Competitiveness and the State of Entrepreneurship                       in Saudi Arabia                                   ...
State of Saudi Arabian Competitiveness       •  Assessing the competitive position of Saudi Arabia in 2009                ...
Competitiveness and the Global Crisis       •  Governments all over the world are focused on short-term crisis          ma...
Prosperity Performance                                                                  Selected CountriesPPP-adjusted GDP...
What is Competitiveness? •  Competitiveness depends on the productivity with which a nation uses    its human, capital, an...
Comparative Labor ProductivityGDP per employee (PPP                                        Selected Countries  adjusted US...
Labor Force Mobilization                                                            Selected Countries Employees as % ofTo...
Fixed Investment Rates Gross Fixed Investment                                    Selected Countries   as % of GDP (2007)  ...
Foreign Direct Investment Flows    FDI Flow                                                   Saudi Arabia  (millions USD)...
Saudi Arabia’s Export Share Trends World Export Share               By Type of Product, 1991-2006   (current USD)Source: U...
Innovative Capacity                                   Innovation Output, Selected Countries Average U.S. patents per 1mill...
Determinants of Competitiveness                                                Microeconomic Competitiveness              ...
Macroeconomic Competitiveness                      Social Infrastructure and                                         Macro...
Microeconomic Competitiveness: Quality of the                                    Business Environment                     ...
Microeconomic Competitiveness: Cluster Development                                                Huston Oil and Gas Clust...
Saudi Arabia’s Competitiveness                                      Progress on the Competitiveness Index                 ...
Saudi Arabia’s Position                                             Macroeconomic Competitiveness                         ...
Saudi Arabia’s Position                                             Microeconomic Competitiveness                         ...
Macroeconomic Competitiveness:                                        Saudi Arabia                                   Socia...
Saudi Arabia Competitiveness                                                   StrengthsNote: Rank versus 131 countries; o...
Ease of Doing Business Ranking, 2008 (of 181 countries)                                                                   ...
National Cluster Export Portfolio                                                                                       Sa...
Share of World Export’s by Cluster        < 0.41%                                                       Saudi Arabia, 2006...
Saudi Arabian Business Environment                                         Progress in 2008       •  Significant efforts u...
Saudi Arabian Competitiveness                                                               Selected WeaknessesNote: Rank ...
Towards a Saudi Arabian Competitiveness Agenda       •  Continue efforts on educational reform, including a stronger push ...
Clusters and Economic Policy                                     Business Attraction              Education and Workforce ...
Towards a Saudi Arabian Competitiveness Agenda       •  Continue efforts on educational reform, including a stronger push ...
Clusters and Economic Diversification                    Upgrade the Quality and                                          ...
Towards a Saudi Arabian Competitiveness Agenda       •  Continue efforts on educational reform, including a stronger push ...
Emerging Companies and Competitiveness       Emerging companies:                   •  are a crucial driver of competitiven...
Entrepreneurship in Saudi Arabia                                       The Opportunity       •  Large, youthful and growin...
Entrepreneurship in Saudi Arabia                                                    Constraints        Culture        •  A...
The Saudi Fast Growth 100       Fast Growth Companies                  45       •  5 years and older       •  Minimum of 4...
Saudi Fast Growth Companies                                     Facts & Figures       •  Average entrepreneurial age at fo...
Towards a Saudi Arabian Competitiveness Agenda       •  Continue efforts on educational reform, including a stronger push ...
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(GCF2009) Professor Michael E. Porter- "Competitiveness and the State of Entrepreneurship"

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(GCF2009) Professor Michael E. Porter- "Competitiveness and the State of Entrepreneurship"

  1. 1. Competitiveness and the State of Entrepreneurship in Saudi Arabia Professor Michael E. Porter Harvard Business School January 27, 2009 This presentation draws on ideas from Professor Porter’s articles and books, in particular, The Competitive Advantage of Nations (The Free Press, 1990), “Towards a New Global Competitiveness Index,” in The Global Competitiveness Report 2008 (World Economic Forum, 2008), with S. Stern, M. Delgado, C. Ketels, “Clusters and the New Competitive Agenda for Companies and Governments” in On Competition (Harvard Business School Press, 1998), and ongoing research on clusters and competitiveness. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means - electronic, mechanical, photocopying, recording, or otherwise - without the permission of Michael E. Porter. Further information on Professor Porter’s work and the Institute for Strategy and Competitiveness is available at www.isc.hbs.edu Version: January 24, 2009, 3pm20090126 – Saudi Arabia.ppt 1 Copyright 2009 © Professor Michael E. Porter
  2. 2. State of Saudi Arabian Competitiveness •  Assessing the competitive position of Saudi Arabia in 2009 –  Progress over the last year •  Defining the strategic agenda •  Igniting entrepreneurship and SME development20090126 – Saudi Arabia.ppt 2 Copyright 2009 © Professor Michael E. Porter
  3. 3. Competitiveness and the Global Crisis •  Governments all over the world are focused on short-term crisis management •  Short-term actions will be most effective if they are tied to long-term competitiveness improvements •  The crisis offers an opportunity for making changes that are difficult during normal times20090126 – Saudi Arabia.ppt 3 Copyright 2009 © Professor Michael E. Porter
  4. 4. Prosperity Performance Selected CountriesPPP-adjusted GDP per Capita, 2007 Norway Qatar ($73,079) USA Ireland Kuwait Hong Kong Canada Singapore Switzerland Iceland Netherlands Australia Austria Sweden UK Finland Germany Taiwan Japan France Italy Bahrain Spain Greece UAE Slovenia New Zealand Israel Saudi Arabia Czech Republic South Korea Portugal Oman Estonia Hungary Slovakia Lithuania Latvia Poland Croatia Russia Argentina Chile Malaysia Mexico Brazil South Africa Costa Rica Romania Lebanon Turkey Thailand Colombia Tunisia Egypt China Syria Jordan Indonesia Sri Lanka Philippines Pakistan India Vietnam Yemen Nigeria Cambodia Bangladesh Growth of Real GDP per Capita (PPP-adjusted), CAGR, 1998-2007Source: EIU (2008), authors calculations20090126 – Saudi Arabia.ppt 4 Copyright 2009 © Professor Michael E. Porter
  5. 5. What is Competitiveness? •  Competitiveness depends on the productivity with which a nation uses its human, capital, and natural resources. –  Productivity sets the standard of living (wages, returns on capital, returns on natural resources) that a country can sustain –  It is not what industries a nation competes in that matters for prosperity, but how productively it competes in those industries –  Productivity in a national economy depends on a combination of domestic and foreign firms –  The productivity of “local” or domestic industries is fundamental to competitiveness, not just that of export industries•  Nations compete to offer the most productive environment for business•  The public and private sectors play different but interrelated roles in creating a productive economy20090126 – Saudi Arabia.ppt 5 Copyright 2009 © Professor Michael E. Porter
  6. 6. Comparative Labor ProductivityGDP per employee (PPP Selected Countries adjusted US$), 2007 Qatar ($122,262) CAGR 2002-2007 Norway Average rate 2001- 2006 USA Ireland France Austria Hong Kong Kuwait UK Finland Canada Sweden Australia Italy Germany Singapore Switzerland Japan Spain Saudi Arabia Bahrain Saudi Arabia Oman Slovenia New Zealand South Korea UAE Slovakia Hungary Czech Republic Estonia Poland Lithuania Latvia Chile Malaysia Argentina Mexico Russia Turkey Iran South Africa Brazil Egypt Iraq (-6.3%) Jordan Thailand Syria Sri Lanka Philippines Indonesia China Yemen Pakistan India Vietnam Cambodia Compound annual growth rate (CAGR) of real GDP per employee (PPP-adjusted), 2002-2007Note: In some cases 2006 data used where 2007 data unavailable.Source:– authors calculation, EIU (2009), Groningen Growth and Development Centre (2009)20090126 Saudi Arabia.ppt 6 Copyright 2009 © Professor Michael E. Porter
  7. 7. Labor Force Mobilization Selected Countries Employees as % ofTotal Population, 2007 OECD average: 0.48Note: Use most recent year available, either 2007 or 2006Source: The Conference Board and Groningen Growth and Development Centre, Total Economy Database, April 200820090126 – Saudi Arabia.ppt 7 Copyright 2009 © Professor Michael E. Porter
  8. 8. Fixed Investment Rates Gross Fixed Investment Selected Countries as % of GDP (2007) China (40.4%) Qatar (44.8%) Latvia India Vietnam Spain Croatia South Korea Slovenia Sri Lanka Iceland Iran Slovakia Jordan Australia Thailand Colombia Singapore Yemen Indonesia Czech Ireland Republic Tunisia Argentina Japan Denmark New Zealand Malaysia Canada Lebanon Syria Kuwait Egypt Pakistan UAE France Russia Turkey Hong Kong Chile Norway Finland Oman Saudi Arabia Sweden Israel Germany UK Brazil Bahrain USA Philippines Change in Gross Fixed Investment (as % of GDP), 2003 - 2007Source: EIU, 2007.20090126 – Saudi Arabia.ppt 8 Copyright 2009 © Professor Michael E. Porter
  9. 9. Foreign Direct Investment Flows FDI Flow Saudi Arabia (millions USD)Source: World Investment Report, 200820090126 – Saudi Arabia.ppt 9 Copyright 2009 © Professor Michael E. Porter
  10. 10. Saudi Arabia’s Export Share Trends World Export Share By Type of Product, 1991-2006 (current USD)Source: UNComTrade, WTO (2008)20090126 – Saudi Arabia.ppt 10 Copyright 2009 © Professor Michael E. Porter
  11. 11. Innovative Capacity Innovation Output, Selected Countries Average U.S. patents per 1million population, 2003-2007 Hong Kong Ireland South Africa Turkey Spain Brazil Mexico Kuwait Malaysia Argentina Egypt China Russia India Thailand Saudi Arabia Poland Chile CAGR of US-registered patents, 2003 – 2007 525 patents =Source: USPTO (2008), EIU (2008)20090126 – Saudi Arabia.ppt 11 Copyright 2009 © Professor Michael E. Porter
  12. 12. Determinants of Competitiveness Microeconomic Competitiveness Quality of the Sophistication National State of Cluster of Company Business Development Operations and Environment Strategy Macroeconomic Competitiveness Social Infrastructure Macroeconomic and Political Policies Institutions Endowments •  Macroeconomic competitiveness creates the potential for high productivity, but is not sufficient •  Productivity ultimately depends on improving the microeconomic capability of the economy and the sophistication of local competition20090126 – Saudi Arabia.ppt 12 Copyright 2009 © Professor Michael E. Porter
  13. 13. Macroeconomic Competitiveness Social Infrastructure and Macroeconomic Political Institutions Policies •  Basic human capacity •  Fiscal policy –  Basic education –  Government surplus/deficit –  Health system –  Government debt •  Monetary policy •  Political institutions –  Inflation –  Political freedom –  Interest rate spread –  Voice and accountability –  Political stability –  Government effectiveness –  Centralization of economic policymaking •  Rule of law –  Judicial independence –  Efficiency of legal framework –  Business costs of corruption –  Civil rights20090126 – Saudi Arabia.ppt 13 Copyright 2009 © Professor Michael E. Porter
  14. 14. Microeconomic Competitiveness: Quality of the Business Environment Context for Firm Strategy and Rivalry  Localrules and incentives that encourage investment and productivity Factor –  e.g. performance based salaries, incentives for capital Demand (Input) investments, intellectual property Conditions Conditions protection  Vigorous local competition  Access to high quality  Sophistication of local –  Openness to foreign and local business inputs competition customers and needs – Natural endowments – Strict quality, safety, and – Human resources Related and environmental standards – Capital availability Supporting – Physical infrastructure Industries – Administrative infrastructure (e.g. registration, permitting)  Availability of suppliers and – Scientific and technological supporting industries infrastructure – Information and transparency infrastructure •  Many things matter for competitiveness •  Successful economic development is a process of successive upgrading, in which the business environment improves to enable increasingly sophisticated ways of competing20090126 – Saudi Arabia.ppt 14 Copyright 2009 © Professor Michael E. Porter
  15. 15. Microeconomic Competitiveness: Cluster Development Huston Oil and Gas Cluster Upstream Downstream Oil Oil Oil Oil Oil & Natural Oil & Natural Trans- Oil Oil Distribution Wholesale Retail portation Trading Refining Gas Marketing Gas Marketing Exploration & Completion & Gas Gas Gas Gas Gas Gas Development Production Gathering Processing Trading Transmis- Distribution Marketing sion Oilfield Services/Engineering & Contracting Firms Specialized Equipment Technology Subcontractors Business Suppliers Services Services (e.g. Oil Field Chemicals, (e.g. Drilling Consultants, (e.g. Surveying, (e.g. MIS Services, Drilling Rigs, Reservoir Services, Mud Logging, Technology Licenses, Drill Tools) Laboratory Analysis) Maintenance Services) Risk Management) Specialized Institutions (e.g. Academic Institutions, Training Centers, Industry Associations)20090126 – Saudi Arabia.ppt 15 Copyright 2009 © Professor Michael E. Porter
  16. 16. Saudi Arabia’s Competitiveness Progress on the Competitiveness Index 2007 2008 Estimated Ranking: New Global Competitiveness Index 41 36 Macroeconomic Competitiveness 32 35 Microeconomic Competitiveness 53 36 GDP Per Capita Rank (ppp-adjusted) 36 36Note: Rank versus 131 countries; overall, Saudi Arabia ranks 36th in 2008 PPP adjusted GDP per capita and 36h in Business Competitiveness.Source: Institute for Strategy and Competitiveness, Harvard University (2009)20090126 – Saudi Arabia.ppt 16 Copyright 2009 © Professor Michael E. Porter
  17. 17. Saudi Arabia’s Position Macroeconomic Competitiveness 2007 2008 Estimated Macroeconomic Competitiveness Index 32 35 Social Infrastructure and Political Institutions 48 41 Macroeconomic Policy 20 27Note: Rank versus 131 countries; overall, Saudi Arabia ranks 36th in 2008 PPP adjusted GDP per capita and 36h in Business Competitiveness.Source: Institute for Strategy and Competitiveness, Harvard University (2009)20090126 – Saudi Arabia.ppt 17 Copyright 2009 © Professor Michael E. Porter
  18. 18. Saudi Arabia’s Position Microeconomic Competitiveness 2007 2008 Estimated Microeconomic Competitiveness Index 53 36 National Business Environment 53 35 Company Operations and Strategy 54 38Note: Rank versus 131 countries; overall, Saudi Arabia ranks 36th in 2008 PPP adjusted GDP per capita and 36h in Business Competitiveness.Source: Institute for Strategy and Competitiveness, Harvard University (2009)20090126 – Saudi Arabia.ppt 18 Copyright 2009 © Professor Michael E. Porter
  19. 19. Macroeconomic Competitiveness: Saudi Arabia Social Infrastructure Macroeconomic and Political Policies Institutions •  Social policies have addressed poverty •  Saudi Arabian macroeconomic polices and basic social needs, but basic are generally sound, but transparency education and health remain remains limited weaknesses •  Political institutions are improving, but •  The budget is exposed to swings in oil the predictability and transparency of revenues, which leads to pro-cyclical reform is limited fiscal policies •  The Saudi legal system is improving, but •  Inflation has risen, exposing weaknesses fundamental reform is necessary in monetary policy20090126 – Saudi Arabia.ppt 19 Copyright 2009 © Professor Michael E. Porter
  20. 20. Saudi Arabia Competitiveness StrengthsNote: Rank versus 131 countries; overall, Saudi Arabia ranks 36th in 2008 PPP adjusted GDP per capita and 36h in Business Competitiveness.Source: Institute for Strategy and Competitiveness, Harvard University (2009)20090126 – Saudi Arabia.ppt 20 Copyright 2009 © Professor Michael E. Porter
  21. 21. Ease of Doing Business Ranking, 2008 (of 181 countries) Saudi Arabia Favorable Unfavorable Median Ranking, OECD Saudi Arabia per capita GDP rank: 32 Saudi Arabia Doing Business rank: 16 Saudi Arabia 2010 goal: 102007 Rank (Change) 24 (+8) 3 (+2) 6 (-1) 33 (+17) 49 (+25) 38 (+10) 44 (-1) 48 (-2) 82 (+25) 51 (-8) 136 (-1)Source: World Bank Report, Doing Business (2008) 20090126 – Saudi Arabia.ppt 21 Copyright 2009 © Professor Michael E. Porter
  22. 22. National Cluster Export Portfolio Saudi Arabia, 1998-2006 Oil and Gas (1.19%, 13.7%) $189,356,469 Saudi Arabia’s Average World Export Share: 1.67%Saudi Arabia’s world export market share, 2006 Plastics Business Services Chemical Products Prefabricated Enclosures and Structures Processed Foods Construction Materials Agricultural Products Jewelry, Precious Metals and Collectibles Metal Mining and Manufacturing Forest Products Change In Saudi Arabia’s Overall World Export Share: +0.95% Change in Saudi Arabia’s world export market share, 1998-2006 Exports of US$1.1 Billion = Source: Prof. Michael E. Porter, International Cluster Competitiveness Project, Institute for Strategy and Competitiveness, Harvard Business School; Richard Bryden, Project Director. Underlying data drawn from the UN Commodity Trade Statistics Database and the IMF BOP statistics. 20090126 – Saudi Arabia.ppt 22 Copyright 2009 © Professor Michael E. Porter
  23. 23. Share of World Export’s by Cluster < 0.41% Saudi Arabia, 2006 0.41 – 0.84% Fishing & Textiles 0.84 – 1.67% Fishing Entertainment Prefabricated Products Hospitality Enclosures 1.67 – 3.34% & Tourism Agricultural > 3.34% Products FurnitureSaudi Arabia’s Transportation BuildingAverage World Distribution & Logistics Aerospace Fixtures, ConstructionExport Share: Services Vehicles & Equipment & Materials1.67% Information Defense Services Tech. Heavy Processed Business Lightning & Food Jewelry & Construction Services Analytical Electrical Precious Services Education & Instruments Equipment Metals Forest Knowledge Power Medical Products Creation Generation Financial Devices Communi- Services cations Publishing & Printing Biopharma- Equipment Heavy ceuticals Machinery Motor Driven Production Chemical Products Technology Apparel Products Tobacco Leather & Oil & Automotive Related Gas Aerospace Metal Products Plastics Engines Manufacturing Footwear Sporting Marine & Recreation Equipment GoodsNote: Clusters with overlapping borders have at least 20% overlap (by number of industries) in both directions. 20090126 – Saudi Arabia.ppt 23 Copyright 2009 © Professor Michael E. Porter
  24. 24. Saudi Arabian Business Environment Progress in 2008 •  Significant efforts underway to improve the education system, especially universities •  Recent reforms in the financial sector, but high volatility of the domestic market is a sign of immaturity •  Improvements in business regulations, but much remains to be done •  Improved availability of ICT •  Some progress on encouraging larger presence of foreign companies in the Saudi economy •  Some progress on cluster development, especially in areas related to oil and gas20090126 – Saudi Arabia.ppt 24 Copyright 2009 © Professor Michael E. Porter
  25. 25. Saudi Arabian Competitiveness Selected WeaknessesNote: Rank versus 131 countries; overall, Saudi Arabia ranks 36th in 2008 PPP adjusted GDP per capita and 36h in Business Competitiveness.20090126 – Saudi Arabia.ppt Strategy and Competitiveness, Harvard University (2009)Source: Institute for 25 Copyright 2009 © Professor Michael E. Porter
  26. 26. Towards a Saudi Arabian Competitiveness Agenda •  Continue efforts on educational reform, including a stronger push on workforce development •  Make efficient capital provision to the private sector the central goal of financial market development •  Modernize corporate governance and reporting practices, especially in GLCs •  Shift the focus of business regulatory reform from discrete process improvements to improving the overall regulatory experience •  Use FDI attraction and the promotion of new business formation to challenge legacy market structures with little competitive pressure •  Create a comprehensive cluster development program to drive deeper competitiveness improvement and provide the structure for economic diversification20090126 – Saudi Arabia.ppt 26 Copyright 2009 © Professor Michael E. Porter
  27. 27. Clusters and Economic Policy Business Attraction Education and Workforce Training Science and Technology Investments Export Promotion (e.g., centers, university departments, technology transfer) Clusters Market Information Standard setting and Disclosure Specialized Physical Environmental Stewardship Infrastructure Natural Resource Protection •  Clusters provide a framework for organizing the implementation of public policy and public investments towards economic development20090126 – Saudi Arabia.ppt 27 Copyright 2009 © Professor Michael E. Porter
  28. 28. Towards a Saudi Arabian Competitiveness Agenda •  Continue efforts on educational reform, including a stronger push on workforce development •  Make efficient capital provision to the private sector the central goal of financial market development •  Modernize corporate governance and reporting practices, especially in GLCs •  Shift the focus of business regulatory reform from discrete process improvements to improving the overall regulatory experience •  Use FDI attraction and the promotion of new business formation to challenge legacy market structures with little competitive pressure •  Create a comprehensive cluster development program to drive deeper competitiveness improvement and create the structure for economic diversification20090126 – Saudi Arabia.ppt 28 Copyright 2009 © Professor Michael E. Porter
  29. 29. Clusters and Economic Diversification Upgrade the Quality and Upgrade Local Industries / Efficiency of Existing Export Clusters Products and Services Broaden Existing Clusters, Build Clusters Around Strong (Including Resources Clusters) MNCs Develop Related Clusters Invest in Enabling Conditions Build Positions in Clusters that Where the Country Has Cluster are Strong in Neighboring Specific Advantages Regions20090126 – Saudi Arabia.ppt 29 Copyright 2009 © Professor Michael E. Porter
  30. 30. Towards a Saudi Arabian Competitiveness Agenda •  Continue efforts on educational reform, including a stronger push on workforce development •  Make efficient capital provision to the private sector the central goal of financial market development •  Modernize corporate governance and reporting practices, especially in GLCs •  Shift the focus of business regulatory reform from discrete process improvements to improving the overall regulatory experience •  Use FDI attraction and the promotion of new business formation to challenge legacy market structures with little competitive pressure •  Create a comprehensive cluster development program to drive deeper competitiveness improvement and create the structure for economic diversification •  Unleash entrepreneurship and SME development20090126 – Saudi Arabia.ppt 30 Copyright 2009 © Professor Michael E. Porter
  31. 31. Emerging Companies and Competitiveness Emerging companies: •  are a crucial driver of competitiveness improvement •  create most of the new jobs in advanced economies •  increase the intensity of competition •  are the backbone of clusters Creating a culture of entrepreneurship in Saudi Arabia is a crucial priority20090126 – Saudi Arabia.ppt 31 Copyright 2009 © Professor Michael E. Porter
  32. 32. Entrepreneurship in Saudi Arabia The Opportunity •  Large, youthful and growing population •  Growing markets with many undefended niches •  Stable economy with a prudent investment posture •  Modest income taxes •  Large and sustained government investments in the economy •  Increasing foreign interest in investing in the Middle East •  Emerging venture capital industry •  Opportunity to serve the entire region20090126 – Saudi Arabia.ppt 32 Copyright 2009 © Professor Michael E. Porter
  33. 33. Entrepreneurship in Saudi Arabia Constraints Culture •  Absence of an entrepreneurial culture Skills •  Lack of a skilled Saudi workforce •  Absence of general and industry specific training programs for employees Regulatory Processes •  Still cumbersome government regulation, red tape, and user experience Infrastructure for Entrepreneurship •  Lack of program and supporting institutions for start-up and emerging companies –  e.g, incubators, technical assistance, and entrepreneur networks •  Lack of public visibility and media coverage of emerging companies Cluster Development •  Lack of supplier development programs at large companies •  Absence of cluster collaboration organizations providing support to SMEs20090126 – Saudi Arabia.ppt 33 Copyright 2009 © Professor Michael E. Porter
  34. 34. The Saudi Fast Growth 100 Fast Growth Companies 45 •  5 years and older •  Minimum of 4 million SAR (largest 3 billion SAR) •  40% compound annual growth rate •  Created 15,000 jobs in the past 5 years Winners are ranked according to their revenue growth and each company goes through a rigorous qualification process. Fast Growth Start Up Companies 27 •  Less than 5 years old •  198% average growth from 2006 to 2007 •  Minimum of 2 million SAR (largest 1.3 billion SAR) Fast Growth Companies to Watch 23 •  Up and coming.20090126 – Saudi Arabia.ppt 34 Copyright 2009 © Professor Michael E. Porter
  35. 35. Saudi Fast Growth Companies Facts & Figures •  Average entrepreneurial age at founding 32 years •  There are 8 women founders •  Winners are 100% college graduates, half with master’s degrees •  More than half have founded more than one company •  About 25% plan to go public •  80% plan to launch another business in the next 2 years •  Most common industries: High Tech & Telecom 23% Construction & Engineering 12% Health & Education 10%20090126 – Saudi Arabia.ppt Management Consulting 35 10% Copyright 2009 © Professor Michael E. Porter
  36. 36. Towards a Saudi Arabian Competitiveness Agenda •  Continue efforts on educational reform, including a stronger push on workforce development •  Make efficient capital provision to the private sector the central goal of financial market development •  Modernize corporate governance and reporting practices, especially in GLCs •  Shift the focus of business regulatory reform from discrete process improvements to improving the overall regulatory experience •  Use FDI attraction and the promotion of new business formation to challenge legacy market structures with little competitive pressure •  Create a comprehensive cluster development program to drive deeper competitiveness improvement and create the structure for economic diversification •  Unleash entrepreneurship and SME development •  Move from 10 by 10 to a broader competitiveness strategy20090126 – Saudi Arabia.ppt 36 Copyright 2009 © Professor Michael E. Porter

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