experience interviewing Mr. Al Mansoor was an enjoyable one since I learned quite a lot from the experience that I can utilize in my future endeavors.

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Small and Medium Scale Enterprises Within Saudi Arabia

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