Hard times create right climate for new entrepreneurs

Tala al Ramahi

• Last Updated: April 25. 2009 12:39AM UAE / April 24. 2009 8:39PM GMT

ABU DHABI // Businesses and jobs may have disappeared, but the economic downturn could be the perfect breeding ground for future entrepreneurs, according to experts.

The young businessmen and women emerging in the UAE, however, need to assess the market and make wise choices when it comes to deciding what type of venture to start.

Dr Ahmed al Mutawa, chief executive of the Khalifa Fund to Support and Develop Small & Medium Enterprises, said while its ability to fund applicants had not been affected by the financial crisis, the fund had, nevertheless, become more selective.

Tourism and construction-related businesses were on hold, for example, while “easy money” businesses were off the table.

“We are not interested in financing buy-and-lease activities, or import and sale activities,” he insisted. “Anyone can go and get a franchise, but that is not what entrepreneurship is about.”

Entrepreneurs, said Dr Dale Murphy, director of the Entrepreneurship Programme and a senior research fellow at the Dubai School of Government, were people who could scan the environment and see an opportunity. “Entrepreneurship is much more flexible than large firms and government bureaucracies. Because small businesses are flexible, if one procedure isn’t working, then you can change it easily. It is easier to adapt with rapid change this way.”

Dr Murphy urged policymakers and businessmen to capitalise on the situation.

“The flip side of the corporate layoffs is that experienced workers are now available for entrepreneurs to hire, partner with or seek funding from.

“The great thing about entrepreneurs is that they create a flexible, diversified economy that can keep up with the changing times.”

Nemah al Kuthairy, 27, seems to have judged the climate perfectly, going into confectionery. Economists believe small pleasures during harsh economic times do not break the bank and make consumers feel good.

She started My Chocolate, a factory and retail business, almost two years ago and is in the process of setting up a third outlet in Abu Dhabi. She also supplies the Chamber of Commerce and Industry, Adnoc group, and gets orders from as far afield as Ras al Khaimah.

Abdulla al Shaiba has a challenge to get his consultancy and training business taken seriously by prospective corporate clients. “Companies here are not used to the idea of satisfaction surveys, and receiving training advice from an Emirati,” he said.

His business carries out customer surveys and conducts studies such as the Entrepreneurship Profiles Index, an international standard test that gauges the likelihood of a prospective business being a success.

Mr al Shaiba has established a working partnership with People Matrix Group, a Melbourne-based training organisation, to bring in coaches who offer training in areas such as event management and hospitality.

Educating young people about setting up their own businesses is another area that needs attention, according to experts.

Dr Murphy said it was the ideal time to capitalise on the region’s “youth bulge” because many young people were “cosmopolitan, educated and globalised” and could play an “instrumental role in pushing forward an entrepreneurial mindset in society”.

Exposure to entrepreneurship was valuable, he added, in that it gave young Emiratis “role models who are young and exciting people who are creating something new, not boring financial businessmen”.

Both Dr al Mutawa and Dr Murphy argue that fostering the kind of creative energy necessary for entrepreneurship must begin in school, and Dr al Mutawa said the Khalifa Fund was in the process of establishing secondary school and university programmes that would enable students to engage in hands-on experience with entrepreneurship, and encourage more Emiratis to look beyond standard office jobs and professions.

Dr Murphy said: “Good teachers must be given the authority to modify the curriculum to fit their students’ creative needs, and to challenge them intellectually.”

In addition to learning to think creatively, young people also had to develop “a thick skin” and get used to having their ideas shot down.

“The least helpful advice you can give to a potential entrepreneur is to tell him, ‘That’s a great idea’,” he said.

“Young people are indoctrinated from a young age. We ask them all the time who they are going to work for. This must change. They must want to think about who would they want working for them.”

Dr Murphy, who taught entrepreneurship at Georgetown University in Washington and believes he knows what makes the younger generation think beyond the 7am -to-3pm government job, offered this advice: “Start by telling students to look carefully in the mirror – let them ask themselves what really motivates them, what they talk about late at night with their friends. When you do identify that passion, and then spend long hours doing what you really want, it’s not a job any more.”

talramahi@thenational.ae