Flip through the latest issue of Gulf Weekly.
Entrepreneurship is quite a unique profession in the Arabian Gulf. It requires great courage to risk one’s own money, future career prospects, and even one’s freedom, for a goal that is difficult to attain, writes new BusinessWeekly columnist Mohammed Fakhro.
At the same time, there are many cultural forces that discourage an entrepreneur from taking that leap and encourage him, or her, to take a more traditional route towards success.
Nevertheless, entrepreneurship is a profession that people who are strong-willed should be encouraged by the governments of the Arabian Gulf to try their hand at because it is an important engine for economic growth and job creation and one that the region should rely on increasingly as it continues the shift away from dependence on oil.
Entrepreneurship is a path that holds great promise, but one in which success can be enhanced if the governments of the Gulf can do more to promote the profession through more funding and more relaxed legislation.
Success in entrepreneurship requires many skills, but the most important skill is not related to how good you are with charts, or graphs, or business plans. It is not related to how you dress, or how you talk, or how you look, or who you know. Knowing how to read and write helps, of course, but there are many success stories of people who have made it without even these most basic of skills.
The smart talk skills help, but they’re more useful in the corporate world. The high IQ helps, but it is more useful in the academic world. The steady hand helps with shaking hands firmly perhaps, but it’s probably a more useful quality in the surgery world. The good looks help, but are probably more useful in the modelling world.
The thing that helps you in the entrepreneurship world, more than anything else, is what I call selfish determination; the determination to withstand the plain old blood, sweat and tears that come with your unique position, with the ultimate goal of winning at the expense of others.
It is highly unlikely that you will find a successful entrepreneur who does not possess this particular gem of a quality.
Entrepreneurship is persistence, hard work, and never accepting personal defeat. It is pushing, pushing, and pushing every day to get to your personal goal. It is taking big chances and making big decisions.
If it were a war, it would be a war of attrition to gain anything you can get from your competitor’s turf. If it were a race, it would be a marathon across man’s longest desert, a lifelong quest for glory, where success would bring untold riches, and failure would land you in prison.
Traditionally, Bahrain has always been different from the rest of the Gulf. It’s not a secret that in terms of work ethic, Bahrainis work longer hours and are more committed to their jobs than others in our area.
These skills were attained out of necessity rather than anything else. Bahrain was not blessed with the same natural resources of its peers and so the country has a population that had to work hard to make ends meet. These skills and this culture is something that could be utilised if it can be channelled towards engaging the population in trying out entrepreneurial activities.
We have a demographic problem in the Arabian Gulf with a large and growing youth population that needs to find work. Thanks to our vibrant existing industries, a large percentage of these people will find jobs in the existing companies.
Thanks to the requirements of the respective governments, many of the youth will also be absorbed by the public sectors of each country once they enter the workforce. However, there will still be a gap and there is a need for each country to cultivate its entrepreneurs to fill that gap and ensure that each country does not have high levels of unemployment in the future.
Unless this can happen the end result will be one in which more and more people will be chasing after the same jobs. This will tilt the scales in favour of the employer and will bring down salaries. The result will be an increase in income inequality, which is generally not a good outcome for a society.
One way to avoid this is to create a platform that encourages entrepreneurship, which is one of the great engines of growth and job creation in a capitalistic society.
Entrepreneurs face many challenges in Bahrain and the rest of the Arabian Gulf, as they do all over the world. However, they also face additional challenges that can be avoided if the governments of the Gulf can modify the system to cultivate entrepreneurs.
For example, when entrepreneurs start their businesses in the Gulf today, they will find that, in most cases, they have to have an office at a registered address, even if it is not needed. The governments of the Gulf can modify their legislation to remove the requirement for an office.
Then, when it comes to getting financing, the entrepreneur will find that no bank will give a loan to a start-up business.
While a lot of progress has happened with venture capital and angel investment, there still are not enough funds dedicated to these types of vehicles to push these start-up businesses forward, and so entrepreneurs will find difficultly getting funds from these sources as well.
What then happens is that the entrepreneur would need to dip into his or her own savings or borrow money from friends and family in order to get the business off the ground.
This is not a healthy situation because it makes entrepreneurship an impossible task for people from poor backgrounds, with no savings and no wealthy friends or family to borrow from. It, in fact, reduces the incentive for people from poor backgrounds to even try to succeed from a young age because the potential rewards are diminished by a system that makes it difficult to have upward mobility from one generation to the next.
The private sector has not done much to resolve this problem through market forces, and so it is perhaps the role of governments to step in and dedicate more money towards venture capital and angel investment.
Bahrain has done a great job with Tamkeen that everyone can learn from but much more needs to be done along these lines to push entrepreneurs forward.
Many of the top companies in the world today were started in Silicon Valley by people who had great ideas but did not have the money to turn their dreams into reality. The gap was filled by venture capitalists and angel investors.
Despite the successes made in the Gulf, we don’t have enough success stories of entrepreneurs who started with nothing but grew because of venture capital or angel funding. There are a few such cases but it would be good to see large amounts of money from the governments of the Gulf going towards this.
* Bounced cheques and a need to change the law ... next week’s BusinessWeekly
