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Higher interest in entrepreneurship and social development in MENA despite Arab Spring, reveals survey
Source: BI-ME , Author: Posted by BI-ME staff
Posted: Sun March 25, 2012 8:07 pm

UAE.  An online survey conducted by Bayt.com, the Middle East’s number one jobsite, in partnership with the Program on Arab Reform and Democracy at Stanford University's Center on Democracy, Development, and the Rule of Law as well as research and consulting organisation YouGov, has revealed that while the Arab Spring had an immediate negative impact on the economy in the MENA region, its effect has been positive in driving higher interest in both economic and social development.

The majority of survey respondents state that the Arab Spring has resulted in deteriorating employment conditions. In countries experiencing revolutions, the effect is worse:  58% of respondents in Tunisia, 68% of respondents in Egypt, 71% of respondents in Syria, and 65% in of respondents in Bahrain stated that the employment situation now is either worse or much worse than before the revolution.

Personal economic situations are also perceived to be negatively affected by the Arab Spring. The percentage of respondents saying that their individual economic situation is now worse than it was before the revolutions ranges from a high of 66% in Syria, to a low of 11% in Algeria. 49% of Egyptian respondents say they have been affected negatively, while 30% of Tunisians say the same.

In the GCC countries, the percentage of professionals saying that their individual economic situation is now worse is consistent, except for Bahrain: 30% in the UAE, 22% in Saudi Arabia, 24% in Qatar, 29% in Oman, and 25% in Kuwait. On the other hand, 55% of respondents in Bahrain claimed that their situation is worse.

The negative economic impact of the Arab Spring is felt across all age groups and economic levels. However, 34.44% of professionals in the private sector say that they have been negatively affected compared to 20.22% in the public sector.

Yet, even with this disparity, the survey shows that professionals are no longer looking at the government as the main provider of employment opportunities. In most countries, roughly two-thirds of respondents express interest in the private sector, with 71% of Jordanians, 74% of Lebanese,  70% of Syrians, 68% of Egyptians, 66% of Saudis, 75% of Bahrainis, 48% of Tunisians, and 51% of Moroccans all saying they would prefer to work in a private company.

Professionals in Algeria and Qatar were most interested in working in the public sector, with only 35% and 39% respectively wanting to work in the private sector.

“While the effects of the recession are apparent, the Middle East’s businesses have also had to deal with the more recent Arab Spring. For the most part, countries consider their personal employment and business situations to be the same.

Yet, in those countries hardest hit by the Arab Spring – Bahrain, Egypt and Syria – the tone is that overall employment conditions, both personal and countrywide, have become somewhat worse as a result,” said Sundip Chahal, CEO, YouGov.

The survey reveals that the majority of respondents are familiar with the term “entrepreneurship” (only 29% are not familiar at all). On average, there is a higher level of familiarity with entrepreneurship in the Gulf countries, with 22% of respondents very familiar with the term in the UAE, Oman, and Kuwait followed by 20% in Qatar and Bahrain.

Yet, most new businesses in the region fail. 44% of Egyptian, 45% of Jordanian, 57% of Omani, and 50% of Saudi business owners stated their current businesses were not performing well.

In every country surveyed except Qatar, less than 20% of self-employed respondents stated that their business was running well. When asked about the key barriers that prevent professionals from starting their own business, the reasons that professionals most agreed with were: lack of financing, inability to self-finance, and fear of failure. Other reasons stated by the respondents include economic uncertainty, the lack of entrepreneurial skills, and strict government regulations.

Regardless of low success rates, there is widespread interest in business ownership; in every country surveyed a large proportion of respondents said that if given the choice they would prefer to be self-employed or own a business.

About 40% of respondents expressed interest in being self-employed, with the lowest being 29% in Algeria and the highest being 52% in Lebanon. As far as the reasons are concerned, 50% of respondents said that they started a business because they wanted greater independence.

The second and third most popular reasons are tied to economic necessity and reasons: 27% said it was because they could not find a job at that time and 20% said because of higher income.

Rabea Ataya, CEO of Bayt.com said: “Our data shows that over a quarter of entrepreneurs in the Arab world were motivated to start their own companies due to lack of job opportunities.  Therefore, as a result of recent economic challenges in the region, we should expect to see a growing interest in entrepreneurship as a way to drive income and a growing contribution of the SME sector in providing jobs.  At Bayt.com, not only do we provide a wealth of jobs and recruitment solutions to connect between people looking for jobs and business owners, we also empower our members with access to live data regarding the employment and economic pulse of the region.”
 
Respondents also seem open to the idea of working in the field of social entrepreneurship. In general, the percentage of respondents not interested was higher in the Gulf countries; roughly 17% of respondents in Kuwait, Oman and Qatar, and 20% of Emiratis.

Those who are interested in starting NGOs stated lots of challenges, with lack of finance, government interference, and the difficulty of registering NGOs as key factors hindering the progression of social entrepreneurship.  In fact, 54% of respondents said that they were not able to start the NGO they wanted.

“Entrepreneurship is one way in which the need for job creation in the private sector in the Arab world can be addressed, but it cannot prosper unless measures to resolve those problems are taken,” said Lina Khatib, Manager of Stanford's Program on Arab Reform and Democracy. “The international development community can capitalize on the opportunity to nurture this sector in order to help with this process.”

Data for the Bayt.com, Stanford and YouGov Entrepreneurship in the Social Sector and Arab Springs survey was collected online from December 22, 2011 – January 16, 2012, with 12,518 respondents from the GCC (UAE, KSA, Kuwait, Oman, Qatar, Bahrain), Levant (Lebanon, Syria, Jordan) and North Africa (Egypt, Morocco, Algeria, Tunisia).

 

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