Riyadh: Evolving to Become as One of the MENA Region’s Key Entrepreneurial Ecosystems

Abstract

Riyadh’s entrepreneurial ecosystem is one of the most important drivers of entrepreneurship and innovation in the MENA region, as Saudi Arabia aims to achieve economic diversification within its industry, and thus reduce its dependence on oil. This paper analyzes how Riyadh’s entrepreneurial ecosystem is achieving these goals and explores the differences between entrepreneurs and owner-managers operating in the Riyadh ecosystem to identify their strengths and weaknesses in guiding Saudi policymakers’ decision-making. Using GEM data for Saudi Arabia and analyzing the ten pillars (connectivity, leadership, knowledge, talent, finance, culture, formal institutions, services and intermediaries, physical infrastructure, and demand) of the Stem model, the authors applied ANOVA tests for the quantitative variables and Chi-squared tests for the qualitative variables and rescaled the results to 0–10-point scales for ease of interpretation. We found that among the ten pillars studied, there were four that have improved the most in the Riyadh entrepreneurial ecosystem: two systemic (networks, talent) and two environmental (physical infrastructure and formal institutions), while it was in the systemic pillars (leadership, financing, and knowledge) where the least progress has been made in the period 2019–2022.