Soft skills gap leaves Saudi entrepreneurs a step behind

Startup incubator Tasamy says skills shortage is holding back the rise of Saudi Arabia’s social enterprise sector

A Saudi startup incubator has identified a shortfall in soft skills among local entrepreneurs that threatens to slow the growth of social enterprise and could exacerbate the failure rate among startups over the coming years.

While Saudi youth may have the means to launch a business, they lack the soft skills – such as networking and drive – needed to succeed and scale in a difficult economy, said Lujain Al Ubaid, CEO of Tasamy for Social Entrepreneurship.

“Our research shows some of the biggest challenges entrepreneurs face are personal,” she said. “We need to build up their trust and confidence in themselves to push and strive more.”

Tasamy, a Riyadh-based nonprofit dedicated to supporting social ventures, offers a year-long programme to train entrepreneurs in the art of communication, listening and problem-solving, with a particular focus on the local economy. 

“One of the biggest mistakes commercial and nonprofit organisations make is to copy and paste programmes from elsewhere that are not effective in Saudi Arabia,” said Al Ubaid.

Among the skills Saudi entrepreneurs lack is what Al Ubaid calls active leadership – the ability to dig down to understand a problem and its potential solution. Young Saudis struggle to ask questions either “out of respect or because they think it will [negatively] influence the way they are perceived”, she said.  

“In the Middle East people understand leadership to mean being at the head of an arrow,” she added. “But active leadership is not only to be in front. It is also to influence change among others – whether that is through one-on-one conversations with decision makers, or with the beneficiaries of a service.”

"[Entrepreneurship] will be very helpful to mitigate Saudi Arabia’s youth employment issue"Social enterprise is a fledgling sector in the Gulf kingdom, as in the wider region. While data is lacking, a 2010 study by nonprofit Silatech estimated there were 78 globally-recognised social entrepreneurs in the Middle East; just one of which was from Saudi Arabia. In a market that leaves 30 per cent of youth employed – and where millions of Saudis live on or near the poverty line, despite the country’s oil wealth – experts believe social enterprise could be a tool to help tackle nationwide challenges.

Tasamy’s programme covers the practical aspects of running a business, while providing coworking space and networking opportunities to entrepreneurs. In the future, it hopes to offer seed funding too – the incubator is in talks with semi-governmental organisations in Saudi to establish an investment fund.

Each intake supports a limited number of entrepreneurs: between 15 and 20. To date, Tasamy has helped 16 entrepreneurs out of 1,700 applicants.

Early work in the sector focused on raising awareness of the concept and getting government ministries on board, according to Elham Al-Sanie, director of programmes and grants department at King Khalid Foundation (KKF), one of Tasamy’s backers.

“Regulation is among the major barriers for entrepreneurs. They either have to register as a nonprofit with the Ministry of Social Affairs or register as a company under the Ministry of Commerce,” she said.  

Progress is coming, however. New regulations to recognise nonprofit companies have been drafted and are awaiting approval, Al-Sanie said. “We think this will help.”

With one hurdle almost out of the way, Tasamy and Riyadh-based KKF have turned their attention to building the capacity of startups. KKF’s other initiatives include offering seed funding of between SAR50,000 ($13,300) and SAR100,000 to individual entrepreneurs and funding the social impact track of Saudi Arabia’s MIT Enterprise Forum, a startup competition.

 “We think entrepreneurship in general will open chances for youth to work,” said Al-Sanie. “We believe if they are able to employ themselves, relatives and peers, it will be very helpful to mitigate Saudi Arabia’s youth employment issue.”