SMEs and Startups in Saudi Arabia: A Mixed-Methods Empirical Investigation in the Context of Vision 2030

Abstract

The recent Saudi Vision 2030 plan has driven much of the development of small and medium-sized enterprises (SMEs) in the tertiary sector. While the Saudi BCG report records higher growth of young entrepreneurs, they still encounter significant structural, financial, and sociocultural constraints in their businesses that restrict them from performing optimally and growing. The study adopted a mixed-methods approach characterized by semi-structured interviews and a survey of young entrepreneurs from Saudi Arabia. Furthermore, policy documents/institutional records from the beginning of the Kingdom’s existence until the present were examined. Findings showed that the barriers faced by Saudi entrepreneurs are financing problems (90%), burden of regulatory requirements (82%), and socio-cultural norms (75%). Simultaneously, government initiatives have made a significant contribution through Saudi Venture Capital companies Monsha’at and Badir Technology Incubator to provide access to institutional support. Through thematic analysis, six broad issues that pose challenge to Saudi entrepreneurs were identified in this study. Quantitative data (interviews, survey, document analysis) showed that, on average, years in operation had a positive relationship with the annual turnover of enterprises, with a rapid increase in the number of enterprises registered between 2013 and 2023. The study concludes with recommendations for refinement of policies, strengthening the financial ecosystem, and making entrepreneurship education culturally sensitive to meet the Vision 2030 target for SMEs to contribute 35% to G.D.P. These findings can be used as guidelines for policymakers, support agencies, and researchers dealing with entrepreneurship in emerging economies in the Gulf.