Dubai – MENA Herald: A long-term drop in oil prices makes investment in Small and Medium Enterprises (SMEs) essential for GCC countries. The findings are part of BLOOVO.COM’s latest research on the beneficial role SMEs play in catalysing economic diversification and employment.
BLOOVO.COM’s latest research shows that SMEs already account for 90% of all registered companies in the MENA region, and employ some 17 million people. The report calls upon GCC countries to put together programmes to evolve a more powerful SMEs ecosystem to generate employment and economic growth opportunities.
“The lower price of oil has significant impact on GCC countries, given that they have historically derived 80% of all government revenues from petrochemical sources. IMF figures show that export revenues for GCC countries fell by around USD 275 billion in 2015 due to lower prices. A way of offsetting this shortfall is by building up the SMEs sector to be more innovative, productive and economic value adding,” says BLOOVO.COM Co-founder and CEO, Ahmad Khamis.
BLOOVO.COM’s research shows that the region appears to be on the cusp of a transition to a more advanced economic framework, underpinned by knowledge workers and the private sector. SMEs will play a crucial role in this new framework.
BLOOVO.COM estimates that the total GCC-wide number of people employed in SMEs will hit 20 million by 2020; but aggressive government support could take that figure to over 22 million.
SMEs will evolve to play a crucial role in generating opportunities for employing nationals in the private sector. “It’s worth remembering that the GCC is a region of large youth populations. It’s important to get young nationals involved in development efforts, and that will only happen through new jobs generated by SMEs,” Khamis adds.
The research indicates that there isn’t just room for SMEs to become plentiful, but to also become smarter and more innovative. Advanced data capabilities and artificial intelligence are bringing back the concept of the knowledge worker, and favouring technologically innovative economies over traditional manufacturing ones.
“We’re going to see SMEs become more innovative in terms of technology. Creating a knowledge worker ecosystem is a complex task, but one that GCC countries are focusing on. A country’s knowledge economy can be judged to a degree by using the WEF’s Global Competitive Index (GCI), where we see Switzerland and Singapore in the top two positions while the first GCC country is 14th. So there’s room to grow,” says Iyad Abu Hweij, BLOOVO.COM’s Co-founder and President.
Qatar leads the GCC at 14 on the GCI, followed by the UAE at 17th. Saudi Arabia is 25th and Kuwait 34th, with Bahrain and Oman coming in at 39th and 62nd respectively.
“BLOOVO.COM has conducted a far-reaching search into SMEs capabilities in the GCC region to support public and private sector investment in a thriving SMEs ecosystem to deliver innovation. This ecosystem should allow synergies and networks to develop and focus on technology acquisition, application oriented R&D, skilled workforce development, favourable regulations and a strong intellectual property regime,” says Iyad Abu Hweij, BLOOVO.COM’s co-founder.