In Kuwait, the government and large corporations dominate employment and the overall economy. However, nations can no longer afford to ignore SMEs. In terms of their overall influence on employment […]
In Kuwait, the government and large corporations dominate employment and the overall economy. However, nations can no longer afford to ignore SMEs. In terms of their overall influence on employment and flexibility in adjusting to changes in the marketplace, SMEs trump large corporations. Furthermore, World Bank cross-country research has concluded that SMEs contribute nearly two thirds of jobs across 50,000 firms in 104 countries surveyed.
SMEs have been largely left out of Kuwait’s economic growth story, but that seems to be changing. This previously unattended-to segment of Kuwait’s domestic economy is gaining momentum, and it appears that SMEs can start to look forward to a new phase of increasing attention being paid to their needs
The establishment of the Kuwait National Fund for SMEs is a promising development taken by the government to support SME growth. Funded by the government, this organization is seeking to provide not just finance for SMEs, but also training and know-how in getting start-ups off the ground. They also aim to take an objective look at the business environment and identify ways in which it can be improved in order to reduce barriers that exist for these businesses.
While Kuwait is by no means a poster child in terms of SMEs, the path it is on is promising. The establishment of the Kuwait National Fund has given credence to the budding start-up scene that is emerging, as entrepreneurs gain the knowledge and the courage to build, innovate, and drive change from the ground up.
Great potential and opportunity exists for SMEs to be the force of economic progress in the country, given the large youth population and access to financial, educational, and social capital. Yet there is a lot more to do to strengthen the entrepreneurial ecosystem in Kuwait, explains Mona Mukhaizeem, Co-Founder and Managing Partner of Sirdab Lab, Kuwait’s first start-up hub and creative lab. “Kuwait should focus on its unique strengths and lower the barriers to entry for entrepreneurs in order to attract new talent. The cultural aspect is important as well, and that involves addressing the issue of dependency on government jobs, the fear of failure, and creating an openness and willingness of entrepreneurs to talk to others about their ideas. We always tell founders that if they can Google their startup idea and find results that match it, then it is not unique and they do not need to hide it from others. The value is not in the idea, but how well they execute it.“ She added that, “The legal infrastructure in Kuwait needs a lot of improvement, both specifically for startups and in attracting foreign investment. Cultural attitudes, education, and legal regulations are the main areas we need to address.“
At the national level, policy makers often speak of sustainable development and on the importance of diversifying Kuwait’s economy, particularly in its Vision 2035. These goals require both public and private sector involvement and a commitment to economic reform. To ensure the long-term development of the country, SMEs must be a part of the equation. Although fashionably late to arrive, Kuwait has joined the global SME movement and is keen to boost growth of this segment domestically, and-not to limit or hinder their potential to the Kuwaiti market alone-is slowly giving SMEs the support they need to expand regionally and internationally in line with rapid globalization.
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