New business challenges in the Saudi market Thesis

New business challenges in the Saudi market - Thesis Example The objective of this research is to acquire a better insight business challenges in the Saudi market. Many emerging economies have been turning to their new businesses for economic growth. This has been the primary drivers of economic growth for most of the emerging and developing economies. Also, majority of the businesses in many countries worldwide are dotted with these new businesses. However, in Saudi Arabia, the performances of their new businesses have been very dismal. In fact, despite accounting for over 90% of their industries, these start-up companies only manage to employ less than a quarter of their labor force. As such, this situation has been believed to be a strong contributor to the high unemployment rate in the country. However, it seems that problems beyond entrepreneurship drives are pervasive in the country. In fact, there are many foreign workers in the country and statistics show that foreign male workers hold an even bigger chunk of employment than their Saud i counterparts. This has shown a more systemic problem in the country involving the education system of Saudi Arabia. Also, there should be an increase in the contribution to the economy from the private sector and the paper will attempt to explain the underlying problems affecting the new businesses in Saudi Arabia. Moreover, there policies of the country such as the Nitaqat and Saudization will be explored so as to shed more understanding into the possible solutions to the wanting contribution of the private sector in the country’s economy. ... The country is governed by a monarchy system of government and is a predominantly Muslim country. It is among the richest nations among the Arab states and this is mainly due to the oil that it exports. In 2010, the country’s oil fields churned out approximately 10.5 billion barrels per day (bbl) and so far, this has been the greatest source of revenue for this Arab state (CIA World Factbook, 2011 and Library of Congress, 2006). However, there is a growing need to diversify the sources of income for the government and basically, the country cannot forever rely on the public sector and its oil to be the only revenue generators for the country. Therefore, the country needs to encourage the strong growth of the public sector, especially the new businesses that will have to provide the necessary diversity to the Saudi economy as well as the needed boost for its economic growth. Although the country enjoy a relative prominence among its regional neighbours, the economic weakness of the country is seeping out reflected by the increasing unemployment in the kingdom. According to the ILO (2010), the global crisis that emanated from the deep recession among the advanced economies has adversely affected Saudi Arabia’s economy. Being among the world’s most voracious oil consumers, it is easy to see why the deep downturn in the advanced economies has greatly affected the economy of oil producers, most notably Saudi Arabia. The adverse effect of the economic turmoil that deepened the problem of unemployment in Saudi Arabia clearly demonstrates the lack of diversity in its economy since it is heavily reliant on oil. This commodity has been largely controlled by the state therefore it is easy to see why the public sector has been