The Riyadh Global Entrepreneurship Congress later this month will showcase the brightest Saudi entrepreneurs, willing to take risks. Economists who follow Schumpeter have always seen entrepreneurship as innovation, a novel way to combine existing resources for larger profits by those able to exploit new opportunities and take risks.

Knowledge-based economies around the world, and more recently in Saudi Arabia as part of Vision 2030, have encouraged such economic models to wean themselves away from a traditional energy-led base and join an information technology globalized world economy.

Moves to develop indigenous entrepreneurial eco-systems will not be easy, a concerted policy and multi-faceted effort has to be made. Countries such as Ireland, Singapore and Finland have become competitive by using focused fiscal incentives and, more crucially, harnessing their human resources. The common feature of these economies is that they are driven by supportive technology and intellectual capital, where creativity and innovation — the essence of entrepreneurship — makes the difference between success and failure. If done correctly, the private corporate sector and small businesses will drive the economy. Some societies have successfully moved from being manufacturing and export based to a knowledge economy with different emphasis.

Sometimes one is tempted to copy generic entrepreneurship models as a template, and add specific country flavors. But one has to be aware of sociological factors such as family and environmental dynamics when plotting an economic path. Other managerial skills are key, such as a focus on planning, organization and leadership, which are crucial for success. Having a dream is fine, but making it become a reality is another thing.

The role of entrepreneurs and small firms in job creation, innovation and productivity have significant public policy implications.

Dr. Mohamed Ramady

Finance is an important element for entrepreneurial takeoff, and venture capital is necessary. Entrepreneurial ideas do not come by accident or coincidence, but from a systematic process of scanning the business environment for new ideas.

Staying in business is the key ambition for small firms in the first few years after starting up. And young companies often need state financial assistance and role models to learn from. However, in the end, especially for aspiring Gulf countries, the supply entrepreneurs can be grown if attention is focused on the right attitude to risk, good education and access to information. The last few years in Saudi Arabia have been transformative, with the status quo being challenged by a raft of reforms to empower the private sector. Legal and economic moves have helped create entrepreneurial opportunities.

The role of entrepreneurs and small firms in job creation, innovation and productivity have significant public policy implications.

Without this new risk-taking attitude, a greater dominance of large companies and a more rigid industry structure would prevail. This is so across the Gulf, where some of the larger companies have reached their current status due to the ownership of near-monopoly foreign agency concessions and distribution agreements.

Entrepreneurs look for government support, especially in training initiatives, technical and managerial expertise for their startups. The local education system is also critical, as a mix of both technical and management skills can foster an enterprise culture. This should start from secondary school, as a strong enterprise learning from school to university is needed for a forward-looking education system.

There should also be greater collaboration between industry and education in order to match ideas to commercial possibilities. Some Saudi universities have successfully taken up this challenge by setting up business techno-valleys, or hubs, with large local and multi-national companies. The centers invite industry experts to give lectures to students on their startup experiences, and crucially, on their insights on the advantages and disadvantages of remaining in the hands of founding entrepreneurs.

Often, true entrepreneurs live out their original ideas, sell out, and move on to new ones, as a process of self-renewal. The Riyadh Global Entrepreneurship Congress, which runs from March 27 to 30, will put on show a whole range of such aspiring young business talent.

• Dr. Mohamed Ramady is a former senior banker and professor of finance and economics at King Fahd University of Petroleum and Minerals in Dhahran.