Understanding the lack of uptake of entrepreneurial opportunities: the case of Saudi Arabia
Creators: name: Alsabhan, Ali
Publisher: name: RMIT University
Year: 2024
Subjects: classificationCode: 470212
subject: Multicultural, intercultural and cross-cultural studies

description: Background: Long dependent on its oil resources, the Saudi government has come to realise that economic diversification is an essential aim if the country is to continue to develop and prosper. The private sector is seen as a major source of this change and the issue of entrepreneurship has risen up both the policy and research agendas. With entrepreneurship closely associated with Western values and practices, in particular those of the United States, the desire to energise the private sector in the Kingdom of Saudi Arabia has led to questions concerning its culture, its business ideology and, on a practical level, its entrepreneurial ecosystem. These questions ask how culturally, ideologically and practically prepared the kingdom is to support private business endeavour among its population. It has long been part of Saudi business ideology that big is best. Large-scale corporations are seen as a source of strength and security in the developing kingdom. However, this has come at the expense of recognition of the importance of small-scale entrepreneurs who have lacked the social acceptance widely seen elsewhere. Small-scale entrepreneurship is known to be a vital source of economic growth and employment opportunities and so encouraging this group should be a vital policy goal and understanding them an important research goal. Hence, this research pursues answers to a set of research questions aimed at shedding light on the mindset of Saudi's aspiring entrepreneurs, on how they are experiencing the Saudi entrepreneurial ecosystem, the role of culture in the entrepreneurial process, and, on a practical level, what can be done to improve the current ecosystem and encourage more entrepreneurial intention to become action.<br><br>Methods: To add to understanding of such issues, this research examines the experiences and perceptions of aspiring entrepreneurs attending a mentorship program in the capital, Riyadh. The participants were observed and interviewed when applying to, attending and reflecting on the program, providing an original and rich picture of the experiences of this important cohort. The research includes a literature-based review using Isenberg's Model of the Entrepreneurial Ecosystem to evaluate the country's readiness for entrepreneur-led diversification. A review of theories aimed at understanding the entrepreneurial mindset led to the setting of a conceptual framework that was subsequently used as a theoretical lens to interpret the findings of the study. The dataset comprised unstructured observations noted by the researcher over a period of 12 months combined with transcripts of 12 semi-structured interviews with aspiring entrepreneurs, eight mentees and four others who had unsuccessfully applied to join the program, generating vast quantities of notes and interview transcripts extended to 280 pages which required a great deal of organising. The analysis followed Eisenhardt's (1989) eight steps approach to comparative case studies and includes within-case, cross-case, and deviant case analysis.<br><br>Main Findings: A set of themes and subthemes emerged from the analysis through an inductive process; these identified and organised the findings. The study found that idea formulation and the initial development of intention occurred for different reasons among the participants. Some experienced a moment of discovery; others had had enough of their current circumstances; and for others it was the result of a gradual build up. Further, the study found that despite the policy support for entrepreneurship, at a societal level there was yet to be acceptance of small-scale entrepreneurship as an alternative to conventional employment. As a result, participants were found to be facing considerable social pressures from their social networks guiding the aspiring entrepreneurs back towards a more socially acceptable path. Alongside these external pressures, the internal pull towards the security of salaried employment, particularly in the public sector, was found to be present in the minds of many participants. In other words, it was the informal cultural aspects of the entrepreneurial ecosystem that were preventing, in some cases, intention turning to action.<br><br>On the role of culture in shaping the entrepreneurial mindset, the research found that it was, in fact, economic ideology in the form of long-standing public sector corporatism that was behind the shunning of entrepreneurship by large parts of the population. However, it was also found that the aspiring entrepreneurs in the study displayed cultural values, such as individualism, that one would expect to find in countries more closely associated with entrepreneurship such as the United States. This contrast potentially suggests a generational difference in attitudes with older generations taking longer to respond to the new pro-entrepreneur messaging of the country's leadership. Furthermore, one of the most common responses to the social pressures was social isolation from extended family and friends with a strong perception that entrepreneurs would inevitably follow a lonely path. This is in stark contrast to the traditionally prominent role played by such networks in this collectivist society. The importance of knowledge localisation also emerged as a finding as participants responded to the Westernised content of their mentorship programme. The study found that only one of the participants actually started their business during the 12-month fieldwork period. The most prominent factors in this appeared to be social pressures and the relative security and conventionality of employment. Hence, the overall finding was that the three factors of entrepreneurial mindset, culture and entrepreneurial ecosystem are important mediators, or influencers, in the relationship between entrepreneurial intention and entrepreneurial action.<br><br>Implications: The theoretical implications of this study are that relationship between entrepreneurial action is influenced through three main factors: the entrepreneurial mindset, culture, and the entrepreneurial ecosystem. Furthermore, certain constructs within the literature on the entrepreneurial mindset proved useful in interpreting a qualitative dataset. These included hierarchy of volition, opportunity versus necessity and the intention-action gap. Other constructs relied more on the availability of quantitative data to measure values and perceptions and so were less useful as explanatory tools in this research. Crossvergence was one such example. A conceptual framework situating entrepreneurial mindset, culture, and entrepreneurial ecosystem as influencing factors in the relationship between entrepreneurial intention and entrepreneurial action which was formed deductively from the existing literature was confirmed by the findings.  On a practical level, the main contribution this research makes is to offer a rich picture of the lived experiences of aspiring Saudi entrepreneurs negotiating both cultural and social influences as well as the entrepreneurial ecosystem. In doing so, the research and its main findings should be of interest to actors within the entrepreneurial ecosystem in Saudi Arabia as well as researchers active in this field, in particular to those people involved in business education, mentoring or other ways of assisting early stage entrepreneurs. For both practitioners and researchers, a set of practical recommendations is included at the end.