Interview: Bader Al Reziza
What measures can be implemented to help small and medium-sized enterprises (SMEs) be more competitive in the global market?
BADER AL REZIZA: Advances in ICT have made it easier for small enterprises to conduct business globally. They have also made it easier for such organisations to deal with challenges of scale. Further, SMEs can benefit from knowledge sharing and adjust quickly to market changes when they work closely with other firms.
Even though the economy is becoming increasingly interconnected and information can be transmitted quickly and cheaply, physical borders are still crucial. Clustering is especially helpful for young businesses since it allows them access to new ideas and information. Some of the downsides of being small can be offset by specialising in a certain market segments. Even though globalisation makes government policy responses less flexible, they can still play a significant role in encouraging SMEs to innovate. This can be accomplished by implementing regulations and incentives, as well as by promoting institutional learning.
Because there are many different kinds of SMEs, any strategies or policies designed to assist them in becoming more innovative must be tailored to meet the needs of different user groups. For high-tech SMEs, which make up less than 15% of the segment, the most critical goals are promoting the development of the private venture capital industry and related services, as well as adjusting the management and goals of public research and development grant programmes. Access to novel solutions and effective, innovative policies should better address the needs of the vast majority of SMEs classified as technology followers.
SMEs account for more than 95% of businesses in Saudi Arabia. In 2000 the Asharqia Chamber set up the SME Centre, which offers a wide range of services to small companies, including consulting. The centre also offers entrepreneurship training for people who want to start their own business. In 2022 the chamber launched a new programme called Asharqia Incubator, which provides support to start-ups during the first three years of their development.
How do you assess the contribution of manufacturing to GDP in the Eastern Province?
AL REZIZA: The private sector in the Eastern Province has helped the economy flourish over the past several years. It is worth noting that the province’s manufacturing sector is the second-largest economic contributor in the region after the oil and gas industry. Jubail, the largest industrial city in the Middle East, is one of several such locations in the province driving this growth. Furthermore, Dammam, Al Ahsa and Ras Al Khair have well-developed manufacturing sectors.
By the end of the second quarter of 2022, the total number of factories in the region had risen to 2010. This figure accounted for around 22.2% of the total number of factories in the Kingdom during that time. The number of newly registered factories licensed in the region during the same period reached 62, representing about 18.5% of the total number of factories under construction in the Kingdom during the same period. Some 58 of those newly built manufacturing facilities have since begun operations.
Which markets offer the most promising opportunities for expanding exports and inward investment?
AL REZIZA: Saudi Arabia’s conventional trade partners are the US and the UK, and the chamber has continued to receive delegations from these countries in recent years. Additionally, there is growing demand from Central Asia and Europe, including Kazakhstan, Estonia and Norway. The Saudi market is becoming increasingly attractive to foreign investors and traders due to ongoing efforts to develop the best business environment in the region, a goal that is in line with Vision 2030. To keep pace with economic progress, the chamber is striving to provide improved services.
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