As Saudi Arabia begins to reduce its economic dependency on petroleum, the government recognizes the importance of encouraging entrepreneurship in achieving this goal. As oil revenues decline so does the Saudi government’s ability to provide subsidized services to their citizens, who in turn are seeking to create their own economic opportunities. This is particularly true for the large and growing youth population.
The number of Saudis over 15 years of age will increase by 6 million by 2030 bringing at least 4.5 million additional Saudis into the labor force. The current labor force includes 5 million Saudis representing 45% of total employment as 55% of jobs are filled by foreign workers. As oil revenues decline and the Kingdom provide less resources to its population, its focus is to create jobs and economic opportunities for its citizens.
This is a massive transition that will require patience and investment. A key strategy is for the Kingdom to diversify its economy beyond crude exports including privatization of government companies, developing tourism and building manufacturing capacity. The government must invest in entrepreneurship to help reinvent industries and bring new ones to the country. The central investment needs to be in education and training to empower its people to generate their own economic resources rather than rely on government subsidies.
This is a long journey ahead but the first step in any journey is to recognize the need for change. I am hopeful that the government will provide the right policies, tools and training for its citizens to build and lead its new economy.
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