Social women entrepreneurship in the Kingdom of Saudi Arabia
Journal of Global Entrepreneurship Researchvolume 5, Article number: 11 (2015)
Women are taking the lead as change agents and innovators in the society. The participation of women in economic activities occupied a prominent place in the list of strategic priorities and national development plans in the Kingdom of Saudi Arabia. Fostering the development of entrepreneurship sector in this country is one of the political agenda in empowering the women. Considering that the country has a very young population and a growing youth bulge a fact which leads itself well to the rise of women entrepreneurship. This paper highlights the status of social entrepreneurship in Saudi Arabia to illuminate why and how its ventures are implemented. The research objective’s end view is to contribute towards the fostering of social entrepreneurship among Saudi women entrepreneurs to boost their confidence in performing the activities that create difference towards progressive development of the socio-economic frames of the country. The study focused on the social entrepreneurship activities prioritized, challenges faced by women social entrepreneurs and strategic measures recommended towards sustainable social entrepreneurship in the Kingdom. The study found out that the basic issue prioritized by social entrepreneurs was training and development; the areas of challenges met were financing, regulatory frameworks and technical support. The strategic measures recommended towards fostering social entrepreneurship in the Kingdom of Saudi Arabia were focused on access to funding, entrepreneurship culture, tax and regulation, education and training and coordinated support.
Entrepreneurship is the process of seizing an opportunity to introduce new products or services in an effort to transform inventions and innovations into monetary value (Szycher, 2014). Schumpeter viewed entrepreneurship as a force of “creative destruction.” The entrepreneur carries out “new combinations,” thereby helping render old industries obsolete. Established ways of doing business are destroyed by the creation of new and better ways to do them. Drucker (1985) took this idea further, describing the entrepreneur as someone who actually searches for change, responds to it, and exploits change as an opportunity. Players of entrepreneurship are classified as social and business oriented. Business entrepreneurs typically measure performance in profit and return, but social entrepreneurs also take into account a positive return to society. Social entrepreneurs typically furthers broad social, cultural, and environmental goals and commonly is associated with the voluntary and nonprofit sectors (Thompson, 2002). At times, profit may also be a consideration for certain companies or other social enterprises.
Social entrepreneurship is the process of pursuing innovative solutions to social problems. It is an approach to social and environmental problems that combines innovation and opportunity just the way any entrepreneur would (Adetu, 2014). Adetu argued, that social entrepreneur’s primary purpose is not profit maximization for shareholders, but using revenues generated to drive transformational social change. More specifically, social entrepreneurs adopt a mission to create and sustain social value. They draw upon appropriate thinking in both the commercial enterprise and nonprofit worlds and operate in a variety of organizations: large and small; new and old; religious and secular; nonprofit, for-profit, and hybrid (Dees, 1998).
The field of social entrepreneurship has attracted enormous attention from various sectors in the society. It, thus, permeates the mainstream consciousness in both the developed and developing countries as a promising mechanism for alleviating poverty, inequality, environmental degradation and other societal problems. It offers vast opportunities to dynamic persons or groups to use their ability and resourcefulness to create societal-economic value on a sustainable basis. A growing number of initiatives all over the globe seems to challenge the obstacles that prevented businesses from providing services to the poor. Collectively, those initiatives constitute a phenomenon dubbed as “social entrepreneurship”, where it employs novel types of resources and combining them in new ways (Seelos & Mair 2004).
Social entrepreneurship is gaining attraction across the Arab world (Magrabi 2012). New entrepreneurs seek not simply to innovate or make money, but to do social good also to achieve a lasting impact on their businesses as well as the communities. Magraby, further disclosed that social entrepreneurship in Saudi Arabia is slowly growing in the past few years. Perhaps, social entrepreneurship is still a very new concept that people are still grasping (Al-Shaaban, 2013). Al-Shaaban claimed also that despite the presence of charities, NGOS or profit based business in the country, Saudi society still lacks a clear view of social entrepreneurship as it is often linked with social responsibility and voluntary work. Hence, the study of social entrepreneurship is an important issue that needs to be fully addressed in the Kingdom of Saudi Arabia.
Statement of the problem
This research study explored the current state of social entrepreneurship in Saudi Arabia with an end view of understanding how and why social entrepreneurship activities are adopted and implemented to foster entrepreneurial minded and socially conscious Saudi women who could make the difference. To achieve this goal, the following specific problems were answered: (1) what are the social entrepreneurship activities prioritized by social women entrepreneurs? (2) what are the challenges faced by women social entrepreneurs in implementing social entrepreneurial activities? (3) what strategic management measures can be recommended towards fostering social entrepreneurship program in the Kingdom of Saudi Arabia?
This part of the study presents the documentary review of local and foreign literature and studies that are relevant to the theme of the study. The discussions are topically presented to make it more congruent for users’ understanding of various issues at hand. Appropriate theories are also included to emphasize the importance of the concept versus practice of social entrepreneurship in the status of the study. They also become the anchors providing sound bases of interpreting secondary data and crafting the significance thereof by the research.
Much have been written about entrepreneurship, entrepreneurs and their impact to the socioeconomic well-being of a country or a particular place. Varied meanings were offered by academes and practitioners and are still adopted by private and government agencies and became the guiding principles of business and social entrepreneurship. Blundel and Lockett (2011) claimed that entrepreneurship is a phenomenon associated with entrepreneurial activity and involves a complex pattern of social interactions that extends beyond individual entrepreneurs to incorporate teams, organizations, networks and institutions. For Carter and Evans (2012), it is also a capacity, but for innovation, investment and expansion in new markets, products and techniques. Entrepreneurs therefore, involves the relationship of entrepreneurial opportunities and enterprising individuals, and the ability to identify opportunities as a key part of the entrepreneurial process.
The meanings of entrepreneurship as mentioned above imply that an enterprise is at work whenever an individual takes the risks and invest resources to make something unique or something new, designs a new way of doing something that already exists, or creates new markets. They are considered externalities in dealing with management functions. To make the activity work effectively, these elements are required - opportunities, the will of individuals to enterprise and embraces risks.
As to its applicability, entrepreneurship is not only true for business enterprises, but can also be done in schools, hospitals, and other social institutions (Fajardo, 1998). Hence, entrepreneurship is increasingly recognized as a crucial element in fostering economic development and growth (Audretsch, et al. 2006). The process of entrepreneurship is widely considered to stimulate competition, drive innovation, create employment, generate positive externalities, increase productivity by introducing technological change and provide a route out of poverty (Audretsch & Thurik, 2001). This literature provides that entrepreneurial activities’ applicability are not limited to one class of enterprise alone. It has wider acceptability and considered to a crucial element in fostering not only economic development and growth, but social growth as well.
YEA G20 (2013) reported that Saudi Arabia is one of the best performing rapid-growth economies. The country is trying to diversify its economy away from its dependence on oil. Encouraging entrepreneurs to build a more vibrant economy based on entrepreneurial businesses is seen as a crucial part of this process for global happenings nowadays are characterized by fast-paced change. The World Bank (2013) rated Saudi Arabia as the 22nd most economically competitive country in the world, up from 67th in 2004. With low rates and a light administrative burden, Saudi Arabia’s tax regulations make the country appealing for startups and overall fairly entrepreneurship-friendly. A strong emphasis on developing an entrepreneurial mindset at all levels of education has led to the creation of programs that seek to empower and educate entrepreneurs. This literature provides insight as to how a responsible government is determined to assist in building the capacities of entrepreneurial-mindset individuals. Easing them out with burden like tax is an act of assistance. Generally, tax relief makes the country appealing for startups and overall fairly entrepreneurship-friendly. Most importantly, educating young minds and re-educating other levels could produce more on the socio-economic endeavors of any government.
Surprising to some, Lamontagne (2014) disclosed the existence of female entrepreneurs that are thriving in Saudi Arabia. As the political and economic landscape has shifted, women have taken advantage of the move away from social constraints on their gender to follow their dreams and build their businesses and become a catalyst for change. Al Masah Capital (‘AMCL’) (2010) reported that women in Saudi including expatriates constitute 45 % of Saudi Arabia’s population and has a literacy rate of 79 %. Despite this, only 65 % of them are employed. A large part of Saudi Arabia’s wealth is in the hands of its women totaling US$11.9 billion.
In the article from Forbes (2013), it was disclosed that Saudi officials are particularly focused on employing its large youth population, which generally lacks the education and technical skills the private sector needs. Riyadh has substantially boosted spending on job training and education, most recently with the opening of the King Abdullah University of Science and Technology - Saudi Arabia’s first co-educational university. As part of its effort to attract foreign investment, Saudi Arabia acceded to the World Trade Organization in 2005. The government has begun establishing six “economic cities” in different regions of the country to promote foreign investment and plans to spend $373 billion between 2010 and 2014 on social development and infrastructure projects to advance Saudi Arabia’s economic development.
Indeed, the literatures above-cited reveal the huge potential for including Saudi women in the labor force and utilizing them in the broader economic development. King Abdullah bin Abdulaziz Al-Saud has been taking steps to modernize the Saudi economy and diversify it away from energy by encouraging the development of technical skills for the local youth. Believing that empowering and educating more women would be a major step in this direction, King Abdullah is focusing on building the required infrastructure and offering greater opportunities of education for the youth and women.
Today, women entrepreneurs account for up to a third of all businesses operating in the formal economy worldwide. However, the majority of those in developing and transitioning economies are very small and micro enterprises, with little potential for growth. Apart from being under-represented in enterprises of all sizes, the bigger the firm the less likely it is to be headed by a woman. Societal attitudes and norms inhibit some women from even considering starting a business, while systemic barriers mean that many women entrepreneurs stay confined to very small businesses often operating in the informal economy. This not only limits their ability to earn an income for themselves and their families but impedes them from realizing their full potential to contribute to socio-economic development, job creation and environmental stewardship (International Labor Organization 2014).
Charantimath (2005) affirmed that the participation of women in economic activities is necessary not only from a human resource point of view but is essential even for the objective of raising the status of women in society. The economic status of women is now accepted as an indicator of a society’s stage of development. Therefore, it becomes imperative for the government to frame policies for the development of entrepreneurship among women. The long-term objectives of the development programs for women should aim to raise their economic and social status in order to bring them into the mainstream of national life and development. For this, due recognition has to be accorded to the role and contribution of women in the various social, economic, political, and cultural activities. Guillen (2013) pointed out that women entrepreneurs in the developing world are so important because they can truly make a difference. In spite of decades of massive efforts to promote economic development and eradicate poverty, human societies differ vastly in terms of the quantity and quality of economic and social wellbeing that individuals can hope to enjoy during their lifetimes. These fundamental differences manifest themselves at all levels, namely across continents, countries, rural and urban areas, social classes, and communities. Governments and nonprofits have attempted to create markets, launched development programs, built physical infrastructure, and created new institutions; and yet, poverty and lack of opportunity continue to be rampant realities in much of the developing world.
The above literature depicts the significant role of women entrepreneurs in economic development. The essential support from the broader ecosystem like the governments and non-profit organizations are emphasized for fostering entrepreneurial initiatives among women.
Martin & Osberg (2007) wrote that the nascent field of social entrepreneurship is growing rapidly and attracting increased attention from many sectors. The term itself shows up frequently in the media, is referenced by public officials, has become common on university campuses, and informs the strategy of several prominent social sector organizations. The reasons behind the popularity of social entrepreneurship are many. On the most basic level, there’s something inherently interesting and appealing about entrepreneurs and the stories of why and how they do what they do. People are attracted to social entrepreneurs like last year’s Nobel Peace Prize laureate Muhammad Yunus for many of the same reasons that they find business entrepreneurs like Steve Jobs so compelling – these extraordinary people come up with brilliant ideas and against all the odds succeed at creating new products and services that dramatically improve people’s lives.
Ebrashi (2013) narrated that social entrepreneurship was introduced in 1970s to address the issue of social problems sustainably. Banks (1972) first mentioned “social entrepreneur” in his classical work of “The Sociology of Social Movements” to describe the need to use managerial skills to address social problems as well as to address business challenges. Social entrepreneurship practices emerged in the 1980s with the establishment of Ashoka - first organization to support social entrepreneurs in the world. In addition, the term “social innovation” – the need for using management practices in nonprofit organizations to increase the efficiency and effectiveness of producing social good was described by Drucker (1985) in his book. Meanwhile, Kuratko (2009) pointed out that social entrepreneurship is a new form of entrepreneurship that exhibits characteristics of nonprofits, governments, and businesses. It applies traditional (private sector) entrepreneurship’s focus on innovation, risk taking, and large-scale transformation to social problem solving. The social entrepreneurship process begins with a perceived social opportunity that is translated into an enterprise concept. Where, resources are then ascertained and acquired to execute the enterprise goals. Makhlouf (2011) stated that social entrepreneurship starts with an entrepreneur who has a novel idea, an innovative product or service, a creative approach to solving a perceived problem, a new business model, and a previously untried approach to product or service delivery.
Social entrepreneurship differs from business entrepreneurship for it is after sustainable solutions to societal problems and aims at social change rather than market expansion. It is, therefore, seen more as an agent of change than a profit-seeking enterprise. Martin and Osberg (2007) describe social entrepreneurship as having the following three components: (1) identifying a stable but inherently unjust equilibrium that causes the exclusion, marginalization, or suffering of a segment of humanity that lacks the financial means or political clout to achieve any transformative benefit on its own; (2) identifying an opportunity in this unjust equilibrium, developing a social value proposition, and bringing to bear inspiration, creativity, direct action, courage, and fortitude, thereby challenging the stable state’s hegemony; and (3) forging a new, stable equilibrium that releases trapped potential or alleviates the suffering of the targeted group, and through imitation and the creation of a stable ecosystem around the new equilibrium ensuring a better future for the targeted group and even society at large.
In Saudi Arabia, the formal concept of social entrepreneurship was introduced in 2008 during the US-Saudi Women’s Forum on Social Entrepreneurship (Richi, 2011). Richi further wrote that through the U.S.-Middle East Partnership Initiative (MEPI), ICF International launched US–Saudi Forum on social entrepreneurship at Jeddah, Saudi Arabia. The sponsors believed that social entrepreneurship encourages civic engagement, social responsibility, and professional development while empowering women. The forum introduced the concept of social entrepreneurship among 100 students from three different colleges. It taught the selected students the skills necessary to set up social enterprise through an introductory seminar. The same was followed by Intensive Skills Institute for selected participants to develop and submit business plans for social enterprise in Saudi Arabia to funding sources. ICF International educated over 100 young Saudi women about the power of social entrepreneurship to shape their communities and lay a conceptual foundation of social entrepreneurship after the forum. Consequently, 30 promising students were selected to attend more in-depth training at Babson College, where they developed a business plan and then spend the remaining of the program launching their venture in their community with support from local and virtual mentors. The ICF International implemented a program that was both in line with MEPI, included goals of empowering youth in fast rate economic reform and was relevant, useful and culturally appropriate to women in Saudi Arabia. The result is a program rooted in the belief that social entrepreneurship focus on social impact economic development is the ideal topic to encourage specific engagement social responsibility and professional development while simultaneously advancing opportunities for women in Saudi Arabia (Richi, 2011).
The above literature provides clear insight on the background of social entrepreneurship in the Kingdom of Saudi Arabia. It discusses how interested stakeholders and concerned organizations fulfilled their responsibility of fostering social enterprises by implementing program initiatives to actualize its principles through knowledge sharing and skill building. The same literature demonstrates also how responsible social enterprises dealt with their obligations in introducing a program rooted in the belief that social entrepreneurship could have a social impact on economic development. It is an ideal topic to encourage specific engagement on social enterprise responsibility and professional development while simultaneously advancing opportunities for women and youth in the country.
As a good guide and for better understanding of the basics of social entrepreneurship, few noteworthy people whose work exemplifies the modern definition of “social entrepreneurship” include: Florence Nightingale founder of the first nursing school and developer of modern nursing practices; Robert Owen, founder of the cooperative movement; and Vinoba Bhave, founder of India’s Lang Gift Movement. During the nineteenth and twentieth centuries, some of the most successful social entrepreneurs effectively straddled the civic, governmental, and business worlds. Such pioneers promoted ideas that were taken up by mainstream public services in welfare, schools, and health care.
(The US-Saudi Women’s on Social Entrepreneurship 2011) defined social entrepreneurship is the deliberate use of business principles to generate societal and economic value in response to a community need. Adbou, et al. (n.d) wrote that the social entrepreneurship in the Middle East puts emphasis on different elements of the social entrepreneurship phenomenon such as: “pattern-breaking,” systemic,” or “permanent” social change; entrepreneurial innovation; or financial sustainability. The report draws on existing literature to focus on four central principles of social entrepreneurship: (1) Achievement of positive social impact - social entrepreneurship responds to communities that have been marginalized or excluded by existing market actors and nonmarket institutions; (2) Non-conventional thinking - Social entrepreneurship aims for what Joseph Schumpeter called “creative destruction,” a revolutionary transformation of a pattern of production that is often associated with entrepreneurship at large but, in the case of social entrepreneurship, is applied to social challenges; (3) Use of sustainable methods - Social entrepreneurship must include a strategy for achieving financial sustainability, such as earning income; and (4) Innovation that can be adapted and “scaled up” beyond a particular local context. It is by pioneering ideas that can be applied on a larger scale that social entrepreneurship is able to contribute to “systemic” and path breaking change. However, Abu-Saifan (2012) pointed out also that social entrepreneurship is the field in which entrepreneurs tailor their activities to be directly tied to the ultimate goal of creating social value. In doing so, they often act with little or no intention to gain personal profit. A social entrepreneur “combines the passion of a social mission with an image of business-like discipline, innovation, and determination commonly associated with, for instance, the high-tech pioneers of Silicon Valley” (Dees, 1998).
Parallel to Abu-Saifan points, Peredo and McLean (2006) elucidated that social entrepreneurship is exercised where some person or person: (1) aim either exclusively or in some prominent way to create social value of some kind, and pursue that goal through some combination of (2) recognizing and exploiting opportunities to create this value; (3) employing innovation, (4) tolerating risk; and (5) declining to accept limitations in available resources. Salarzehi et al. (2010) clarified that social entrepreneurship includes innovative programs to improve the livelihood that who have no business of financial power and in using of social services opportunity are faced with the limitations. This group of benevolent entrepreneurs acts, based on the values and value mission that believe in them, to initiative and innovate social security to satisfy the needs of the society. The essence of social entrepreneurship is an innovative voluntary and the kind of friendship with a combination of good will. These kinds of entrepreneurs give services to human being aim to get an inner satisfaction. Social entrepreneurship is a process which in, individuals and groups and social sectors working voluntary in order to produce value by using remained social assets and opportunities. In societies, people gather together and get along to have cooperation and bilateral cooperation in order to solve social issues, social capital on the base of trust has been created to that extent in which they can create long lasting capacity for dealing with.
In the study conducted by Kostetska and Berezyak (2014) on social entrepreneurship as an innovative solution mechanism of the social problems of society, affirmed that for each country, regardless of its social and economic development, one of the main key indicators of success is the social stability of society. That is why the use in practice of such innovation in our society as a social technology social entrepreneurship became actual. The study’s further concluded that social entrepreneurship as a social innovation has found its niche and its place in the new information and innovation, innovation economy and continues to gain momentum. In Ukraine, such a business can set a goal of occupational therapy, social rehabilitation, and new mechanisms in order to solve these social problems. Based on a systematic approach to the problems of integration of social enterprises in the economy of Ukraine, it was found out that for further development of the state should provide favorable conditions, in particular, to establish the legal and tax conditions for the creation of social enterprises, to realize a favorable form of systemic interaction between government, business and citizens, to create a favorable institutional environment for social enterprises.
The study of Vollmann (2008) on social entrepreneurship for the German context, gives a compact analysis of the determining factors for social entrepreneurship in Germany. Therefore, it applies the analytic framework used by the Global Entrepreneurship Monitor (GEM) to Social Entrepreneurship. The current situation of framework conditions for Social Entrepreneurship in Germany can be described by the following: (1) Financial Support - availability of financial resources, equity, and debt, for new and growing social enterprises including grants and subsidies; (2) Government Policies - the extent to which government policies concerning taxes, regulations and their application are neutral or whether these polices discourage or encourage new and growing social enterprises; (3) Government Programs - the presence of direct programs to assist new and growing social enterprises at all levels of government – national, regional, and municipal; (4) Education and Training - the extent to which training in starting or managing small, new, or growing social enterprise features in the educational and training system and the quality, relevance and depth of such education and training in creating or managing small, new or growing social enterprises; (5) Research and Development Transfer - the extent to which national and economic research and development leads to new social opportunities, and whether or not R&D is available for new, small, and growing social enterprises; (6) Market Openness/Barriers to Entry - the extent to which commercial arrangements are prevented from undergoing constant change and re-deployment, preventing new and growing social enterprises from competing and replacing existing suppliers, subcontractors, and consultants; and (7) Cultural and Social Norms - the extent to which existing social and cultural norms encourage, or do not discourage, individual actions that may lead to new ways of conducting social business or social entrepreneurship and, in turn, lead to greater dispersion in wealth and income.
As cited by Hany (2011), Ashoka, a foundation focusing on developments in social entrepreneurship, provides one the most reflective definitions. It describes them as “individuals with innovative solutions to social problems. They are ambitious and persistent, taking major social issues and offering new ideas for wide-scale change. Rather than leaving societal needs to government or business sectors, social entrepreneurs find what is not working and solve the problem by changing the solution and persuading entire societies to take new leaps”. In addition to having a vision, determination, and an ability to identify problems and innovative solutions, a social entrepreneur has to be a persuasive communicator and a good organizer. He is usually driven by the desire to open new pathways and attain measurable outcomes. Like business entrepreneurs, they also have a higher than average risk-taking propensity and tolerance for uncertainty.
Shapiro (2013), on social entrepreneurs in America, explained that the term social entrepreneur was originally coined by Bill Drayton in the early 1980s to refer to someone with the passion and focus of an entrepreneur who tackles a social challenge. Drayton recognized that many of the same attributes that drive traditional entrepreneurs to create new ventures also drive social entrepreneurs. Drayton built Ashoka to find and fund the most extraordinary of these men and women around the world. All over the world, individuals with and without resources are crafting new opportunities and finding new ways to approach age-old dilemmas. Dees (1998), wrote the following definition: “Social entrepreneurs play the role of change agents in the social sector by: (1) adopting a mission to create and sustain social value (not just private value), (2) recognizing and relentlessly pursuing new opportunities to serve that mission, (3) engaging in a process of continuous innovation, adaptation, and learning, (4) acting boldly without being limited by resources currently in hand, and (5) exhibiting heightened accountability to their constituencies.
Social entrepreneurship’s challenges
Martin & Osberg (2007) cited that social entrepreneurship is an appealing construct precisely because it holds such high promise. If that promise is not fulfilled because too many “non-entrepreneurial” efforts are included in the definition, then social entrepreneurship will fall into disrepute, and the kernel of true social entrepreneurship will be lost. Their goal is not to make an invidious comparison between the contributions made by traditional social service organizations and the results of social entrepreneurship, but simply to highlight what differentiates them.
This literature deals with the cause and benefits of social entrepreneurship. It is anchored on the ideal focus of the phrase. It also warns that we could be misled as to the achievement of the purpose due to too much irrelevance “non-entrepreneurial” efforts. There is a need to clarify the contributions made by traditional social service organizations and the results of social entrepreneurship and highlights the difference. Perhaps, the same literature could be added to Al-Shaaban (2013) claim that “despite of the country’s presence of charities, NGOS or profit based business, social entrepreneurship is still a very new concept that people are still grasping. Saudi society still lacks a clear view of social entrepreneurship as it is often linked with social responsibility and voluntary work.”
Social entrepreneurship has been a topic of academic inquiry for nearly 20 years, yet relatively little scholarly output has appeared in mainstream management and entrepreneurship journals. Review of this literature reveals that conceptual articles outnumber empirical studies, and empirical efforts often lack formal hypotheses and rigorous methods. These findings suggest that social entrepreneurship research remains in an embryonic state. It is still relatively new to Arab societies in the Middle East. Adapting the concept will facilitate transferring social entrepreneurship into real applications. Such a process involves challenges for policy makers and challenges business and social communities. At the academic level, social entrepreneurship has received more attention recently in the last two decades in the developed countries. On the other hand, not much academic concern has been given to social entrepreneurship in less developed countries, especially the Middle East and North Africa Region (Alsahlawi, 2011).
The adoption of social entrepreneurship by any organization in any location always succumbs to challenges. According to the theory of Diffusion of Innovations, organizations face more complex adoption possibilities because organizations are both the aggregate of its individuals and its own system with a set of procedures and norms (Greenhalgh et al., 2004). Three organizational characteristics match well with the individual characteristics above: tension for change (motivation and ability), innovation-system fit (compatibility), and assessment of the implications (observability). Organizations can feel pressured by a tension for change. If the organization’s situation is untenable, it will be motivated to adopt an innovation to change its fortunes. This tension often plays out among its individual members. Innovations that match the organization’s pre-existing system requires fewer coincidental changes and are easy to assess are more likely to be adopted (Gustafson et al., 2003).
The wider environment of the organization, often an industry, community, or economy, exerts pressures on the organization, too. Where an innovation is diffusing through the organization’s environment for any reason, the organization is more likely to adopt it (Meyer and Goes, 1988). Innovations that are intentionally spread, including by political mandate or directives, are also likely to diffuse quickly.
These theories discuss the influences of internal and external constraints in organizations which are apt to the current study on social entrepreneurship.
Theoretical and conceptual framework of the study
This study is anchored on Diffusion of Innovations Theory. In summing up the various literature as presented and discussed on entrepreneurship and social entrepreneurship also leads to the inclusion of “Contingency Theories”.
Theory of diffusion of innovations
This theory, which is popularized by Everett Rogers in 1962 is one of the anchors of the current research. It seeks to explain how, why, and at what rate new ideas and technology spread through cultures (Rogers, 2003). Rogers argues that diffusion is the process by which an innovation is communicated through certain channels over time among the participants in a social system. He proposes that four main elements as described in Table 1, influence the spread of a new idea.
Innovations are often adopted by organizations through two types of innovation-decisions: collective innovation decisions and authority innovation decisions. The collective decision occurs when adoption is by consensus. The authority decision occurs by adoption among very few individuals with high positions of power within an organization. Unlike the optional innovation decision process, these decision processes only occur within an organization or hierarchical group. Within an organization certain individuals are termed “champions” who stand behind an innovation and break through opposition. The champion plays a very similar role as the champion used within the efficiency business model Six Sigma. The process contains five stages that are slightly similar to the innovation-decision process that individuals undertake. These stages are: agenda-setting, matching, redefining/restructuring, clarifying and routinizing.
The innovation must be widely adopted in order to self-sustain. Within the rate of adoption, there is a point at which an innovation reaches critical mass. The categories of adopters are described in Table 2. Diffusion manifests itself in different ways in various cultures and fields and is highly subject to the type of adopters and innovation-decision process.
The diffusion of innovations according to Rogers. With successive groups of consumers adopting the new technology (shown in blue), its market share (yellow) will eventually reach the saturation level. In mathematics the S curve is known as the logistic function. The curve is broken into sections of adopters as shown in Fig. 1.
Wiio and Goldhaber (1993) concluded that differences in communication effectiveness are a function both of type of organization and composition of work force (age, sex, education, tenure). The communication process is influenced by many internal and external constraints from the organization and its subsystems. The constraints determine the status of the organization of the environmental suprasystem and the state of each subsystem. Some internal contingencies are: structural contingencies, output, and demographic, spatiotemporal and traditional contingencies. External contingencies are: economic, technological, legal, socio political cultural and environmental contingencies. Wiio, as quoted by Smith (1984) further stated that “In different organizational contingencies, different demographic variables showed significant relationships with communication variables”.
Figure 2 illustrates the context of Contingency Theories, the main focus of which are the target groups and stakeholders. The focus is akin to fostering entrepreneurship, particularly social entrepreneurship. The programs for entrepreneurship could hardly materialize unless they are deep rooted on vision goals, structure and culture. To be successful in implementing entrepreneurial activities, implementers should consider impliedly what they really want to achieve (message), resources needed, behavior and skills wanted, and the attributes that could create lasting impact (symbolism) with the beneficiaries.
This study is a descriptive-qualitative type of research. Descriptive research is used to obtain information concerning the current status of the phenomena to describe “what exists” with regard to variables or conditions in a situation (Key, 1997). The descriptive research tools utilized by the researchers are: online surveys, interviews with practitioners. The researcher used document analysis as a qualitative research method in order to verify the general concept of social entrepreneurship and the results from primary data collection. Document analysis is a systematic procedure for reviewing or evaluating documents both printed and electronic (computer-based and internet-transmitted) material. Like other analytical methods in qualitative research, document analysis requires that data be examined and interpreted in order to elicit meaning, gain understanding, and develop empirical knowledge. The qualitative research is a form of systematic empirical inquiry into meaning. Systematic refers to “planned, ordered and public,” following rules agreed upon by members of the qualitative research community. Empirical means to type of inquiry which is grounded in the world of experience. Inquiry means to understand how others make sense of their experience (Shank, 2002). Qualitative research involves an interpretive and naturalistic approach.
In this study, the researcher studied things in their natural settings, attempting to make sense of, or to interpret, phenomena in terms of the meanings people brings to them. Hence, the researcher make use of existing literature in order to verify their observations and come up with preliminary ideas regarding the research problem. The respondents of study consist of thirty (30) Saudi women social entrepreneurs and thirty (30) respondents from academia and stakeholders from government and private organizations who play important roles in promoting social entrepreneurship. They became the primary sources of data of the study. The interviews were scheduled as formal and informal using the research questionnaire designed specifically for this study as a tool for the exploration of the data.
The secondary data were gathered from “documentary-based secondary data, that refer to information collected from previous similar researchers which have also included primary data and have already been analyzed for their original intent” (Saunders et al., 2003). Secondary data were collected from diverse sources such as books, periodicals, government sources, regional publications, companies’ annual report, media and commercial sources (Zikmund, 2003). However, the major portion of the data consisting of secondary sources was collected through research journals, internet, magazines, records, and other relevant reading materials. The citation and literature discussion have been the prominent approach of this panoramic work.
In the lights of the literature discussed and data analysis, this research come up with the research framework adopting the input, process and output scheme. As it is shown in Fig. 3, inputs include the status of social entrepreneurship on social issues and key activities, challenges faced by woman social entrepreneurs and strategic measures in fostering social women entrepreneurship. In the paradigm, it shows collaboration between the women social entrepreneurs the academic institutions, government and private organizations responsible for promoting entrepreneurship. The data and information gathered through survey and documentary analysis from the said groups of respondents were analyzed and interpreted using weighted mean, frequency count, rank and percent. The output of the study provides a clear understanding on how and why social entrepreneurship activities are adopted and implemented to foster entrepreneurial minded and socially conscious women social entrepreneurs who could make the difference in the Kingdom of Saudi Arabia. The result of the study will serve as baseline information on women social entrepreneurs and of various stakeholders in the broader entrepreneurship ecosystem.
Results and discussion
The various findings on the research’s specific problem statements are discussed in this section of the study.
Social entrepreneurship activities prioritized by women social entrepreneurs in the Kingdom of Saudi Arabia
The leading service prioritized by women entrepreneur groups and individuals was 20 % on training and development through skills building. However, there are varied insights about training and development. This provides that training” is required to cover essential work-related skills, techniques and knowledge, and deals with taking a positive progressive approach about themselves as people.
The finding may emphasize that the women social entrepreneurs recognized the need for human capital development in Saudi Arabia. Human Capital is asserted to be the most important element of success in business today. Developing human capital requires creating and cultivating environments in which human beings can rapidly learn and apply new ideas, competencies, skills, behaviors and attitudes. By dealing with the activity, perhaps Saudi women are becoming more responsive to the needs of the labor market and creating an impact in the society through enterprise development. Martin and Osberg (2007) pointed out, social entrepreneurship is after sustainable solutions to societal problems and aims at social change. The change is a component for forging a new, stable equilibrium that releases trapped potential, ensuring a better future for the targeted group and even society at large. Further analysis reveals that the activities are primarily centered on skills trainings to less fortunate Saudi women in crafts, trades, sewing, embroidery, sales, computer software, design, and other forms of skills developmental activities. It can also be said that many Saudi women are now becoming more responsive to the needs of the labor market and creating an impact in the society through enterprise development. On employment services was 17 % are the second leading activity of social enterprise indicator brought forward by the study. A further interview, revealed that social entrepreneur’s respondent are actively engaged in providing employment services for Saudi women. Among them were facilitating the hiring of Saudi women and integrating them into the workforce, enable them to secure productive and sustainable employment.
Results of documentary research and analyses on that matter are worth mentioning in the part of the study. The following could serve valuable insights to the respondents and participants in this research study. The analysis also revealed that this kind of service is not only true to the Middle East but, throughout the world. In the other regions of the world, the same service is mostly implemented by the government through its Public Employment Service (Martínez, 1976). A public employment service is a government organization which matches employers to employees. It offers easy access to the labor market at local, national and international levels to all job-seekers, employers and companies specializing in staff recruitment. To this end, they provide comprehensive and detailed information on available jobs and job-seekers, and on related matters of interest. They also offer a wide range of active services to assist in job searches and staff recruitment.
Likewise, the basic mandate of Public Employment Service (PES) is to facilitate the adjustment of firms and workers to changing labor market conditions. PES is usually the primary government institution responsible for implementing a variety of active labor market programs. In times of economic crisis, the fundamental employment services of registering individuals for unemployment insurance (where it exists) and providing job search assistance to unemployed workers are intensified. PES may also be tasked with delivering special programs to assist displaced or retrenched workers, to support public works programs or to work with enterprises to access training services or adopt public support for work sharing and other means of averting mass layoffs. With the information on PES activities and mandates, it can be concluded that another interesting social service is the community awareness campaign was 14 %. It discloses that Saudi women social entrepreneurs have also led a number of pioneering efforts, especially in the health and environment. A number of women were working on creating awareness of women’s health issue a holistic lifestyle services and affordable programs which satisfy the requirements of the full spectrum of women’s health issues and the ways that science and technology be used to keep people healthy.
The findings further revealed that using interview and relevant documentary analysis also indicated that social entrepreneurs offer online awareness campaigns tackling environmental issues such as preserving the environment and encouraging and assisting businesses to go green. This activity is very much in alignment with contemporary issues on sustainability and sustainable development. Where, sustainability as the practice of maintaining processes of productivity indefinitely-natural or human made-by replacing resources used with resources of equal or greater value without degrading or endangering natural biotic systems. According to Hasna (2007), sustainability is a function of social, economic, technological and ecological themes. Sustainable development ties together concern for the carrying capacity of natural systems with the social, political, and economic challenges faced by humanity. As early as the 1970s, the concept of “sustainability” was employed to describe an economy “in equilibrium with basic ecological support systems.” Given the findings of the study, social entrepreneurs in Saudi Arabia were to be dealing in all the aspects.
The social services of business management consultancy, mentorship and other professional services was 11 % or ranked fourth. The order or ranking to where these services were put into by the respondents seemed to be logical. For, once major issues, such as: lack of training of manpower, putting beneficiaries into productive and gainful individual status and addressing issues of sustainable development, ample support services should follow. In strategic management, after the activity of strategic formulation and implementation, supports should then be formulated and implemented. And, they require multiple social services, the likes of networking opportunities between experienced, successful women in Saudi Arabia, strategic planning and design, market research, event planning, and integrating corporate environmental sustainability in every Saudi business. The findings can be taught by women in social enterprise development were aware of their actions on what, when and how to implement further support activities.
In effect, the cited support activities created value. It is also worth noting Porter and Kramer (2011) contentions of that” A big part of the problem lies with companies themselves, which remain trapped in an outdated approach to value creation that has emerged over the past few decades. They continue to view value creation narrowly, optimizing short-term financial performance in a bubble while missing the most important customer needs and ignoring the broader influences that determine their long-term success. How else could companies overlook the well-being of their customers, the depletion of natural resources vital to their businesses, the viability of key suppliers, or the economic distress of the communities in which they produce and sell? Government and civil society have often exacerbated the problem by attempting to address social weaknesses at the expense of business. The presumed trade-offs between economic efficiency and social progress has been institutionalized in decades of policy choices.” With the given context, the phrase “missing the most important customer needs and ignoring the broader influences that determine their long-term success” were seemed addressed by Saudi women social enterprises in the conduct of their social entrepreneurship activities.
Likewise, the result of the study could also mean that Saudi women’s social enterprises recognized value creation in the conduct of their social entrepreneurship activities. As advised by Hillstrom (n.d.), value creation is increasingly being recognized as a better management goal than strict financial measures of performance, many of which tend to place cost-cutting that produces short-term results ahead of investments that enhance long-term competitiveness and growth. As a result, some experts recommend making value creation the first priority for all employees and all company decisions. “If you put value creation first in the right way, your managers will know where and how to grow; they will deploy capital better than your competitors; and they will develop more talent than your competition,”.
Based on the findings, the provisions as cited, only 9 % of the social entrepreneur respondent activities were in community engagement such as promoting areas of Saudi Arabia that are often overlooked. A few women social entrepreneurs convene stakeholders in a framework of civil district councils and empower communities to reduce poverty.
The least or 7 % of the respondents implemented workshops as part of community awareness on environmental management, health care, skills and human development. Social entrepreneurs are catering to a broad range of beneficiary groups across the community. This activity is understood to be one of the support services and done in earlier stage, if necessary. The recipients of the social services are international and local Saudi businesses, Saudi women with special needs, young people, people with disabilities, families and the community in general.
From the various findings on prioritizing issues, it can be concluded that social entrepreneurship in Saudi Arabia is gaining momentum. From job and aid matching to sustainability, combating poverty to women”s empowerment, these startups are making a social change and empowering people throughout the region. They demonstrate a genuine commitment to their mission as well as a clear understanding of their individual challenges and support needs. Social entrepreneurship potentially plays a strong role in generating social inclusion benefits, community strengthening and positive impact in Saudi Arabia. Saudi women are taking the lead as change agents and innovators in the society.
Challenges faced by Saudi women social entrepreneurs in implementing social entrepreneurial activities
The emerging field of social entrepreneurship has been recognized as an effective tool for economic and social development. Just like other fields when becoming effective have to face issues and challenges in the environment where they belong and implement strategies to keep afloat in the industry. Saudi women social entrepreneurs were not spared from challenges special during starting-up phase. Some of these challenges were carried during scale-up and implementation of various entrepreneurial ventures. This study identified three major areas of concerns such as: financing, regulatory and technical.
Table 3 presents the respondents’ responses to the challenges they met along financing. Based on the summary of responses, the challenge topping the list is the reluctance of agencies to provide funds for women social entrepreneurs’ ventures with a mean rating of 4.08 or Agree. Gender issue cannot be dispelled by Saudi Arabia’s culture on treating women. Where, the majority of women belonging to the other strata of society is looked up to take care of children or do other domestic works. However, majority funding organizations have their standards to follow. For example, requesting organization’s credibility, experience, track records, structure, etc. It is also worth mentioning the reluctance factor to fund is rather in the desired outcomes of the projects. Or, the projects fall into what Omidyar and Skoll (n.d.) identified an unsatisfactory equilibrium in the inability of geographically based markets to optimize the interests of both buyers and sellers. Sellers typically didn’t know who the best buyer was and buyers typically didn’t know who the best (or any) seller was.
As a result, the market was not optimal for buyers or sellers. In this regards, the social entrepreneur groups might miss something when they tried to sell their ideas through programs or project. Unless the social entrepreneurship groups were borrowing from banks, then they can be treated as high financial risk borrowers. This is because the Saudi society and culture is not very keen on banks chasing women if they default on their debts. Social entrepreneurship is attracting growing amounts of talent, money, and attention. But along with its increasing popularity has come less certainty about what exactly a social entrepreneur is and does. As a result, social entrepreneurship has become so inclusive that it now has an immense tent into which all manner of socially beneficial activities fit. The foregoing statements by Martin and Osberg (2007) were aligned to a factor that challenged the respondents, “Social entrepreneurship ventures are still obscured and untried with a mean rating of 3.95 or Agree.
The result could be well-understood considering that many social entrepreneurs covered by the present study were emerging. They were founded from 2005–2011 only. What is worth mentioning is that a few of the social entrepreneur respondents started their venture as the results of their project while finishing their degrees at the University. On the other hand, several factors may be involved in the process for allocation of funds. Donor agencies have priority projects to fund with. Other agencies have allocated their funds for more vital activity needs like saving lives due to “Ebola” virus phenomenon, flood and other calamities destructions, rebuilding essential networks for war victim communities, etc. Perhaps, they are some reasons why there was none/less allocation of seed funds for non-profit ventures by GOs or PVOs (3.92). Since, the social entrepreneurship ventures are just emerging, it is well understood that the non-profit venture’s capital market are still in the infancy stage with a mean rating of 3.94 or Agree. Therefore, the status of social entrepreneurship ventures is still obscured and untried with a mean rating of 3.95 Agree.
On ownership and regulatory issues had a mean rating of 3.93 or Agree, this can be attributed to the structure of social entrepreneurship undertaking considering that some are structured as non-profits. Non-profit organization cannot offer an ownership stock in exchange for capital as compared with traditional business possesses. Similarly, ownership and regulatory issues bar non-profits from access to financing; they cannot issue equity or distribute profits.
With the finding above, the issue of Barringer and Ireland (2011) was confirmed by the present study that in general, start-ups often have difficulty raising money because they are unknown and untested. Founders often use their own money, try to secure grants, or go to friends or family for help. In some respects this inclusiveness could be a good opportunity. If plenty of resources are pouring into the social sector and if many causes that otherwise would not get sufficient funding now get support because they are regarded as social entrepreneurship, then it may be fine to have a loose definition and challenges.
In general, study’s finding that social entrepreneurship faced challenges in financing mechanism, whether it is a start-up or scale-up. Like any other businesses, this is the biggest challenge, because social enterprises exist in the space between traditional, grant-funded nonprofits and profit-maximizing businesses, they may have access to the funding options of both, but without the clearly defined methods and access of either. Besides, many social entrepreneurs rely on funding from international donors and note the difficulty of procuring funds for their core operations and actions from these presenters. Because funding tends to focus on short-term project financing, the sector’s ability to engage in long-term planning, develop self-sufficiency, and achieve larger impact is limited. Access to other sources of financing, such as repayable commercial loans from banks, remains a limited option for non-profit social enterprises. Social entrepreneurs that eventually become self-sustaining may never afford enough of a financial return to attract traditional backers or investors. As a consequence, a social entrepreneur’s task of raising financing poses unique challenges.
Along challenges brought about by regulatory restriction and framework, Table 4 presents the summary of responses on the challenges along regulatory framework and restrictions with an overall mean of 4.41 or Agree. A regulatory framework can have varying meanings, but it commonly pertains to tax information, necessary regulations and other important information, like relevant rules, laws and regulatory bodies. Regulatory frameworks are important tools for businesses, and other non-businesses as well, that are about to launch because these frameworks outline the measures of burden new businesses must be aware of when they begin to establish their enterprises. Needless to say businesses need regulatory frameworks for understanding the significant costs and procedures that must be followed. For instance, a regulatory framework may outline the stipulations a new business has to follow in order to be properly registered and to operate legally. The same is true to a new non-profit organization.
The summary of finding shows that gender specific obstacles was 4.54 or Strongly Agree, topped the list of items. It can be deduced that regardless of the types of entrepreneurial ventures, by being a woman in Saudi Arabia is a major challenge in realizing her aspirations towards entrepreneurial success. It can be accorded to the complexity of sustaining a healthy work-life balance as part of the socio-cultural norms of the country. These norms emphasize women’s role as wives and mothers as their primary responsibilities.
Similarly, restricted access to government services such as licensing, options and restrictive regulatory environments and bureaucratic procedures were both on the higher note (4.51- strongly agree). This finding may be an affirmation of the Saudi Arabian culture. Under Saudi law, all females must have a male guardian, typically a father, brother or husband (a mahram). Girls and women are forbidden from travelling, conducting official business, or undergoing certain medical procedures without permission from their male guardian (Arabian Gazette 2013). In addition, women continue to encounter a Wakeel (legal male representative) requirement when starting their businesses, as the enforcement of its removal is not consistent. Secondly, there is a legal requirement for a ‘Mudeer’ (male manager) for public-facing business. Despite its official repeal, many women are still required to appoint a male manager. Further, owing to restricted licensing options, a number of business activities that are popular among women, for example, home business, are not currently available in the official licensing categories. The driving ban on women in Saudi Arabia and the need for male guardian permission for international travel put women entrepreneurs at a significant disadvantage (Arabian Gazette, 2013). Moreover, most social enterprises in the region are legally registered as nonprofit organizations. Social entrepreneurs find themselves struggling with restrictive regulatory environments and bureaucratic procedures that often limit their ability to become sustainable or to scale up (Abdou et al., 2012).
Weak capacities to facilitate governmental procedures was 4.07 or Agree. The finding is due to gender-specific issues, political and social cultural norms. Citing the research findings of Women’s Entrepreneurship Initiative (WEI) and Ashridge Business School (2013), there are certain competencies that Saudi women lack which contribute to their inability to become successful within the entrepreneurial sector. Their key findings indicate that Saudi women entrepreneurs can present themselves as confident but often suffer from an underlying lack of self-belief evidenced by hesitancy in decision making, avoidance of commitment and a strong fear of judgment and failure.
Further, female entrepreneurs show courage in following their chosen career path, but are averse to assuming tangible risks, e.g., leaving the security and status of government jobs or seeking external funding for their businesses. The results of the survey also indicate a lack of self-reliance, self-sufficiency and personal initiative. Often, resulting from social restrictions imposed upon women. As proposed in the research of WEI, in the attempts to inculcate such change across the Kingdom, regulatory, educational and socio-cultural changes are urgently needed to promote women’s entrepreneurship. If greater entrepreneurial participation of women is desired, Saudi culture will need to adapt to help them develop the personal skills and qualities needed.
It is also worth mentioning the research findings of Lavelle and Al-Sheik (2013) in this part of the study that although a small but growing number of women in Saudi Arabia are actively challenging the status quo, further regulatory, educational and socio-cultural changes are urgently needed to promote women’s entrepreneurship and fully realize the economic and social aspirations of the Kingdom. Although Saudi women are more economically active than often perceived internationally and opportunities for economic participation are increasing, the report ‘Giving voice to women entrepreneurs in Saudi Arabia’ confirms women remain vastly underrepresented in the vital entrepreneurial sector. The Saudi Arabian government has committed to ambitious targets to enhance the economic activity of women and the opportunity for women to play a more prominent role in the Saudi economy has never been greater, with a comprehensive policy addressing women’s participation in the entrepreneurship sector pending. Currently, society is stifling rather than nurtures the development of women entrepreneurs in Saudi Arabia. Any policy designed to address the exclusion of women from the Saudi Arabian economy must address the socio-political and cultural factors that suppress female entrepreneurial spirit and capabilities (Lavelle and Al Sheikh, 2013).
Table 5 presents the challenges along technical support with an overall mean of 4.19 or Agree. The summary of the findings revealed that on knowledge on how to measure the social impact and effectiveness of social enterprise with a mean rating of 4.52 or strongly agree, was ranked first. This denotes that the respondents concur on how an organization, especially social entrepreneurship measures its success is important. Measuring and evaluating the social, environmental and economic impacts affecting the people, the communities and the environment for the better is significant, especially for the donor-stakeholders.
According to Boyd (2004), there are four elements needed to measure social value creation: inputs, outputs, outcomes and impacts. The inputs are the resources invested in order to make something happen. They are measured as a cost. Outputs are the direct result of the business objective or program goal, such as the number of people trained. The outcome is a change in people resulting from the activity such as increased income. The impact is equal to outcome less an estimate of what would have happened anyway. This poses a challenge to social entrepreneurs on how they will look at measuring social outputs and valuing social outcomes in monetary terms. Effective measurement of results and impact requires a combination of data and storytelling tailored appropriately to the organizations work and its goals. In an environment where mediocrity often trumps excellence and where money is not distributed competitively, it is important for any organizations to measure results accurately to distinguish and provide appropriate funding for those programs that are achieving change (Bornstein 2012).
The summary of findings further shows that integrating technological innovations in the business or non-business ranks second with a mean rating of 4.10 or Agree. This result is a clear manifestation that because of the unprecedented pace and breadth of technological change, social entrepreneurs’ regardless of the type of social ventures they are in have come to realize its strategic impact on all areas of the business and processes. Integrating technological innovation enables the organization to operate more efficiently and helps to increase the speed to market. Thereby, making an impact on the location they serve by communicating their innovation. Successful integration of technology innovation speeds up the process and drives further in reinforcing their competitive advantage.
The process of integrating technology innovation on business process creates much challenge on social entrepreneurship among women in Saudi Arabia. The indicator, finding and building a venture team, although the mean rating was 4.08 or Agree, the third indicates the vital role played by the team particularly with startups. Finding experts with a diverse background and experiences as a team is essential for any entrepreneurial ventures specifically for women in Saudi Arabia who are passionate about taking the challenge of indulging in social entrepreneurship. As Barringer and Ireland (2011) stressed, new ventures have a high propensity to fail. The high failure rate is due in part the liabilities of newness, which refers to the fact that new companies often falter because the people involved cannot adjust fast enough to their new roles and because the firm lacks a track record of success. Getting the right mix of people to complement and reinforce the early startup is essential. Having an effective venture team helps create a more efficient and capable social enterprise.
Finally, the aspect of support for management consultancy, legal counseling, marketing, financial, and enterprise planning and development complete the list of technical challenges. It can be inferred that trainings, coaching, mentoring and other programs along with the functional areas of entrepreneurship and social entrepreneurship implementation are pivotal to women entrepreneurs’ entrepreneurial in Saudi Arabia. To enable social entrepreneurs to flourish, wide-ranging collaborations with the private sector and a more evolved support sector are needed.
Along the afore-cited lines, AlMunajjed (2013) reported that in Saudi Arabia, Custodian of the Two Holy Mosques King Abdullah has earmarked $ 54.4 billion from the 2013 budget for education and training of young Saudi nationals. The Human Resource Development Fund provides funds for young entrepreneurs through banks and other financial sources; while the non-profit Centennial Fund supports youth entrepreneurship mainly in rural areas with loans and mentoring services for up to three years. More than 3,447 entrepreneurial projects have been managed by the Fund at a cost of $ 195.5 million in 180 towns and villages. The Saudi Arabian General Investment Authority launched the Saudi Fast Growth 100 to measure the fastest growing companies in the country within the smaller-sized corporate segment of the Saudi economy.
Saudi Aramco launched the initiative “Wa’ed” to encourage individuals to explore their entrepreneurial potential by providing expert guidance and tools to improve their business. The King Abdullah University for Science and Technology offers a program to support start-ups in technical fields and Queen Effat University launched a chair to encourage and train young Saudis to contribute in entrepreneurship. Bab Rizq Jameel helps generate employment opportunities for young men and women in Saudi Arabia by identifying job opportunities and providing training and grants and loans for entrepreneurial businesses.
Strategic management measures recommended by private and public sector to foster social entrepreneurship program sustainability
The social entrepreneurs are among a nation’s most innovative thinkers. They are entrepreneurs who develop creative solutions to help solve the problems that society faces. They are ideologues who stick to their vision and are concerned primarily with the transformation of society and the elimination of its problems. Several challenges were faced by the social entrepreneurs in Saudi Arabia. They were discussed accordingly in the preceding sections of this study. Surveys were done to generate strategic measures on how to mitigate, if not totally eliminate the challenges they face in implementing their programs and projects on a sustainable basis.
The EY G20 Barometer (2013) contended that although there have been a number of international studies on entrepreneurial ecosystems, there is still a need for better tools and data to help countries measure their performance on this issue. Anent the statement, this study utilized the results of the important contribution to this endeavor by capturing insights from key research initiatives.
The current study anchored the strategic measures to foster sustainable social entrepreneurship activities and practices set against five pillars, as co-developed with the G20 Young Entrepreneurs’ Alliance (YEA). They are: Access to funding, Entrepreneurship culture, Tax and regulation, Education and training and Coordinated support. In this study, the discussions concentrate on the top 5 indicators that were given the most importance by the respondents. Table 8 presents the summary of responses on access to funding measure. The table shows the strategic measures addressing access to funding problems. It is a given situation that whether an organization or individual is into business or social entrepreneurial activities it has to find out where the money is going to come from. For-profit companies, they get their money from investors and customers. However, non-profit companies rely on foundations, government grants, donors, and, in many cases, the people or communities they serve. Along the given premise, the women social entrepreneurs in Saudi Arabia had prioritized a measure requesting the government of the country to boost access to funding by 93 % or Rank 1. This measure is in consideration that the cited entrepreneurs had been the ally of the government towards the socio-economic development of the country.
In consideration of their sustained activities and long-term contribution to community development, social entrepreneurs to ensure that their capital source is the right one at the right time with 92 % or Rank 2. This perspective is an important strategic management decision. If the source of capitalization is not according to the terminology of the project objective and time, therefore there will be a mismatch resulting that towards the final stage of implementation, capital is already taken back by the funder. Or, the flexibility of the fund uses will be absent.
To further the accessibility of funding, and to for the social entrepreneurs to have continuity of resources, it is suggested that corporate business enterprises to do business with social entrepreneurs with 87 % or Rank 3. Doing business denotes many aspects. It could be that business patronize the products of the beneficiaries of their do outsourcing activities the social entrepreneurs.
On the other hand, provision of the budget by the government is not a guarantee of success. Recipients should be provided further with much needed mentorship, technical services and others with 85 % or Rank 4. It can be said that many organizations face the challenge of developing greater confidence, initiative, solutions-finding, and problem-solving capabilities among their people. They all fall under mentorship. Linking mentoring with objectives and project tasks or activities is a highly productive and effective modern method of training and developing people in organizations. However, conducting further study of the entrepreneurship should start from the country’s governance. The present researcher emphasized that entrepreneurship course must be given preferential attention of the Saudi government in collaboration of the Ministry of Higher Education (MoHE) and integrate into the business curriculum as an elective subject.
Hence, the respondents recommended for the government to conduct a self-assessment of social entrepreneurial landscape in the country with 83 % or Rank 5. Knowledge of the needs of the various sectors is must if the country’s governance intends to execute an effective measure towards fostering the needed development of the people.
Lawton (n.d.) wrote that culture is a hot buzzword among corporate and entrepreneurial companies alike. She further commented that it’s what everyone is striving for, what brings on the loyalty, what attracts and keeps the really awesome employees. She advised that if done right, it seems so simple, but good corporate culture, in its purest sense and at its most successful, has the look and feel of something organic and uncontrived, something that just exists. But alas, there’s the rub, and at once the wonderful twist: Corporate culture cannot, does not and never will exist “just because.” Culture is a balancing act between many elements of a company and requires careful execution at each level. This is especially true for entrepreneurial companies, where corporate culture must be led, nurtured, constantly monitored and adjusted.
Table 7 presents the strategic measures recommended towards fostering social entrepreneurship in the Kingdom of Saudi Arabia along entrepreneurship culture. These are the suggested measures of the respondents along the need to build entrepreneurship culture. The same culture is not only on aspects of economic but social as well. Topping the list of measures is the recommendation for concerned government and private agencies to create more networking opportunities for social entrepreneurship in the country was rated 93 % or Rank 1. Networking is interacting with others to exchange information and develop professional or social contacts.
The purpose of which is to create a group of acquaintances and associates and keeping it active through regular communication for mutual benefit. In business, networking is leveraging business and personal connections to bring the company a regular supply of new business. Business or otherwise, networking involves relationship building, which can be a deceptively complex process. Social entrepreneurship practitioners usually need this particular skill. For, the life blood of the activity depends on the grants or donations of others. If networking is absent, the continuity of the social entrepreneurship activities might suffer.
Recognizing the role of social entrepreneurs in fostering social development, it was also recommended that the governments to promote the power and value of social entrepreneurship as an allied engine of economic growth was rated 92 % or Rank 2. This is in consideration that all entrepreneurial fields require great discipline to survive, innovate and be productive. In this regards, they should be properly motivated. Perhaps this is the reason why concerned government and private agencies to assist well-deserving implementers showcase their success was rated 90 % or Rank 3. Showcasing is marketing and marketing is selling. People buy or support those organizations whose undertakings have known results and positive outcomes. In any developmental activities, not all players are given much attention or opportunities. Opportunity is the key for an individual to shine in his chosen field of endeavor. Perhaps the respondents took this line as an important instrument in their crafting of a particular recommendation that concerned government and private agencies also need to open the door for excluded talent was rated 88 % respectively.
On regulatory framework aspect, taxation and regulations are two of the most influential considerations for a venture to succeed. Access to funding is the most important area where improvements would help entrepreneurs succeed, according to the entrepreneurs’ surveyed. With the right policies, governments can help enable a more diverse mix of funding options. Table 8 presents the summary of responses along taxation and regulations strategic measures. The respondents greatly recognized and advised that social entrepreneurs should use whatever tax simplification methods available to improve cash flow and decrease compliance costs associated with paying taxes was rated 95 % or Rank 1. All enterprises need a better cash flow for obvious reasons. The measure can assist them deter the risk of non-continuance of program operations.
Research and Development strategy leads to better creation of innovative product or service. It also provides well-studied courses of actions to improve operations and establish a better corporate culture. Perhaps, they were some of the reasons why the respondents included the measure that social entrepreneurs must explore government resources for them to know their research and development (R&D) incentives. After which, implementing innovation could take effect and provide better results of action. Stimulating innovation was rated 88 % or Rank 3, which is not the sole responsibility of the entrepreneur especially the social entrepreneurs. It is an obligation that calls for concerted efforts by the government and its private stakeholders. With innovation stimulated, government can create a range of mechanisms and institutions that provide all types of entrepreneurs with the capital they need to support their businesses at every stage of the growth journey to follow through the emerging and rapidly-growth of the social enterprise industry.
Simplifying the tax system was rated 87 %, which may reduce the indirect tax burden was rated 85 % of all types of entrepreneurs. As all classes of entrepreneurial businesses and ventures grow and develop, the sources of finance rely on all chances and changes they could take advantage of. That is why all sectors of the industry need to cooperate. Given the situation, recognizing the merit of the measure for government and private corporations to assist towards driving the change of the tax system is important.
Hence, entrepreneurs provide one of the main engines of growth in any healthy economy. They act as vital agents of change by developing new products and services, implementing more efficient production methods, and creating new business models and industries. They generate jobs, support local communities and build prosperous societies. However, before they can do so, entrepreneurs of all classes should become ready and possess the most required knowledge and develop the skills necessary to become effective. Hence, the need for their knowledge and training’s further development.
Table 9 shows the summary of responses on strategic measures for education and training of social entrepreneurs’ development. Effective education can help economies thrive and allow entrepreneurs to become true drivers of future employment and growth. Although countries make significant educational investments, they are not always the educational options that foster entrepreneurship. Along this premise, perhaps the respondents of the current study recognized the importance for the Government of embedded entrepreneurial learning and social entrepreneurship in the school curriculum was rated 93 % and to support young people who chose social entrepreneurship as their career was rated 93 %. The need for developing an integrated approach is a must. For at university, science and technology students with innovative ideas are often separate from the business students who could commercialize them. Programs should help target a multidisciplinary approach and create support for the entrepreneurial ideas that emerge.
The above findings confirmed that entrepreneurs are made not born. Researches disclosed that more than four out of five entrepreneurs believe that entrepreneurial skills can and should be taught. Schools therefore, have an important role to play in equipping the potential entrepreneurs with the right skills and attitudes. Correspondingly, policy-makers and curriculum planners of the Ministry of Higher Education need to encourage the administrators of the colleges and universities in Saudi Arabia to bring in role models and set up games and competitions. This gives students the chance to find out what it is like to run a business. Teaching entrepreneurship benefits from a more hands-on approach than with traditional academic subjects.
Seeking knowledge and developing skills know no boundaries. They can be done formally or informally. As many researchers and businessmen alike would quip that experience is the best teacher, respondents of this study recognized the value of it and recommended to other social entrepreneurs to seek out and learn from other classes of entrepreneurs was rated 90 %. Perhaps, they were inspired also of the great importance of informal ways and this led them to provide a measure that the government should encourage lifelong learning for all classes of entrepreneurs. Citing again E & Y (2013), it disclosed that their research have shown that, although countries make significant educational investments, they are not always the educational options that foster entrepreneurship. For this reason, the current respondents also called for private and public corporations to expand internship programs to social entrepreneurs to provide more hands-on experience was rated 87 %. With these given situations, encouraging lifelong learning for entrepreneurs would greatly help them realize the need to learn a whole range of management and business and social development skills as they grow their respective social and business ventures. It is worth mentioning in this part of the study the various contentions of G20 YEA for education and training’s component. They said that traditional schooling aims to prepare employees, rather than creative entrepreneurs. As a result, the more successful traditional schooling is, the more it stifles creativity and the entrepreneurial spirit. It was recommended that policymakers need to encourage schools to bring in role models and set up games and competitions. This gives students the chance to find out what it is like to run a business of teaching entrepreneurship benefits from a more hands-on approach than with traditional academic subjects (E & Y, 2013).
A coordinated support creates the foundation for entrepreneurial success. And, a robust ecosystem for entrepreneurship fosters strong links between the public, private and voluntary sectors. Diverse stakeholders, including universities and research laboratories, business incubators, non-governmental organizations, investors and existing entrepreneurs, must coordinate support. The challenge is to ensure that these disparate stakeholders are better orchestrated for maximum effect. In Table 10, the summary of respondents’ responses on strategic measures recommended towards fostering social entrepreneurship in the Kingdom of Saudi Arabia along support coordination is presented.
Many G20 countries, including KSA have high-profile projects to create clusters of entrepreneurial activity. There is an array of tools that can help create an environment in which entrepreneurial businesses can thrive. These tools range from local economic incentives to business parks that provide plug-and-play infrastructure combined with mentoring and advisory services (YEA, 2013). Cognizant to the given scenarios, perhaps the social enterprises’ implementers who were respondents of this study adhered to the advantages and chose the indicator calling social enterprise promoters and implementers to cluster the right kind of support to social entrepreneurs for them to thrive effectively was rated 92 % or Rank 1. It can be observed from the summary of responses that fostering social entrepreneurship requires major collaboration between three different sectors encompassing the total ecosystem of a social enterprise.
This sector includes academic institutions, government and private sectors. Each sector plays a significant role in addressing issues and designing strategies in order to foster social entrepreneurship towards empowering young minds. Strong collaboration among the three sectors stimulate the proliferation of young people involve in the social entrepreneurship endeavor. Concerted effort is a key towards solidarity and therefore could lead to a successful venture. Given that, the respondents have chosen a strategic measure that calls for social enterprise promoters to champion social entrepreneurship with united thinking was rated 88 % or Rank 2. Such is relevant to “developing entrepreneurial culture and mindset”. The finding implies that entrepreneurship stems from a culture where innovations and creativity are highly encouraged across all levels of the education system. The academic institution must establish a culture that is tolerant of new ideas, accepts some risk and encourages the young minds to “think outside the box”, in view of the fact that idea generation and opportunity identification flow of culture. Entrepreneurship education can, from a young age awaken the entrepreneurial spirit and can foster a positive attitude towards independence, risk-taking and learning from failure (Kavanagh et al. 2012).
Based on the Gender-GEDI Executive Report (2013) attitudes also play a crucial role in forming opinions that create a country’s “entrepreneurial culture”, meaning how the general population views entrepreneurial endeavors, risk assessment, and acceptance of business ownership as a viable career option. This cultural environment in turn influences individual opportunity recognition and willingness to take the risk to start a new venture. In consonance to the given explanations cited above, the respondents thought of the following strategic measures where social entrepreneurs to give back to the community their talents and expertise was rated 87 %. On social enterprises to promote business incubators with social entrepreneurs for them to play a pivotal role, and social entrepreneurs capitalize on networking and collaboration was rated 83 %.
The government is responsible also for the success of the ventures and related activities of social entrepreneurs in the country. With this, the respondents brought forward a strategic measure that calls for it to create clusters to accelerate social entrepreneurship nationally was rated 85 %. According to Princess Loulwa Al-Faisal, adaptability, communication, cooperation, critical thinking, readiness to lead, not just to follow, and an acceptance of risk, are fundamental attributes to an entrepreneurial mind-set towards united thinking. This means that throughout the whole span of a young person’s education, it is now an imperative responsibility and a challenge among educational sector and the government to encourage an entrepreneurial mindset as an essential attribute to develop the young minds.
Social entrepreneurship is also influenced to the extent as to what degree the government sector creates an enabling environment to foster social entrepreneurship. An enabling environment that includes a combination of awareness, policies, legislation, infrastructure and incentive structure aiming at creating institutional and organizational capacity building in promoting social entrepreneurship, both at the government, institutional and individual level (Mori and Fulgence 2009).
The report made by Abdou, et al. (n.d) on social entrepreneurship in the Middle East expound that government can be a catalyst in energizing other components of the ecosystem needed for social entrepreneurship to thrive in education, through the public schooling system and education policy; the media, through state-sponsored marketing and advertising; and private and social investors, through legal frameworks and market regulations. Government can play an active role in fostering social enterprises by bringing together key stakeholders via local and national coordination bodies. Moreover, through its convening power, the government can grant social entrepreneurs and other key players in the sector access other policy-makers, thus fostering a participatory approach to policy development.
According to Gender-GEDI Executive (2013) removing legal and regulatory impediments to growth is a necessary condition for a vibrant entrepreneurial economy. Social norms are a frequently-hidden barrier: lifting the cultural veil that can restrict a woman’s entrepreneurial vision is critical to unleashing the female entrepreneurial potential. As to incubation and acceleration process, the government and private sector’s involvement in providing a supportive environment and infrastructure is crucial in fostering social entrepreneurship among young women in Saudi Arabia. Referring to the indicator, “Government to support and improve incubators and accelerators was rated 75 %, supporting incubators and SEED Funds leads to fostering social entrepreneurship through business incubation and SEED fund strategies nurture the development and growth of new and emerging social enterprise.
The funding agency also tackles the challenges on technical assistance faced by Saudi women social entrepreneurs. It can be inferred that this strategy not only increase women’s economic activity as employees, but empowering young women in Saudi Arabia as entrepreneurs, as employers and drivers of growth through social entrepreneurship.
Social entrepreneurship is attracting a new generation of leaders, a lot of them young. A lot of them passionate and full of energy. A lot of them want to make a difference in the society. The women social entrepreneurs in the Kingdom of Saudi Arabia are able individuals and groups who possessed knowledge and skills on how to prioritize their needs according to the ventures they implement. From the various findings on prioritizing issues, it can be surmised that social entrepreneurship in Saudi Arabia is gaining momentum. From job and aid matching to sustainability, combating poverty to women’s empowerment, these startups are making a social change and empowering people throughout the region. They demonstrate a genuine commitment to their mission as well as clear understanding of their individual challenges and support needs. Social entrepreneurship is playing a strong role in generating social inclusion benefits, community strengthening and positive impact in Saudi Arabia. The country’s women social entrepreneurs were not spared from challenges specially during starting-up phase. Some of these challenges were carried during scale-up and implementation of various entrepreneurial ventures.
Embedding social entrepreneurship within entrepreneurship education activities in schools, universities, vocational education and training and in non-formal education or across a number of disciplines and subjects, helping students develop the necessary skills to succeed in both business and social sphere are ways to foster social entrepreneurship. Both public and private agencies should promote and support the start-up social enterprises in overcoming challenges along finance, support services and regulatory frameworks to motivate the youth and emerging women social entrepreneurs to continue their various social programs and projects sustainably. There is a needs for government and private sectors to collaborate towards strengthening the entire ecosystem for social entrepreneurship considering the challenges faced by Saudi women in starting and scaling their social enterprise activities and implementation. The government, educators and corporate private organizations should consider reckoning and implementing the strategic measures identified by the study to foster and sustain the social entrepreneurship ventures of various enterprises on a sustainable basis.
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The author declare that she has no competing interests.
Survey questionnaire on social women entrepreneurship in the Kingdom of Saudi Arabia. (Set A - For Social Women Entrepreneurs).
Survey questionnaire on social women entrepreneurship in the Kingdom of Saudi Arabia. (Set B – Government and Private Sectors Representatives).
About this article
- Social entrepreneurship
- Women entrepreneur
- Access to funding
- Entrepreneurship culture
- Tax and regulation
- Education and training and coordinated support