If you speak to the hospital doctors and nurses who bravely fought COVID-19 during the worst days of the pandemic, they will tell you that one of the biggest challenges was being able to move quickly enough in a very fluid situation. Every day the challenges would change, and their response would have to be altered, become more intensified, or require new elements. I believe that governments have something important to learn from this as we begin to decipher the key to unlocking our global economic recovery from the impacts of the pandemic.
Just like the doctors moving between hospital wards, learning from peers, changing techniques, and trying new products, governments were forced to react quickly, and adapt in ways that once seemed impossible. And while the hardest days of the of the pandemic appear to be over, the truth is that economic recovery remains a challenge, and a few steps further even from being fully fit to face what will be the new normal for the global economy.
So, we still need to act fast to prioritize and focus our energy and resources in order to have maximum impact, and one can find the answer to this question again by studying elements of the response to the pandemic.
A particularly revealing phenomenon was that while the global economy slowed, taking business revenues with it, the number of entrepreneurs applying to start new business went up in key markets. In Saudi Arabia specifically, we have seen a 24% increase in entrepreneurs starting a business since 2019.
In the middle of the pandemic, people in the U.S. started businesses at the fastest rate in more than a decade. Entrepreneurs are shrewd and would have known the risks that new small businesses face. But most of all—and this is the real crux—they were smart and nimble enough to see how the rapidly changing situation presented market opportunities.
And similar patterns emerged elsewhere: 2021 proved to be a record year of venture activity in Saudi Arabia, with an all-time high $548 million raised across 139 deals. It meant that Saudi Arabia became the second-most-funded country in the Middle East and North Africa Region (MENA), driven by a 270% increase in capital year-over-year, with tech-based businesses leading the 2021 venture transactions and Fintech startups accounting for 19% of all transactions registered in Saudi Arabia.
This all gives us a clear sign that, in this time of uncertainty, entrepreneurs are essential. They have the ability to move quickly enough to rethink the way we work and live, seize the new opportunities of this new world and, consequently, hold the key to rebooting the whole global economy and regenerating our countries.
So, when asking what we need to do, the answer is: To unleash the full potential of entrepreneurs. But how do we do that? How do we keep the momentum of new businesses and economic growth going?
It is here that the full force of government policy can and should be applied to maximum effect. We have seen the impact the state can have during the pandemic with short term, big spending measures such as furlough and business-support schemes. But just like the shift that hospital doctors make from emergency acute care to longer-term rehabilitation care, so too do we need to think about shaping the conditions that will maximize entrepreneurial potential over a longer period.
Governments have an array of measures in their toolbox that they can deploy to make entrepreneurs’ lives easier, like increasing access to finance, digitizing government services, altering regulation to offer smaller businesses access to government projects, regulatory sandboxing, and streamlining visa requirements. These are but a few that we have been deploying in Saudi Arabia.
Our government’s commitment to seizing this opportunity is highlighted by its significant investment to host the Global Entrepreneurship Congress in Riyadh at the end of this month. The congress will welcome a gathering of startup champions from around the world.
At the event, thousands of entrepreneurs, investors, and policymakers will gather in person to address the new challenges resulting from the pandemic. Giants of Silicon Valley, including Steve Wozniak, cofounder of Apple, and Marc Randolph, cofounder of Netflix, have been announced as key headliners at the event.
We are eager to share our ideas and learn what more we can do to free up entrepreneurs to do what they do best and give our global economy the best chance of recovery.
Saud Alsabhan is the vice governor for Entrepreneurship, Small and Medium Enterprises General Authority (Monsha’at), Saudi Arabia