Supreme Economic Council
Meanwhile, the graphical illustration below clearly shows the “informal contribution” of SMEs through the incurrence of employment and GDPs of low income, medium income and higher income countries: Source: Ayyagari, et al. , 2005 It may be analyzed that the same representation of SMEs as “informal enterprise” may undeniably be of social value. The relevance of employment and GDP growth as found in 76 countries may as well validate the situational endeavors of the small business entrepreneurs in Saudi Arabia.
The converging factor in the existence of SMEs is inspired by the requirement of industries [represented by the formal e...
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...nterprises or multi-national firms] and the converging need of the labor forces to nationalize the production, supply and consumption of goods, thus, creating social equitability in the utilization of economic resources. Finally, the illustration below shows the listing of 2005 data composing the 76 countries that achieved the size or quantified employment and GDP shares, relevant to the establishment or existing economic activities of the SMEs:
Source: Ayyagari, et al. , 2005 In summary, SMEs acknowledges the global convergence of entrepreneurship that is vital to propel a domestic economy, reconfiguring the economic structure of interdependence and value of self-reliance and self-sufficiency. Like the vision of small business entrepreneurs in Saudi Arabia, the restructuring of its domestic economy rely on the capability of its population by supporting the remerging values of every Saudis to harness the efforts for nationalization of its economic structure. Data analysis
The literature review has found the relevance of theories on enterprise development as a general premise in the primary objective of this paper is to probe and prove how the conceptual model of Small-Medium Enterprises (SMEs) can transform an entrepreneurial economic sector, and specifically focuses on how the transformation process shall evolve. In this section, the analysis of data will relate the integration of governmental and non-governmental system, and the stakeholder as well, validating the creation of an economic sector envisioned to build the entrepreneurial capabilities of SMEs in Saudi Arabia.
The Saudi Committee for Development of International Trade (SCDIT) has initiated a policy proposal on privatization of semi-government or government-owned and controlled corporations that are having private equities or stocks. The privatization is encouraged by the situation that a more advantageous private investors from the local business communities are proposed as one of the primary stakeholders and benefactors. As cited from the SCDIT 2002 data, it was announced that among of the targeted entities for privatization is shown in the figure below: Source: SCDIT, 2005
It may be perceived that the privatization of government assets recognizes the capability of the private sector to manage or administer the implementation. However, the government must look into the matter how the process of privatization would tangibly and viably managed by the stakeholder. It is also important fro the government to provide a guideline in the privatization process, identifying the character of the stakeholder and classifying the efficiency, effectiveness and scope of services it may render upon the transference of management for implementation.
In favor of the private sector, representing the small business entrepreneurs, the SCDIT program of structural reforms could be an offer for opportunity, but the management skills in managing the privatized government firms would still need the government’s intervention in order to ensure the viable process of managing. While the Saudi Arabia government promotes domestic or interstate business opportunities through investments in privatized government assets, it relates foreign economic trade and relationship on intrastate commerce.
Hence, the Saudi Arabian government promotes the “ventilation” of foreign economic doorways for investment opportunities. One of the foreign agencies of Saudi Arabia that advocates the foreign investments is its Royal Embassies in selective countries. The promotion of investment opportunities in a domestically privatized government function, services and utilities may encourage a new genre of foreign investment if not totally serious in dealing with the domestic or local private business groups. Thus, this is indicative of the proposed SCDIT privatization program.
It may be reflected that the 2002 privatization of government functions; services and utilities, may as well ripple development and progress in the private sector. However, the possible dysfunction of organization may occur upon the participation of foreign counterparts. One of the dysfunctions could be the effects of socio-cultural diversity in terms of implementing guidelines that is partly foreign and not a domestically acquired service. Another consideration is the effect of conflict of interest in the sharing of capital and profit.
The revalidated data has recently indicated that government structural reforms favors and recognizes the participative role of the private sector in Saudi Arabia, specifically the small business entrepreneurs effective of nationalizing a domestic economy. In response to the proposed 2002 privatization schemes, major government agencies have been created for “easement of interstate policy”, to cite as follows (SCDIT, 2005): • Creation of the Supreme Economic Council (SEC) – evaluate economic policies, advancement, and efficiency.
– administer economic reform focused at creating domestic market and attract entrepreneurial investment; – harmonize macro-economic policies • Creation of the Supreme Commission of Tourism (SCT) promote and administer tourism investment; • Creation of the Saudi Arabia General Investment Authority (SAGIA) to provide the domestic business community with accessible acquirement of business permits and licenses, and provide linkage between the local financial investors and the government • Creation of the Human Resources Development Fund (HRDF)
– provide support to various undertaking that involve development-training of diverse and special skills, and facilitate employment of the locally generated workforce in the private sector; – contribute to the expenditure of domestic workforce through integration of “on-the-job training” in the private sector; – allocate funds to community-based programs, projects, and studies; – establish the Communication and Information Technology Commission (CITC) to manage and enable high quality international telecommunication and information technology services that is domestically affordable to all.