The Opportunity to Succeed as Women Entrepreneurs in Saudi Arabia Compared With UK

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Table of Contents

Introduction
The Public verses private sector
The Small Businesses and available opportunities
Nature of entrepreneurs for women in Saudi Arabia
The role of gender
Role of small businesses
Successful business women in UK
Conclusion
References

Introduction

Both males and females in the society have unique gender roles which they play in the society. Although they have equal opportunities in life, the latter has historically struggled to assume a better position in a male dominated world. In spite of this, the case of the developed world is quite unique since women seem to be at the centre stage of development controlling more than 30 percent of businesses.

These developed economies are being transformed by females (Al-Ghazali & Sadi, 2010 pp.4-5). In Saudi Arabia alone, about 45 percent of the entire population is made up of females. This figure is a bit lower compared to that of the United States.

About 51 percent of the population in US is women. However, the Saudi Arabian disparity has been caused by the influx of several foreign male workers in Saudi Arabia leading to a lower female population. There are about 5.6 million expatriates in Saudi Arabia majority being men (UMUC Working paper, 2009, par. 7).

The Kingdom of Saudi Arabia hosts about 23,000 businesswomen with a total of 62 billion dollars stacked in their accounts besides other resources.

By 2008, it was reported that a total of ten business executives who were women from Middle East made their record as among the best 100 bankers worldwide, indicating how women have not only excelled in conducting business, but are also great entrepreneurs and skilful in the business world (AlMunajjed, 1997 pp.141-143).

There are quite a number of business solution that have been adopted in the last five years to enable women have a conducive business environment that promises success. One of the compelling factors that will make Saudi women excel in business is education. Over 58 percent of university graduates are females.

In addition, the Saudi economy is still young and has a higher prospect of growth. Moreover, the Kingdom is well endowed with resources that are needed in any successful business environment. This has made the Saudi society to grow rapidly both in terms of capital accumulation and surplus investments.

Indeed, the aforementioned factors are great propellers for Saudi women who are planning to engage in entrepreneurial activities, including those who are in various businesses (Powell, 1993 p. 34). This paper seeks to extensively explore the various opportunities that women have for successful business operation in Saudi Arabia compared to United Kingdom.

The Public verses private sector

Both the public and private sectors play an integral role in building the economy of any country and Saudi Arabia is not an exception. While the public sector is run and managed by the government, the main players in the private sector are individuals who set up their own businesses and run them as private entities (AlMunajjed, 2009 p. 6).

Each of these sectors has unique merits and demerits. For instance, there are individuals who would prefer to be employed in the public sector largely due to job security and stable salary.

By the side, the private sector may also promise better salaries among other fringe benefits that come along with the job descriptions. The working environment may be enjoyable alongside flexibility at work which enhances creativity as well as skill development.

The Small Businesses and available opportunities

In spite of the existence small businesses in the Kingdom of Saudi Arabia, their variance has been remarkable over the past ten years both in terms of quality and number. This has also been the trend across the world (Zoepf, 2010 par.3). The private sector is steadily supplementing the public sector through spontaneous growth.

It is out of the small businesses that developed economies such as that of US have seen the light of day in economic progress. Moreover, small businesses have remarkably shaped the way business is done and as a result, the Saudi economy is experiencing growth mainly due to the existence and expansion of small businesses.

It has also been reported that small businesses are responsible for over 75 percent of new jobs being created (Heathfield, 2010). Similarly, the UK economy has been positively impacted by the growth impetus of small businesses. It is estimated that small firms are contributing significantly to employment creation.

Despite the enormous contribution of small businesses to the economy of Saudi Arabia, there are still several hiccups that demand to be resolved. It is imperative to note that the impacts of globalization is gradually injecting numerous changes in the small business world since the markets are now being integrated and also opened up to the world economy (Carter, Mason &Tagg, 2004 p.76).

Products and services can now be sold not only within the borders of the Saudi economy but also in other destinations. Hence, the element of competition is in board and cannot be ignored at all. Both the legislators as well as policy makers are gaining more interest in the development of small businesses largely due to the impact of this sector to the economy.

It is also believe that small businesses in Saudi Arabia (SMEs) is the main channel through which the private sector can boast of investment. Throughout the kingdom, the small businesses, most of which are run by women, constitute over 90% of the private sector investment (Zoepf, 2010 par.5). As already mentioned, these small businesses have been deemed to be the major creators of employment in Saudi Arabia.

Consequently, poverty alleviation is being celebrated due to small business not to mention the ability of these businesses to foster growth and innovation in business culture and technology. In addition, it is through the small businesses that new products and services are being developed to meet the growing needs of the population in the entire Kingdom.

Further estimates indicate that over 50 percent growth in the entire economy is expected to be realized in Saudi Arabia in the near future and this will mainly be contributed by small and medium sized enterprises.

It is against this backdrop that women in Saudi Arabia stand a higher chance of developing and growing their business skills both now and in the future (Marlow & Carter, 2005, pp.47-53). Better still, they have a better chance to succeed as entrepreneurs in Saudi Arabia as can be seen by the numerous opportunities for growth.

However, the worry that dons the small and medium sized enterprises under small businesses is that growth and prosperity is still being hindered by the very fact that the basic tools required are not readily in place. The small businesses operated by women in Saudi Arabia can only prosper if the right tools and business mechanics are put in place.

For instance, these small and medium sized enterprise lack adequate funds and various means through which they can access credit facilities. Contrary to the UK, the credit facilities are adequate and small business can fairly borrow to expand on their businesses. Worse still, small businesses in Saudi Arabia also face stiff government regulations that require them to comply with numerous policies.

The red tape for foreigners is even tighter. Moreover, the ignorance on the relative importance and contribution of small business has led to lack of statistics on their market progress and hence, they mainly operate without the much needed figures for carrying out business decisions. This is a similar case with many developing economies.

Therefore, the success of women in small and medium sized business enterprises will aptly require government intervention. The support from government will equally demand the private sector to participate and cooperate fully. Large and well established enterprises in the UK are indeed making a mark in developing and supporting the small businesses over and above the government support which is already in place.

Furthermore, there is a closer private-public sector partnership in UK that has enabled a profitable working environment among small businesses. This is a similar case with Saudi Arabia although the ties between the two sectors are not very strong.

In UK, there is a practical working framework that entails policy formulation on the progress and needs of small and medium sized enterprises. There is a systematic approach through which the government of the day is working closely with small businesses to ensure that they grow.

In comparison to Saudi Arabia, it is a lot easier to seek funding from the public sector to initiate small business in UK. Business women in Saudi Arabia would reach greater heights if and only if there were clear policy formulations in the Kingdom that seeks to support them in their business endeavors

Nature of entrepreneurs for women in Saudi Arabia

The Saudi Arabian woman has been affected by quite a number of barriers in her attempt to excel in doing business in the kingdom. For instance, the cultural setback that requires women to be submissive and seek permission from their male partners before engaging themselves in any decisions is a major setback. In takes a long before they can embark on serious business while in some cases, the permission is not granted.

This has adversely affected the business merit of these women bearing in mind that they have to compete equally with their male business rivals in the market (UMUC Working Paper Series, 2009, par.10). Another cultural hindrance emanates from the fact that women are not permitted to drive in Saudi Arabia.

It is common knowledge that any business person needs to travel frequently and when this is not possible, then most business deals may go sour. Contrary to the UK case, women have the liberty to drive freely and conduct their own businesses. While consulting their male partners is necessary before making some decisions, it is not a mandatory.

Additionally, there are limited government programs that have been tailor made to reach out for women in small businesses. In UK, such programs are in place and women are in a position to expand their businesses with much ease (Omar, 2008, pp 34-37).

However, the major disadvantage in UK is that small and medium sized enterprises are not very common and are not necessarily given the best concern in the business world. The economy has grown by double digits and only those with adequate capital may enjoy starting and running businesses in UK (Al-Ghazali & Sadi, 2010 pp.6-9). In other words, it is cheaper to start and maintain a mini business in Saudi Arabia than in UK.

The role of gender

The challenge posed by gender when staring and running small businesses is not limited in Saudi Arabia only. Despite the fact that there is no evidence that segregate enterprise ownership along gender line, current statistics reveal that only 15 percent of all business units are owned by women in UK while the remaining half is owned by males (Marlow & Patton, 2005 p.48).

Furthermore, there is minimal statistical evidence on the growing number of women engaging in self employment through small and medium sized enterprises.

For the past two decades or so, the increase in small business among women in UK has been small. Self employment among women has more been stagnant than growing and this has posed more concern on whether small and medium sized enterprises are well placed as alternative sources of employment especially among women (Madhi & Barrientos, 2003 p.112).

Comparatively, Saudi Arabian case has been one of the growing patterns in small and medium sized enterprises. As already noted the economy is still young, resources are abundant and in spite of lack of structured government support and funding, Saudi economy still provides the best opportunity for growing small businesses. It should also be noted that the very small businesses heavily depend on the immediate population.

The Saudi population is indeed an asset and impetus to the growth of its small business portfolio. Further research conducted in UK reveals that the likelihood of women becoming self employed is lower than men beside the bare fact that their business skills differ significantly from men (Business.com, 2010 par. 1). There seems to be a completely business platform and ideals in UK compared to the Kingdom of Saudi Arabia (Khan, 2010).

For women who engage in small businesses as part of self employment, they mostly take part in traditional occupational sectors that have been known for ages like finance and education.

By the side, there are those who work on part-time basis. From this perspective, it is definite that gender has influenced women participation in small business both in UK and the Kingdom of Saudi Arabia and so it may not necessarily be a determining factor when carrying out comparative advantage between doing business either in UK or Saudi Arabia (Johnson, Sear & Jenkins, 2000 pp.55-59).

Being a social construction, gender is largely pinned to ether masculine or feminine characteristics. Right from the perspective of gender, stereotypes emerge such as the one that ascribes to the inability of a woman to manage personal business well without getting assistance from a male person.

For this reason, there are myriad of professional organizations that have been set up to act as custodian for women enterprises especially in Saudi Arabia. These organizations are managed professionally to assist in uplifting the level and expertise of women involvement in small and business enterprises without being sidelined by gender and other cultural stereotypes.

Role of small businesses

The role played by small and medium sized enterprises in the Saudi economy has been given much importance than in UK. The Saudi government believes that its economy would only grow if the small business are recognized and supported (Coleman, 2000 pp.38-40). For women, this must be a real impetus for growing their businesses in Saudi Arabia than in UK.

To begin with, small, and medium sized enterprises have significantly lowered the rate of high unemployed which was once being experienced in the economy. It is worth to note that large scale enterprises do not have the capacity to employ the growing population.

It is only through the creation of small businesses that unemployment can be brought down by double digits. Moreover, the small and medium sized enterprises are also easy to start and administer in comparison to large scale business establishments. Small capital is required and the legal requirements are also minimal.

For small and medium sized enterprises under the umbrella of small businesses, they have limited liability and therefore they can remain vibrant in the market in spite of the dynamics. Nonetheless, securing sufficient funding for these small businesses is still a hurdle especially in Saudi Arabia.

Moreover, they have weak capacities that delay expansion of their working capacities. Women in Saudi Arabia are more likely to succeed in small businesses there bearing in mind that up to 92% of businesses there are made up of small and medium sized enterprises, a practice not common in UK (Federation of Small Businesses, 2002 par. 3).

Although the small businesses are major drivers of the Saudi economy, their overall contribution to the GDP stands at only 33%. It is against this backdrop that the government has initiated the kafallah program to assist in the process of financing small and medium sized enterprises in the Kingdom. For women aspiring to start small businesses in Saudi Arabia, they have a higher chance of succeeding with a shorter time than their peers in UK.

Successful business women in UK

In spite of the gender and other cultural factors working against the success of women in small and medium-sized enterprises, there are those female personalities who have made a mark in the business world in UK and around the world.

One such successful woman in UK is Deborah Meaden. Although she is perceived to be highly entrepreneurial, Meaden is most likely to have crafted her business skills and ideas from the male dominated society without the fear of being outwitted.

She had a business mind from the early stages of her life and would settle for nothing less than her own run enterprise. She started off with the importation of glass and ceramics barely at 19 years (Burke & Davidson, 2000 pp.38-42). She has grown her business empire by leaps and bounds. In one of his latest establishments, Meaden started a marketing research company having gained vast knowledge in marketing from her previous business outfits.

Conclusion

In recap, it is vital to note that the Saudi Arabian economy is well placed both in terms of resources and human capital required to start small and medium-sized enterprises. The striking difference between the two economies namely UK and Saudi Arabia is that the latter is still in its growing phase while the former seems to be static especially in the growth and expansion of SMEs.

It is against this background that women who engage in small businesses in the Kingdom of Saudi Arabia have a higher probability of excelling than those in UK.

Additionally, small and medium-sized business enterprises remain to be major contributors to both Gross Domestic Product (GDP) and overall economic growth in developing and advanced countries. It is only through the public-private sector support that small businesses will ever grow to meaningful levels.

References

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