Steve Jobs (1955-2011), the founder of Apple Inc, once said that only those who are crazy enough to think they can change the world, they are able to do so. In many cases, one of those crazy people was an entrepreneur. Entrepreneurs are not the same as business owners. Both entrepreneurs and small business owners take the risk to start businesses, but with different degrees of risk, different goals and with different impact on the society. Entrepreneurs are those who are able to make impact on people’s lives. Do we have them in the GCC region? Let’s illustrate some examples.
The Kuwaiti entrepreneur, Dr Naif Al Mutawa, is creator of THE 99 Superheroes which are inspired by Islamic teaching. He noticed that most Muslim children are inspired by the western comic superheroes such as Superman and Batman. Where are the Muslims’ superheroes? Dr Al Mutawa asked. Through his Tashkeel Media Group Company, he created THE 99 — Muslim heroes coming from different parts of the world. Some from Malaysia, some form India, some from Indonesia, some from the Arab world and some from GCC. The heroes move and act based on Islamic teachings. They are available in comic books, animated films and theme parks. Technology, entertainment and design are the salient feature of THE 99’s vision. Dr Al Mutawa was praised by the US President, Barack Obama, at the last entrepreneurs’ summit.
Then again, shopping centres were traditionally known as a places for people to shop and dine, but not as entertainment playgrounds where families with their children could spend their time in a mini-Disneyland. In the UAE, the Mall of the Emirates and the Dubai Mall have twisted this idea. Empowered by two leading businessmen — Majid Al Futtaim for the Mall of the Emirates and Mohammad Al Abbar for Dubai Mall — the two malls revolutionised the way people shop and entertain. By introducing new entertainment concepts such as indoor skiing (Ski Dubai), teenage entertainment (Sega Republic), innovative children’s play facilities (Kidzania) and many outdoor and indoor restaurants and cafes and large numbers of cinemas, these malls have become leading malls in the region where developers from Europe come to learn from their experiences.
The Bateel story is an excellent example of exploiting an existing resource in a creative way. The GCC is rich with its date palms. For years the dates were used by either households — directly taking them from palm trees — or by some small businesses in which traditionally packed dates were sold in supermarkets or grocery stores. Bateel, which was established in Saudi Arabia, was the first to introduce the idea of gourmet dates. The idea was gradually developed into a new world of gourmet date delicacies, such as date-chocolate truffles, pastries, jams, date honey and sparkling drinks. Through its development of dates products, Bateel established itself as a business which reflects the rich cultural tradition of the region.
Although we have these excellent examples, it is hard to say that business firms in the GCC invent or develop their own products and services. The culture of invention and innovation hardly exists here. Most of the businesses act as distributors, agents or franchises of foreign products and services. Since lots of them represent and sell well-known international brands that generate demand, they are happy with what they have. So why bother to invent or innovate? The market forces — such as mature markets or limited markets, which usually force firms to look for other opportunities and eventually consider innovating and developing their products — do not exist in GCC markets. This is because of high population growth and a developing market which has not reached its maturity. This situation led to over-dependence on foreign products and services. The over-dependence can have negative consequences on society and national security. Some negative consequences are already being experienced in GCC society, such as people having a larger appetite to consume than to produce. It also limits the creation and the creativity of society in general and of the entrepreneurs, scholars and researchers in particular. This over-dependence can pose a threat to national security too. Imagine, for example, a case of international sanctions imposed on the GCC in a similar manner as those imposed on some other countries. Can the GCC support itself internally?
The GCC business owners are excellent examples of successful businesspeople and managers. They possess the spirit of entrepreneurs which qualify them to be pioneers in their field of business. Their businesses are important to the GCC market because of their role in facilitating society, market and industry needs. Nevertheless, they fall short of creating great impact on people’s lives. Compared with individuals like Henry Ford (1863-1947), who developed the assembly-line technique to mass produce automobiles, which revolutionised transportation around the world; J.R. Simplot (1909-2080) who is credited with pioneering the first commercial frozen French fries in the late 1940s; and Bill Gates, who developed operating system software for the newly-emerging personal computer market that changed the way we did computing forever, GCC business owners do not really aspire to create businesses the way true entrepreneurs do.
For entrepreneurs to flourish and innovate, the GCC governments must create a supporting environment for innovation. The main pillars of this environment are culture, entrepreneurial quality, supporting institutions and funding.
First, a country’s culture is an important dimension that has direct influence on every variable in the business environment. A supporting culture for innovation must be established. This culture must promote freedom of thinking which allows individuals in the society to imagine and break away from their daily habits and norms without feeling guilty or shameful.
Second, entrepreneurs must acquire qualities such as experience, motivation and education. These qualities will increase their abilities to be creative and innovative. Governments must encourage business environments that are fertile with these qualities.
Third, the sophistication and efficiency of institutional systems such as educational, financial, governmental, legal and regulatory are essential support for the innovative process. The final pillar is funding, which is necessary for every entrepreneurial endeavour. This requires encouragement, either through incentives or regulations, for investors such as venture capitalists or angel investors and lenders such as banks to be willing to invest in new innovative ideas.
GCC governments should help build these pillars and facilitate interconnectivity among them. Moreover, governments will not be able to achieve this unless they themselves become efficient and convinced of the role of entrepreneurs and innovation in their economy.
Dr Khalid M. Alkhazraji is a UAE academic and former undersecretary of labour. He is the chairman of Al Kawthar Investment. You can follow him on Twitter at www.twitter.com/DrAlkhazraji. This article is the fourth of a six-part series.