Entrepreneurship in the Arab World: Status, Challenges, and the Role of Government
Ali Abukumail, Faleh M. F. E. Alrashidi, and Khaleda Atta, World Bank
The Arab world faces a range of challenging economic conditions. These include more perennial issues such as the need for employment for the region’s large youth population and the weak participation of women in the workforce, as well as others that have emerged or intensified since the Arab Spring such as political instability, conflict, and the large-scale displacement of people.1 With traditional pathways to job creation such as manufacturing export-led growth and diversification not sufficiently materializing and given the need for inclusive approaches to respond to development challenges, Arab world policymakers are promoting entrepreneurship as a key strategy to create jobs, reap the benefits of the new (digital) economy, and diversify their economies.
Global experience shows that entrepreneurship stimulates job creation because most new jobs are created by young firms (three to five years of age), which contribute to higher sales and productivity.2 How successful this stimulation is, however, varies since it builds on the maturity of the underlying ecosystems that support entrepreneurship. This is a critical matter that Arab world policymakers must take into account if they are to succeed at leveraging entrepreneurship to aid in responding to some of the region’s core challenges, particularly the jobs challenge.