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Oman’s Entrepreneur Ecosystem Needs Strong Government Push

Oman’s Entrepreneur Ecosystem Needs Strong Government Push

Oman’s entrepreneurs can add value to the government’s job creation efforts, if given adequate support.

Small businesses are the lifeblood of any economy. But this sentiment resounds even more deeply with the Gulf, as the region looks to utilise human capital and diversify its economy.

The small Gulf state of Oman has been tackling the issue of unemployment among its citizens by adopting stringent policies on localisation. But the Sultanate is yet to make headway in creating a suitable ecosystem for entrepreneurs.

“Right now there are only two options for employment. Omanis can either enter the private sector or the public sector. There should be a third option,” said Qais Al Khonji, an Omani entrepreneur and founder of Genesis International.

“The scope must be widened because entrepreneurship fuels job creation.”

Entrepreneurs say that Oman’s current economic infrastructure is unfavourable for start-ups and the list of hurdles remains daunting for would-be business owners.

“The process for starting a company tends to be slow, right from opening of the company, to acquiring all the correct licenses, and then to actually begin operations,” said Al Khonji.

The businessman said that such kind of delays eventually end up costing more than an entrepreneur could afford at that stage.

“An ideal market for a budding entrepreneur is one in which there is support from their government (in the form of access to funding and support services) and where there is a clear demand for their products and services,” said Rasheed Eltayeb, a principal with Booz & Company’s public sector practice.

“The government has to continue to put in place the enabling environment, which includes supportive regulations, access to funding and provision of support services like marketing and other business planning services,” he said.

“[The government must] identify the focus areas and priorities for Oman’s economic growth, then make these opportunities visible and available to the private sector, including large companies, SMEs and entrepreneurs.”

The Oman government announced earlier this year that it will continue spending heavily on job creation and aims to add 20,000 public sector jobs this year.

Eltayeb said that creating jobs in the public sector is a short-term solution. He emphasised that Oman needs to build a larger private sector, comprising both MNCs and entrepreneurs, to support the government’s efforts in job creation.

Roadblocks For Aspiring Entrepreneurs

As with all the GCC countries, limited access to capital is a major problem for entrepreneurs in Oman.

“In the West and other parts of the world, there are a lot of funds that help entrepreneurs to start new businesses. But in this region, financiers are reluctant to invest in new business as there is minimal risk taking behaviour,” Eltayeb said.

Al Khonji agreed that access to finance for entrepreneurs can prove difficult.

“The government and the private sector established a fund called Sharakah in 1998 and have recently begun another called Rafd. But that is not enough,” said Al Khonji.

Eltayeb said entrepreneurs often lack clarity about demand-supply market dynamics.

Penetrating such low-income markets requires clever marketing techniques, said Al Khonji.

“Entrepreneurs need access to high quality support services including marketing to help ensure that their innovation has the best support and opportunity to succeed,” said Randa Bessiso, Middle East director, Manchester Business School.

“Small companies often lack the capabilities to market their business effectively, and the financial ability to hire marketing consultants,” said Eltayeb.

Industry experts said the government could look at providing marketing expertise to young entrepreneurs, in the absence of homegrown angel investors and seed accelerators.

Entrepreneurship In Schools

Al Khonji said that entrepreneurship is a concept that needs to be taught at schools to encourage more Omani youths to start their own businesses.

Eltayeb agreed that Omani youth have to change their mindsets and understand that the government cannot employ everybody.

“Students should think of how to build a private sector career in company X, or how to create a business that does Y,” he said.

“It is important for them to view their contribution to the job market in the context of the skills that they bring, or the business value of the ideas that they have, not which government entity provides the greatest job security.”

Eltayeb said that in order to enter the private sector, students should understand their competitive advantage in the market and the best time to inculcate this idea is during high school and college.

Bessio added that school is the perfect starting point to influence the thinking of young people and educate students on entrepreneurship.

“It all starts with an education system to help develop innovative thinking and a broad set of skills – these could be languages, interpersonal skills and business understanding. These skills allow them to identify and model an opportunity that could develop into a business model,” she said.

Going forward, SMEs and entrepreneurs will play an increasingly important role in buoying Oman’s future. To promote long term success and economic sustainability, Oman’s government must be prepared to don the roles traditionally carried out by accelerators.

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