Women and Entrepreneurship in Saudi Arabia:”Can Women Entrepreneurial Micro Businesses Grow in Saudi Arabia”

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Characteristics of an entrepreneur

There are certain attributes associated with entrepreneurs though with conflicting arguments. The first attribute of entrepreneurs is that they derive motivation from the need of achievement. Entrepreneurs desire to start something new that has been inexistent. The second characteristic of entrepreneurs is that they are tough, pragmatic, and unwilling to submit to authorities. The desire for independence and control of circumstances leads them to look for ventures in business that they can control and operate independently (Ebbena 2006).

Entrepreneurs are also individuals who are resourceful, imaginative, and knowledgeable. Their knowledge can make them cunning and innovative by devising new ways of doing business. They are important to the business mainly because of the capability to deal with issues and people. They have excellent leadership skills to win cooperation of others as they strive to achieve results (Howkins 2001).

They are optimistic in their decision-making and that is why they engage in risky ventures with optimism that they will manage the risk (Younis 2009).

The entrepreneur is also a risk-oriented person who does not fear losing and is inclined towards risking. The aspect of risk makes them active and interested in what they are doing. They risk and then strategise on how to ensure that the risk is under control (Howkins 2001).

The other major attribute of entrepreneurs is that they are opportunistic. They seem to have opportunities of profiting and forever looking for new frontiers that can lead to profit. They scrutinise and analyse business opportunities that are available to them and make an optimistic decision based on information and knowledge that they have on how to profit from the venture (Ebbena 2006).

Entrepreneurship in Saudi Arabia

Saudi Arabia leads the Arab world in entrepreneurship according to the GEP survey (The World Bank 2010). Saudi Arabia has been implementing reforms in business entrepreneurship policies to allow entrepreneurs start up business and grow since the year 2005 (Power, 2005). The Arab world is unknown or unidentified with risk taking ventures, conservative and reserved against risk taking (Dechant 2005).

The conservative aspect of the country and Islamic regulations pertaining to business has been for a long time a hindrance to entrepreneurship models of the Western world. Introduction of Islamic banking and financial institutions that relate with the local population have seen the number of enterprises grow in the country (Butt & Dalgic 2007).

For a long time the country has been dependent on oil as the main source of revenue and supporting livelihood and infrastructure in the country. However, with increased sensitisation and emergence of concerns on the climate change many countries are developing alternative sources of energy especially renewable energy projects.

This means that oil as the major source of revenue might not be sustainable for the country. The country must therefore look for alternative sources of revenue through entrepreneurship programmes that encourage innovation and development of the country into an industrial and technological powerhouse (Ba-lsa 2008).

Technology has simplified life and offered an opportunity of low risk investments where risk averse can try out especially for the young people who are not conservative. New businesses related to information technology are growing quickly in the country (Duening 2009).

Previously, the policies on entrepreneurship have been discouraging entrepreneurs from starting their own ventures. However, the government through the ministry of labour has instituted reforms for people to start their own business in the country (Alshemari 2000). The following are some of the reforms that the government of Saudi Arabia has embarked on to promote entrepreneurship in the country.

The first reform is that of dropping the number of days needed for the business registration after filing an application. It required 39 days for the business to be considered for registration but currently only fifteen days are required for full registration (Ebbena 2006). The other progress is that the government has allowed would be entrepreneurs to access loans from financial institutions as little as $1000.

Previously the government allowed loans of more than $100000, which implied that an entrepreneur who does not have assets of similar value could not access loans for starting a new venture. The government is also allowing entrepreneurs’ education by sponsoring seminars and discussions on entrepreneurship in the country (Ba-lsa 2008).

Women and entrepreneurship

Women in Saudi Arabia have taken leading roles in the development of entrepreneurship in the country. Earlier on, due to the traditions of Saudi, the place of women has been mainly at home doing domestic chores but it has never been in business. Men have dominated most of the business ventures in Saudi Arabia compared to other Arab countries (Almaeena 2007). The first reason is that the country has been educating girl child.

On finding that there are few jobs for women and restrictions on entrepreneurship, many educated women opted to work out of the country due to strict regulations that barred them from participating in public activities. The government acknowledged the challenge and instituted measures of allowing women to do business. The regulations have seen more women entrepreneurs in the country (Hassan 2006).

The other challenge for women entrepreneurs in the country is that of property ownership, as women are restricted from owning property in the country. This hindered many of the women from operating business ventures in the country, as they had to operate them under their fathers or husband’s name (Swedberg 2009).

The Saudi culture is a major hindrance to women entrepreneurship, as many men cannot work for a woman as their boss especially unmarried woman. The chauvinist attitude hinders many women from venturing out. However, there has been a rising trend of businesses operated by women and have proved successful.

The changes in culture have also seen a rise in the number of women entrepreneurs mainly because the young men can accept to work with women as their boss compared to the older generation. The accessibility of finances and reforms instituted by the country’s chamber of commerce has allowed women to take leading roles in entrepreneurship in the country.

Women entrepreneurs in Saudi Arabia are daring as they usually go against the norm and some people view them as rebels who have refused to settle in their homes. They have to fight restrictions and discrimination that exists against them in the country because of their gender.

History of women entrepreneurship in Saudi Arabia

Although women entrepreneurship in Saudi is seen as a new field due to the increased interests, women in the Kingdom of Saudi Arabia have been enterprising. However, they did not run formal business institutions although their involvement in start up businesses and small businesses started long time ago (Fakkar 2007).

Though women have played domestic roles more visibly, they have also participated in entrepreneurship. Traces of women in enterprise can be found from their involvement in tailoring clothing where women made cloths for their families as part of the domestic chores. When the need for variety increased, it was common for women to exchange their models and designs with others who had different models and designs.

As time went on the government allowed women to operate the tailor shops away from home where they would open a shop to sell cloths. The shops gained prominence and generated profit for the early entrepreneurs during the Ramadan season when many visitors would come to the country on their way to visit the holy city (Power 2005).

This gave them enough capital to expand the businesses. However, challenges such as regulations in ownership of properties, which restricted ownership to men, and the restrictions on women investments in different ventures, made it hard for the women entrepreneurs to go beyond the tailoring shops. The other entrepreneurs who thrived were those who specialised in jewellery and antiques that they sold to tourists (Abdullah 2007).

Women who tried other ventures that required employees and different kinds of skills found it hard to thrive especially because many men did not want to have a woman as the boss (Power 2005). The need to balance family life and work demands also restricted women to stay at home and engage in home chores. In the year 1970, girl child education was not emphasised or seen as important and many parents saw it as a luxury.

Many women therefore did not have academic qualifications to make them engage in formal employment. The situation has however changed as the society perception on women has gradually changed. There has been discourse on how to increase accessibility of girl child education in the country (Almaeena 2007).

The other factor that has necessitated increased women entrepreneurship in the country is the need for alternative sources of income for the country other than oil. This means that the government must encourage all people to participate in entrepreneurship (Lundström 2005).

Key women figures and their achievement

There are some key women figures who have depicted that woman in Saudi Arabia can advance and go beyond the limits that society has set for them. Among them is Nahed Taher, the CEO and co founder of Gulf One Investment Bank. She ranks among the 20 most influential people in Islamic Finance Magazine.

She is a pioneer woman in the banking sector and has done a lot to help women access start up capital for their businesses in the country. She is a role model to many aspiring women entrepreneurs in the Kingdom of Saudi Arabia (Abdullah 2007).

Lubna Olayan is another successful entrepreneur, the first Woman to address an economic forum in Saudi Arabia. She is the chief executive officer of Olayan Financing Group (Parker 2007).

The other influential figure is the Lama Asuleiman the deputy chairperson of Jeddah Chamber of Commerce and Industry. She was the first woman elected in such a post in the year 2009. She is also a board member of Rolaco Trading and Contracting Company, board member of National Institute of Health Services. She has been instrumental in advocating for women participation in the business (Younis 2009).

The other influential woman figure is Nashwa Taher who is the vice president of the Khadija Bint Khuwalid Business Centre for women. She is also among the first woman to be elected in the Jeddah Chamber of Commerce and Industry. She is a strong advocate of reforms in the business regulations to allow more women to participate in business (Almaeena 2007).

The other key figure in the kingdom of Saudi Arabia is Madawi al Hassoun, she is the founder of Khadija Centre in Jeddah, and she unsuccessfully ran for a position in the Jeddah Chamber of Commerce. She is a successful entrepreneur who operates a women’s mall in Jeddah among other antique enterprises. She continues to advocate for participation of women in business (Almaeena 2007).

There are significant businesses owned by women in Saudi Arabia. The most successful one is the Gulf One Bank owned by Nahed Taher, and it has been providing start up capital for women entrepreneurs. The other is the Olayan Financing Group that is the first women led corporate business in the country (Parker 2007). The Khadija centre in Jeddah is a huge shopping mall run by women and it hosts numerous small and medium enterprises run by women.

Women and micro businesses

The micro business is a business venture that has two to fifteen employees. They are some of the businesses that women in Saudi Arabia have actively participated. These micro businesses come in the form of shops such as curie shops, tailor shops, antique shops mostly dominated by women who operate them (Parker 2007).

These businesses are convenient for women as they enable them to strike a balance between domestic roles and enterprise demands. The micro businesses are appropriate as they do not require a lot of money as start up capital and many of the women can access informal funding from brothers and sisters compared to accessing the formal funds from banks.

This has allowed many women to participate in the micro enterprises. They present a good entrepreneurship opportunity for the women entrepreneurs to gain business experience and expertise needed in business. Currently, more than five thousand small registered micro enterprises operate in the country (Livingston 2007).

Motivating women through incentives

There are incentives that can be given to women to make their start up enterprises successful and economically beneficial. The first incentive relates to formal funding of the enterprises. Many women start their enterprises from the personal savings, family friends’ assistance or a loan from micro financial institutions. There is need to establish why women opt for this informal sources of capital rather than the formal capital sources.

This makes the women enterprises vulnerable to failure, as there is no much feasibility study done to establish the viability of the business as is the case of formal funding. It also implies that only women from wealthy families can engage in enterprising activities, as they access large amount of capital informally (Swedberg 2009).

The other incentive needed to promote women in businesses is skills training to the women entrepreneurs. Training the budding entrepreneurs on the business aspects of the enterprise such as accounting, human resource management and financial management practices will ensure that the women entrepreneurs make informed choices pertaining to their businesses (Riddle 2007).

Providing networking opportunities for the women entrepreneurs will be a major incentive that will assist the aspiring entrepreneurs, existing entrepreneurs, and investors to interact and share ideas on how to make their businesses grow. Networks provide an opportunity of the business people to exchange contacts, share ideas and reach the potential customers.

It is imperative to create such forums for women in Saudi Arabia where they can interact, share the challenges they are facing and come up with new measures of dealing with those challenges. There exists the Khuwalid Business centre for women, which is a forum for executives to come together and share their challenges and opportunities that they face as entrepreneurs in Saudi Arabia (Hassan 2006).

Assisting the women entrepreneurs to establish appropriate mechanisms on how to develop advanced marketing systems for their businesses will be an incentive that will assist the entrepreneurs market their goods and services not only in the country but also outside. This is possible through establishment of training seminars and workshops on marketing for start up enterprises (Porter 2008).

Allowing women to drive will be another major incentive that will help them operate the businesses with reduced costs. Currently they have to employ a chauffeur or wait for their husbands or brothers to drive them to the place of work. This limits the movement of women from one place to another. The restriction does not allow women to operate the enterprises in a cost effective way (Porter 2008).

Changing attitudes towards women is another incentive needed to make their entrepreneurship a reality. The situation where men refuse to have women as their boss has intimidated many women from venturing into businesses that will require them to have male employees. The change of attitude through education and awareness that women can be good leaders is an imperative incentive that will see more women starting business ventures in the country (Pickton 2000).

Saudi government involvement

The Saudi government has been involved in the promotion of women entrepreneurs in the kingdom through a number of ways. The first one is that their government has reduced restrictions on the amount of funding issued as start up capital. Previously only five million Saudi Riyals would be given out as the minimum amount. This means that one has to have guarantee assets of similar value. However, currently the minimum amount is five hundred thousand riyals (Swedberg 2009).

The other incentive that the government is providing is adjusting the legal framework to allow women join governing bodies and councils that make crucial decisions pertaining to businesses such as the Jeddah Chamber of Commerce and Industries. This will allow their ideas to be considered when making major policy decisions.

The government has also allowed formation of women business lobby to safeguard and protect the gains made on creating room for women entrepreneurs in the country. This is an important step as it makes the voice of woman heard on issues pertaining to business and provides a check and balance mechanism against discrimination based on gender (The World Bank 2010).

There are incentives that the government must institute in order to increase woman participation in business and entrepreneurship. The first mechanism is that of relaxing rules and restriction against women drivers. This will allow women to operate businesses away from their homes in a cost effective way and enable them to save money for future development (Ortmans 2010).

The other incentive is that the government can set aside a special fund for women entrepreneurs where current and potential entrepreneurs with viable business ideas but have no capital can access capital and assistance in carrying out feasibility studies to establish the application of their ideas (Bailetti 2012).

The government of Saudi Arabia can also assist would be entrepreneurs by giving them training in entrepreneurship. The training opportunities can assist women to get business skills that are necessary in making the business enterprise successful. The government can sponsor seminars and workshops where women entrepreneurs receive training in business aspects such as management, marketing, accounting, which will be helpful to them in business (Atkinson 2007).

Determining business opportunities and challenges

Implications from Jeddah and Eastern Chambers of Commerce on the different opportunities

The Jeddah and Eastern Chambers of Commerce and industries present opportunities for women entrepreneurs especially because they have a chance to be members of the chamber of commerce. The first opportunity that they get from being members of the Chamber is expressing their views and opinions in relationship to the government policies and regulations on businesses.

The chamber of commerce is a forum that represents business community. The inclusion of women entrepreneurs gives the chamber a perspective of women point of view on policies and restrictions of the government and the society (The World Bank 2010).

The other opportunity presented by the inclusion of women in the chamber of commerce is networking opportunities. The networking opportunities are opportunities in form of business connection from interactions in the chamber of commerce. The networks may be for potential investors or venture capitalists looking for small enterprises to invest in (Schultz 2000).

The other opportunity presented by the chamber of commerce is publicity for women entrepreneurs in the chamber of commerce by giving the women entrepreneurs visibility to the public.

This is important as an opportunity to market their enterprises as well as show the society that women can be successful entrepreneurs (Strokes 2010). Publicity is expensive and it is not easy for women entrepreneurs. However, by engaging in advocacy activities as well as the corporate social responsibilities, women entrepreneurs can get publicity that is necessary in marketing their businesses (Ind 2007).

Saudi Arabian women participation on the Jeddah and Eastern Chamber of commerce presents an opportunity for women to advocate for policies that are friendly to them. They can lobby the government to set aside funds for women entrepreneurs where they can get formal start up capital for their businesses (The World Bank 2009).

The other opportunity presented by the chamber of commerce is that it gives the women an opportunity to prove that they can lead successfully. This will be imperative in fighting off prejudices and instances of discrimination for leadership opportunities. The women in the chamber of commerce can lobby for removal of restrictions such as driving restrictions as it affected their businesses negatively.

They can use the opportunity to create awareness in the society on the need to accept women as leaders as well as entrepreneurs and address the concerns of balancing the role of leading and managing household chores. The Chamber of commerce presents an opportunity to women to show that they can be good leaders (Morgan 2006).

Opportunities of Entrepreneurship in Saudi Arabia

The country depends on the imports and agricultural entrepreneurship can supply the needed products in the country (Alstete 2003).

There are entrepreneurship avenues in the education sector especially in educating the local population on technology and computer skills. This will be a good start up enterprise as it will not require high level of start up capital yet it is highly profitable due to the increased awareness on the need for internet and computer connections. The advantages offered by the social media marketing may go a long way in assisting companies to develop appropriate ways of marketing their own computer technologies (Ind 2007).

The information technology field also presents opportunities in the implementation of Enterprise resource planning software in organisations. Learned women entrepreneurs in the country can exploit this opportunity to provide and implement this software on behalf of companies. This has a huge potential and it is likely to have high returns (Atkinson 2007).

The field of antique shops provides avenues of entrepreneurship, where with appropriate marketing mechanism one can reach potential visitors in the county during the holy month and sell to them memorabilia items that are profitable at such a time (Hassan 2006).

Research methods

The objective of this research is to identify the challenges that women entrepreneurs in Saudi Arabia encounter in their attempt to start their own businesses (Creswell 2003). The other objective is to look for ways of addressing the challenges and opportunities that exist for Saudi Arabian women entrepreneurs.

This is imperative in developing the necessary and the appropriate ways of dealing with those challenges (Patton 2002). The research will be carried out using qualitative methods of data collection, as much of the data will be qualitative. This research will focus on women entrepreneurs who are in Jeddah chamber of commerce.

The sampling of the research will be a stratified sample as the women members of chamber of commerce are few and the research will target them. The research will use questionnaires to obtain data from the respondents. The respondents will be women entrepreneurs who are members of Jeddah chamber of commerce (Creswell 2003).

Research choices

The research may have use qualitative methods of research to identify the number of entrepreneurs as well as check the variability of the various factors, which women entrepreneurs regard as the main challenges. The current research method cannot determine the weight that each challenge has on entrepreneurs.

For example, whether the attitudes that the local society has against women entrepreneurs are the greatest hindrance or whether lack of funding is the greatest obstacle to the women entrepreneurs in Saudi Arabia (Alana 2011). The current questionnaires do not factor in the role of government policies as factors that affect the women entrepreneurs and their influence in entrepreneurship.

The research does not have standard of measuring the characteristics of women entrepreneurs in the country and the dominant attributes of those entrepreneurs (Patton 2002). It is necessary for the research questionnaires to utilise the Likert scales in measuring the variability of research attributes from the most to the least dominant (Creswell 2003). The interview as the method of data collection will be appropriate for this research because it will involve engagement with the respondents.

It will allow the respondent to give first hand information or rapid thought rather than questionnaire where one can write and rewrite answers (Patton 2002). It is efficient in terms of cost as it will save on mailing to the respondents and in many cases, the respondent get the mails late such that they may not have time to respond to the questions (Alana 2011).

The fact that the number of women respondents is limited as they are about ten women who are members of the Jeddah chamber of commerce means that it is easier to meet them for interview rather than through responding to questionnaire (Creswell 2003). For the research to have information from women who are in different income levels, it will adopt a random sampling after selecting a list of fifty women entrepreneurs in Jeddah.

The researcher will select the sample randomly to avoid selecting the names of the entrepreneurs based on prominence (Alana 2011). The interviews also provide an opportunity to discuss issues and get immediate feedback from the respondent unlike in a questionnaire where the answer is rational and difficult to express emotions in written answers (Creswell 2003).

Interview best practices

Interview questions

The start

What made you start a new business venture?

How did you generate that idea?

For how long do you work on an idea before you conclude that it cannot work?

How do you bring people into your organization that have the same vision as you do?

How do you come up with new concepts and ideas?

During development

Where did you get your initial funding?

What did you do to get it?

How important is employee participation to your success?

How do you get loyal customers for your business?

What made you choose the current location for your business?

What skills do you consider as the three most important skills that are needed to be successful as an entrepreneur?

Experience conclusion

What failure have you encountered as an entrepreneur?

What did you learn from those experiences?

Have you had men employees who have refused to work because you are a woman?

What advice could you give to other women who are aspiring to be entrepreneurs?

Would you do differently if you were to start your career again?

General

What is the average number of hours that you work every day?

How is your typical day like?

Does being an entrepreneur have effects on your family life?

What is it that motivates you?

What sacrifices have you made along the way to succeed?

How do you feel when engaging in a risky venture?

Where would you want to be in the next ten years?

Interview ethics

The research interview will respect the respondents’ privacy, as it will not ask for personal information from the respondent other than age and income level of the entrepreneurs. In matters of gender, all the respondents will be female. The interviewer will guarantee privacy and the identity of the interviewee will not be revealed. The respondents are free to choose the questions that they will answer (Patton 2002).

The interview will be voluntary and no one is supposed to be paid for the interview. This is because paid interviewees express inauthentic opinions that may not be of help. Paid interviews violate the principle of informed consent in interviews where the person does the interview without consent.

To avoid this, interviewee will have to sign as consent form as evidence that the information provided is authentic and consented by the interviewee. This research will depend on the good will of the respondents to answer the interview questions (Patton 2002).

The other practice is that the interviewer shall not intrude or guide the interviewee in order for him or her to answer as per the interviewer’s wishes. The interviewees are entitled to their own independent opinions, which are necessary for the purposes of this research (Creswell 2003).

The other best practice is informing the interviewee in time so that they can prepare. The other aspect is that it is necessary to alert the interviewee that the interview will be recorded for translation and data analysis (Alana 2011).

The interviewer will guarantee the interviewee privacy by ensuring that the interviewee’s name is out of the records and the names of their businesses to remain undisclosed. The interview will not focus into personal issues of the interviewee to help them conceal their identity.

Interview analysis

To conduct a good interview analysis it is necessary to have the best tools such as a tape recorder of collecting information. After the interview, transcribing notes on the impression received during the interview such as visible emotions and impressions are necessary as part of qualitative data analysis. It is important to transfer the interview into writing if recorded in audio form for easy coding (Alana 2011).

Coding involves identifying key words that are relevant to the research objectives and the research questions. Noting down recurrence of key words across the interview is important in developing codes for the interview. The first level of coding involves identifying themes and units of meanings as expressed by the interviewee. The second level of coding involves looking for coherence or recurrence of words from different interviewees. This is important in identifying codes that are crucial in analysing qualitative data (Patton 2002).

The interview sample

The interview sample will have ten entrepreneurs who must be women as well as members of Jeddah Chamber of Commerce. This will be important in order to obtain information on challenges presented by the chambers of commerce and future opportunities. This is because of having women participating in the chamber of commerce as well as policy formulation issues (Patton 2002).

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