Wa’ed Program in Saudi Arabia
Also referred to as Wa’ed, the Saudi Aramco Entrepreneurship Center, is an initiative of Saudi Aramco that was launched in 2012 to spearhead the development of local entrepreneurs. The program was created with the aim of sponsoring and growing new enterprises in Saudi Arabia. As part of the program of Saudi Arabia, Wa’ed is a Limited Liability Company (LLC) that is geared towards diversifying the economy, commercialize intellectual property rights and patents, and even establish opportunities in the private sector (Waed.net, 2013). Part of the objectives of Wa’ed was to spread the entrepreneurial culture in Saudi Arabia, create new job opportunities, as well as promote growth, innovation and development of the national economy of Saudi Arabia. It is expected that if this program is successful, it will encourage the youths in Saudi Arabia to develop innovative and creative ideas, and enlist the support of Wa’ed in developing business plans as well as securing capital for their businesses and ideas. Through competences and resources from the outcome of the early projects, the program has been reinvesting in new projects and this trend is expected to continue. Ultimately, the program will help to improve entrepreneurship in the Kingdom of Saudi Arabia. The main targets of Wa’ed program are the small and medium-sized enterprises as well as the impact entrepreneurs and all of these groups have been able to access non-collateralized loans and equity financing through the program’s venture capital.The main objective of the program is to enhance sustainable growth of both the small and medium enterprises, in addition to expanding the pool of entrepreneurs who can establish the entrepreneurial ecosystem in Saudi Arabia.
Among the major industries that Wa’ed offers support to are the Information and Communication Technology, and education. In education, there is a special focus on the programs that offer exceptional educational opportunities. In addition to ICT and education, Wa’ed also offers support to entrepreneurs within the healthcare, chemicals, supply chain & logistics, manufacturing, and energy related products and services, as well as those that are engaged in unique Industrial Opportunities. Wa’ed takes into consideration both small and medium business with the potential to contribute to the economy of Saudi Arabia and also create employment opportunities. Some of the selection criteria that the program considers when looking for businesses to fund include:
- Value addition products and services that provide patented and innovative solutions
- Competition enhancing businesses in the unsaturated sectors
- Enterprises that create employment and offer superior employment opportunities for the Saudi people
- Enterprises that are not dependent on imports but can possibly export products or services
Wa’ed also offers training programs and these are designed in a manner that facilitates effective transfer of knowledge to entrepreneurs, especially with regards to the skills need in planning a business effectively. One of the procedures of the Wa’ed program entails going through the prequalification process to gauge whether the business plans submitted by the entrepreneurs meet the requirements stated above(Saudiaramco, 2013). In cases where the business plan has gaps and therefore needs additional development, the entrepreneur will be invited to take part in the Wa’ed training program for business skills and business plan development. The training program which is usually organized every month, lasts for five days. The training is divided into two parts and the first three days cover theoretical under which entrepreneurs are trained on managing risks, forming business plans, assessing industry, segmenting the market, analyzing their competitors, evaluating the breakeven , assessing their cash flows, legal aspects, as well as organization skills. The second part of the training is covered in the last two days, and it entails a practical application of the acquired knowledge by the entrepreneurs. During the practicals, the participants are guided and supported by the training team as they begin formulating new business plans. The Wa’ed training programs are usually carried out in different locations including Jeddah, Riyadh, and Dammam (Saudiaramco, 2013).
One of the main achievements of the program is that it has helped to reduce aversion to risk which was initially highly predominant among Saudi youths. In the past, many talented graduates in the kingdom often sought secure employment opportunities in the big corporations seeking secure employment but through the Wa’ed program business incubator, which is known as the Wa’ed Startup Lab at theKing Fahd University of Petroleum and Minerals, the country has significantly addressed the challenge of risk-aversion that had been obstructing entrepreneurship in the Kingdom. August 2013 saw the Wa’ed Startup Lab initiate a pioneer program which was called the CO-OP to Entrepreneur and facilitates business ventures by groups of senior university students who possess innovative ideas as part of their collegeprogram (Wamda, 2013).This initiative has facilitated the creation of an environment where start-up ventures thrive and avoid failure.
In addition, Wa’ed has attracted significant support from experienced mentors and companies, including Microsoft that provides technical support. The program also offers entrepreneurs a platform through which they can access significant networking opportunities with best players in their respective fields (Wamda, 2013). Furthermore, the Wa’ed program has incorporated numerous long-term benefits that include using a bottom-up approach in promoting entrepreneurship, providing unmatched internship experience, and developing potentially successful firms and all these will inevitably ensure the success of the kingdom in diversifying its economy and boosting employment opportunities. Despite the fact that the Wa’ed Startup Lab currently facilitates and supports each of the six student-initiated startups at King Fahd University of Petroleum and Minerals, there are plans underway to expand the program and roll out start-up programs in all Universities in the kingdom in order to facilitate the business incubation program and creation of employment in all parts of the kingdom. Moreover, Wa’ed also intends to establish a vibrant global network entrepreneur network under which the entrepreneurs will share, grow, and learn from one another. Finally, the wide array of support services that Wa’ed offers, also contributes to the Saudi economy, in terms of equity and debt financing, business mentorship, and development training, as well as high quality business incubation which has continually helped to foster entrepreneurship across the Kingdom.
The fact that the Wa’ed program excludes some sectors of the economy from its support and overall program is a major shortcoming. Specifically, entrepreneurs that are automatically disqualified from the program and obtaining support include those in trading businesses, general construction contractors, retail shops, general hospitality industry, automobile repair and maintenance businesses, not for profit organizations, and tailoring and fashion related businesses.
Comparison between Wa’ed Program and the Khalifa Fund in the UAE
Similar to the Wa’ed Program, the Khalifa Fund in the United Arab Emirates is another initiative that was launched in 2007 and was aimed at assisting the local entrepreneurs in Abu Dhabi with a capital outlay of AED 2 billion (Khalifafund, 2013). Khalifa Fund is similar to the Wa’ed Program because it aims at developing a new generation of entrepreneurs in the UAE through the creation and sustenance of an investment culture among the youths. Additionally the Fund also intends to support and establish SMEs in the Emirate by offering financing for debts. Nevertheless, the Khalifa Fund differs from the Wa’ed Program because its support is not limited to start-ups only, but also extends to business expansion as well. Apart from the training and development support, the Khalifa Fund also provides data and consultation services, as well as a range of marketing initiatives. The Khalifa Fund is also different from the Wa’ed Program because it does not just provide one type of loan, and instead offers three financing initiatives which include Zeyada (expansion loans), Khutwa (Micro-Finance), Bedaya (start up loans) and Tasnea which funds both industrial and economic diversification. Furthermore,Khalifa Fund supports all feasible projects that contribute to economic growth and this is the opposite of the Wa’ed Program that restricts its support to particular sectors of the economy. The Khalifa Fund is also known for its provision of support to special interest groups through diverse programs, such as those that target the Emiratis with special needs, like Amal; those that support inmates in correction centers such as Al Radda, as well as the groups that supports those that are in teh process of recovery from drug addiction like the Ishraq and the National Rehabilitation Centre (Khalifafund, 2013).
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Khalifafund (2013). Welcome To Khalifa Fund For Enterprise Development website. Retrieved on 10 December 2013 from: <https://www.khalifafund.ae/En/HomePage/Pages/default.aspx>
Waed.net (2013). About us. Retrieved on 10 December 2013 from: <http://www.waed.net/English/Pages/About-us.aspx>
Wamda (2013). Wa’ed Startup Lab – A New Breed of Incubators in Saudi. Retrieved on 10 December 2013 from: <http://www.wamda.com/a-naimi/2013/09/wa-ed-startup-lab-a-new-breed-of-incubators-in-saudi>
Saudiaramco (2013). Wa’ed: Boosting the economy. Retrieved on 10 December 2013 from: <http://www.saudiaramco.com/en/home/news/latest-news/2011/wa_ed–boosting-the-economy.html>