www.ebook3000.com Business and Entrepreneurship in Saudi Arabia www.ebook3000.com The Wiley Finance series contains books written specifically for finance and investment professionals as well as sophisticated individual investors and their financial advisors Book topics range from portfolio management to e-commerce, risk management, financial engineering, valuation and financial instrument analysis, as well as much more For a list of available titles, visit our website at www.WileyFinance.com Founded in 1807, John Wiley & Sons is the oldest independent publishing company in the United States With offices in North America, Europe, Australia, and Asia, Wiley is globally committed to developing and marketing print and electronic products and services for our customers’ professional and personal knowledge and understanding Business and Entrepreneurship in Saudi Arabia Opportunities for Partnering and Investing in Emerging Businesses EDWARD BURTON www.ebook3000.com Copyright © 2016 by Edward Burton All rights reserved Published by John Wiley & Sons, Inc., Hoboken, New Jersey Published simultaneously in Canada No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 646-8600, or on the Web at www.copyright.com Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at http://www.wiley.com/go/permissions Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose No warranty may be created or extended by sales representatives or written sales materials The advice and strategies contained herein may not be suitable for your situation You should consult with a professional where appropriate Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages For general information on our other products and services or for technical support, please contact our Customer Care Department within the United States at (800) 762-2974, outside the United States at (317) 572-3993 or fax (317) 572-4002 Wiley publishes in a variety of print and electronic formats and by print-on-demand Some material included with standard print versions of this book may not be included in e-books or in print-on-demand If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com For more information about Wiley products, visit www.wiley.com Library of Congress Cataloging-in-Publication Data is available: ISBN 9781118943960 (Hardcover) ISBN 9781119296188 (ePDF) ISBN 9781119296171 (ePub) Cover Design: Wiley Cover Images: (top) © Kingdom of Saudi Arabia, Royal Commission for Jubail & Yanbu; (bottom) © Saudi Desert Photos by TARIQ-M/ Getty Images, Inc Printed in the United States of America 10 To my mother and father www.ebook3000.com Contents Preface ix Acknowledgments xxi About the Author xxii Introduction xxiii CHAPTER The Kingdom’s Modern Economy and Economic Might The Modern Saudi Economy and the National Development Plans The Private Sector’s Role in National Development and Non-Oil GDP So, How Has It All Worked Out? The Kingdom’s Path to Economic Diversification Notes CHAPTER Innovation in Saudi Arabia: The Kingdom’s March Toward the Future Evaluating Innovation in Saudi Arabia: The Global Innovation Index and the Importance of International Market Engagement Innovation versus Invention Technological and Scientific Discovery in Saudi Arabia King Abdulaziz City for Science and Technology (KACST) King Abdullah University for Science and Technology (KAUST) Industrial Clusters Program (IC), SABIC, and Saudi Intellectual Property Notes CHAPTER The Development of Family-Owned Businesses in Saudi Arabia Defining the Family-Owned Business (FOB) The Corporate versus Social Nature of the Saudi Family-Owned Business Corporate Succession within Saudi Family-Owned Business and New Generation Integration 1 17 29 33 33 40 42 45 56 62 67 69 69 74 81 vii www.ebook3000.com viii CONTENTS Management of Strategic Focus and the Importance of Corporate Governance Illustrations of Saudi Family-Owned Businesses Notes CHAPTER Entrepreneurship in Saudi Arabia Today Defining "Entrepreneur" in Saudi Arabia Saudi Entrepreneurs—The Decision to Go into Business Mr Saud Al-Suhaimi, CEO of Jawlah Tours Mr Abdulrahman Al-Olayan, Businessman, Lecturer, Doctoral Candidate Bankruptcy in Saudi Arabia Notes CHAPTER Exploring Saudi Entrepreneurism and Opportunities for Business Entrepreneurship as a Catalyst for Economic Growth—Saudi Realities Promotion and Support of Saudi Entrepreneurs and Small and Medium-Sized Businesses Endeavor Global Incorporated (Endeavor) and Endeavor Saudi Arabia The National Entrepreneurship Institute (RIYADAH) The Centennial Fund (TCF) Saudi Technology Development and Investment Company (TAQNIA) Notes CHAPTER New Horizons for the Kingdom and for Its Domestic and Foreign Businesses A New Era in U.S.–Saudi Commercial Relations Saudi and American Goodwill and Right Intentions— A High-Level Discussion on U.S.–Saudi Bilateral Commercial Relationships New Fiscal Realities and Recurrent Development Themes Closing Thoughts Notes Index 90 98 116 120 120 130 136 142 150 157 162 162 168 169 178 186 192 198 201 201 206 211 218 220 223 225 Index Bin BAZ Charity Foundation, 101 Bin Faisal Bin Turki Al-Saud, Abdullah, 188 Bin Hamoud Al-Mutairi, Abdul Aziz, 190–191 Bin Hassan Al-Abdulaqdir, Abdullah, 193 Bin Juma, Fahd, 165 Bin Muhammad Al-Eiban, Musaid, 11 Bin Saad Bin Said, Essam, 11 Bin Saleh Bin Sultan, Sultana M., 55 Bin Salman Bin Abdulaziz Al-Saud, Mohammed, 11, 27 Bin Salman Bin Abdulaziz Al Saud, Prince Sultan, 140 Bin Salman, Mohammed, 201–202, 213–214 Bin Saud Bin Mohammad Al-Saud, Turki, 193, 195–196 Bin Saud Mohammed Al-Saud, Turki, 47, 53, 65 Bin Saud, Turki, 193 bint Abdulrahman Al-Jeraisy, Huda, 101 Bin Talal Bin Abdulaziz Al-Saud, Alwaleed, 25 Blackberry Academy, 189 Bloomsburg University of Pennsylvania, 143 Boeing, 60 Boston Consulting Group (BCG), 131 BPSL See Bankruptcy Preventive Settlement Law British Broadcasting Corporation (BBC), KAUST report, 58 Business business-natured FOB, influence, 83 development projects, economic analysis viewpoints, 162–163 failures, reorganization (facilitation), 156 opportunities, 162 passion, 138 people, entrepreneurial class, 121–122 promotion/support, 168–169 relationship, 206 Cadbury, Adrian, 93 California-Arabian Standard Oil Company (CASCO), Damman No 7, Cantillon, Richard, 121–128 business pursuits, 124 definitional elements, crafting, 130 entrepreneur definitional elements, 125 entrepreneur definition, satisfaction, 126 viewpoints, 129–130 Capital-intensive petrochemical/ chemical sectors, industrial base, 112 Capitalism, actors (behavior), 129 Capitalism, Socialism, and Democracy (Schumpeter), 128–129 Capital Markets Authority (CMA), 95 Carter, J.R.L., 70, 71 CASCO, 90–91 CCL See Commercial Court Law CDA See Center for Desert Agriculture CDSI See Saudi Department of Central Statistics and Information CEDA See Council of Economic and Development Affairs Centennial Fund See The Centennial Fund Centennial Valley (CV), 190 Center for Desert Agriculture (CDA), 61 Center industry affiliates program (CIAP), 59 CEO Roundtable, 211 Chandler Act (1938), 153 Chandler, Alfred DuPont, 108 Chase Manhattan, 90 Chemical and life sciences and engineering (CLSE), 57 Chevron-Phillips, 64 CIAP See Center industry affiliates program Civil Service Bureau, 106 CMA See Capital Markets Authority Coca-Cola, 90 Colgate-Palmolive, 90 Commercial Court Law (CCL), 153–154 Commercialization, assistance (government role), 53 Community, CVP core value, 114 Core Values Pocketbook (CVP) (Zamil Group), 113–114 Corporate governance Cadbury Committee definition, 93–94 importance, 90–98 OECD definition, 93 Corporate research and innovation (CRI) center, 60–61 Corporate succession See Saudi familyowned business challenge, 107 Corporations, KICP program members, 60 www.ebook3000.com 226 Council of Economic and Development Affairs (CEDA), 2, 11, 213 Council of Saudi Chambers of Commerce and Industry, 110, 154 Course subject matter, uniformity, 144–145 Cradle-to-cash care, 186 Creative destruction, 128, 130 Creditor participation, 155 Credit Suisse, 90 Credit Suisse Saudi Arabia, 106 CRI See Corporate research and innovation Cross-border mergers, 77 CVP See Core Values Pocketbook Dahaln, Abdulrahman, 82 Damman No 7, Debt, discharge, 156 Debtors, assets (management), 155 Debt’s Dominion (Skeel, Jr.), 151 DeCrane, Alfred, 106 Demetriou, Steven J., 207 Development themes, 211–218 Develop Your Business Idea (DYBI) program, 186 Dhahran Techno Valley, 204 Digital transformation, 204 Dimon, Jamie, 207 Dischargeability Act of 1978, 153 “Doing Business 2015” (World Bank), 154–155 Domestic businesses, future, 201 Donahue, Thomas, 207 Dow Chemical Company, 60, 64, 203–204 Drucker, Peter F., 40–42, 127–128 Duke of Orleans, 122 DYBI See Develop Your Business Idea E4EE See Education for Entrepreneurship and Employment e-application systems, 184–185 Ebola virus, spread (international health emergency), 52 Economic analysis, 162–163 Economic change, 8–9 Economic growth entrepreneurship, catalyst action, 162–168 spurring, 214 Economic theory, postulates, 163 INDEX Economy, transformation, 218 Ecosystem, term (avoidance), 135 ECP See Electronics, communications, and photonics Education for Entrepreneurship and Employment (E4EE), 190 Eindhoven University of Technology, 50 Elabdelwahab, Sherif, 157, 179–184, 186 Electronics, communications, and photonics (ECP), 49 Electronic Services Center, 99 EMI See SABB Emerging Markets Index Eminent domain, 149–150 EMS See Entrepreneur Management System Endeavor Global Incorporated (Endeavor), 115, 169–178 Endeavor Saudi Arabia, 115, 169–178 Enterprise, defining, 183 Entrepreneurial development, training packages, 183–184 Entrepreneurial ventures, U.S perception, 120 Entrepreneurism, exploration, 162 Entrepreneur Management System (EMS), 191 Entrepreneurs business decisions, 130–136 clustering, 124 defining, 120–130 definitional elements, 125 definition, expansion, 126 innovation, 41 international academy, 189 issues, 140–141 success, 141 support/promotion, 163 types, 140–141 Entrepreneurship, 120 catalyst, 162–168 definition, usage, 116 development, 166 organizations, association, 170t–171t promotion, TAQNIA role, 195–196 reason, 183 Erada services program, 184 Essai (Cantillon), 121, 123, 127 European Patent Office (EPO), 65 Excellence in Tourism Awards (SETA), 140 Extreme travelers, catering, 139 “EY G20 Entrepreneurship Barometer 2013,” 125–126 227 Index Fair market value, receiving, 149–150 “Fake Saudi Worker” syndrome, 23 “Family Businesses and Succession in Saudi Arabian Culture and Traditions” (Dahlan/Klieb), 81–82 Family commitment, 69 Family companies, financial growth, 91 Family-owned business (FOB), 217 boards of directors governance, absence, 75 corporate nature/social nature, contrast See Saudi family-owned business defining, 69–74 development, 69 entrepreneurs, considerations, 197–198 global activities, 71 Faqih, Adel, 52 Fatwas, sanction, 134 FDI See Foreign direct investment “Femininization Program,” 134–135 Field, Michael, 70 Fifth Strategic Principle, 43–44 Final consumption, growth, Financial Reporting Council, 93 Firestone, 90 Firm longevity, family commitment, 69 Fiscal pressures, tightening, 209 Fiscal realities, 211–218 Five-Year Development Plans See Kingdom of Saudi Arabia FJVP See Foreign joint venture partner Fleming, alexander, 41 FOB See Family-owned business Foreign businesses, future, 201 Foreign Commercial Service, 39 Foreign direct investment (FDI), 202–203 Foreign Investment Law (1999), 187 Foreign joint venture partner (FJVP), 84–89 Friedman, Thomas, 173 Gage, Joseph Edward, 122 Game changer, 25 GCC See Gulf Cooperation Council GCC UE See Gulf Cooperation Council of Entrepreneurs GCF See Seventh Annual Global Competitiveness Forum GEF See Global Entrepreneurship Forum GEM See Global Entrepreneurship Monitor General Electric (GE), 60, 90 Global Research Center, 57 Innovation Center, 204 investment commitment, 204 General Investment Authority of Saudi Arabia (SAGIA), 187 General Organization for Social Insurance (GOSI), 12 General Organization for Technical Education and Vocational Training (GOTEVOT), 180 General Private Bank (Banque Générale Privée), 122–123 Global board of directors, 172 Global commodity prices, volatility, 203 Global Entrepreneurship Forum (GEF), 189 Global Entrepreneurship Monitor (GEM), 124–125, 173–174 Global Innovation Index (GII), 33–40 country ranking, 35 Global Innovation Index Ranking, 35 Global oil prices, decline, 211–212 Glowork, study, 148–149 GOSI See General Organization for Social Insurance GOTEVOT See General Organization for Technical Education and Vocational Training Gottlieb, M.J., 130 Government entity, creation (Saudi Council of Ministers approval), 165 Government jobs, availability, 180 Government Relations Unit, 187 Grain Silos and Flour Mills Organization (GSFMO), 13 Great Depression, 151 Gross domestic product (GDP) contribution, 166 growth estimation, 19 rate, increase, non-oil sector share, increase, 18–19 private sector contribution, GSFMO See Grain Silos and Flour Mills Organization Gulf Cooperation Council (GCC), 168, 177 High Consultative Council, 105–106 workforces, 149 Gulf Cooperation Council of Entrepreneurs (GCC UE), 190 Gulf Marketing Review, 139–140 www.ebook3000.com 228 H.A Al-Zamil and Brothers Company, 109 Hafiz, Mohammad A., 174 Hafiz program, 132 benefits, 133–134 Halliburton, 60, 90 Hamre, John J., 207 Hassan, Mohammed Kabir, 135–136 Henderson Bill, 152 Hewson, Marillyn A., 207 High Consultative Commission of Prince Sultan Bin Abdul Aziz Al Saud Charity Foundation, 100 High-impact entrepreneurs, 173 Holy City of Mecca, private landowners, 150 Holy City of Medina, 138 business, 149 private landowners, 150 religious role, 138–139 Holy Quran, dependence, 154 Hong Kong Shanghai Banking Corporation (HSBC), report, Hong Kong University of Science and Technology, 57 Horizontal diversification, 215 How to Ruin a Business Without Really Trying (Gottlieb), 130 HRDF See Human Resources Development Fund HRH Prince Abdulaziz Bin Abdullah International Award for Entrepreneurship, 189 H.R.H Prince Mohammed Bin Fahad Award for Charity Contributions, 115 HRH Princess Banderi, 174 HSBC, 90 Human resources, development, Human Resources Development Fund (HRDF), 80, 132 IBM, 57 System Blue Gene supercomputer, 58 IC See Industrial clusters program ICT See Information and communication technology; Information, communications and technology Ideation training, 184–185 IFC See International Finance Corporation ILO See International Labor Organization Immelt, Jeffrey, 207 Implied buy-in, 78 INDEX Independency (motivator), 147 Industrial clusters program (IC), 62–66 Industrial exports, increase, 62 Industrialization promotion strategies, 20 Industrial sectors, development (catalyst), 63 Industrial value-added activity, increase, 62 Information and communication technology (ICT), 29, 53–54 Information, communications and technology (ICT), 194 Information technology (IT), 49 Innovation, 33 evaluation, 33–40 invention, contrast, 40–42 programs, 194 science, technology, and innovation (STI), 42, 48 spurring, 47 Innovation and Entrepreneurship (Drucker), 40 Innovation Center, 204 Innovation Efficiency Ratio, 34–35 Innovators, invention process, 41 Inquiry into the Nature and Causes of the Wealth of Nations, The (Smith), 127 INSEAD, 34 Insolvency handling, 155–156 laws impact, 151 utility, 154–155 resolution, 154 voluntary/involuntary declarations, 152 Institut Francais du Petrole, 57 Intellectual property (IP) assets, 195 development, 50 rights, respect, 66 Intellectual property management (IPM) program, 50 Intellectual property rights, 66 Intel Program for Innovation, 189 International academy for entrepreneurs, 189 International Finance Corporation (IFC), 167 IFC Family Business Governance Handbook (2008), 69 International Labor Organization (ILO), 182–183 229 Index KAB entrepreneurship awareness training program, 183 International market engagement, importance, 33–40 International Monetary Fund (IMF) Article IV, 212–213 Articles of Agreement, 212 changes, recommendations, 213 Country Report, 24 policy discussions, 24 International Systems Engineering (ISE), 195 International Trade Administration (ITA), 39 Investments, expectations, 202 Investor Service Center, 187 IP See Intellectual property IPM See Intellectual property management Iran, hegemonic aspirations (Kingdom control), 212 ISE See International Systems Engineering Islamic-based modernization, 136 Islamic Entrepreneurship (Kayed/Hassan), 135–136 IT See Information technology Japan Saudi Arabian Methanol Company, 180–181 Jawlah Destination Management Company (Jawlah DMC), 137 Jawlah Tours, 136–142 business, initiation, 142 startup decision difficulty, 139 Jawlah Tours Establishment for Tourism (JTET), 139 JCCS See Jeraisy Computer and Communication Services Company Jeddah Chamber of Commerce and Industry, retailer data, 134–135 Jeddah chamber of conference and industry (JCCI), 79 Jeraisy Computer and Communication Services Company (JCCS), 99 Jeraisy Computer Paper Products Company, 99 Jeraisy Furniture Factory (JFF), 99 Jeraisy Group, 100, 101, 114 development, interests management, 102 Jeraisy Group Card Tech Factory, 99 Jeraisy Group, Saudi FOB example, 98–103 Jeraisy Internet Services Company, 99 JFF See Jeraisy Furniture Factory Jobs, creation, 164–165 “Jobs on Air” (television program), 132 Jobs, Steve, 176 Joint stock companies, stakeholders, 94 Joint ventures (JVs), 10, 86 foreign JV partners, interests, 96 formation, 111 JTET See Jawlah Tours Establishment for Tourism Jum’ah, Abdallah, 207 KAB See Know About Business KACST See King Abdulaziz City for Science and Technology KAEC See King Abdullah Economic City Kalafah program, establishment/ management, 167–168 KAUST See King Abdullah University of Science and Technology KAU study, 143 Kayed, Rasem N., 135–136 KBI See Knowledge-based industries Kellner, Peter, 169 Kennedy, Thomas, 207 KFUPM See King Fahad University of Petroleum and Minerals Khalid Ali Alturki & Sons, 174 KICP See King Abdullah University for Science and Technology industry collaboration program Kimberly-Clark, 90 King Abdulaziz and His Companions Foundation for the Gifted, 101 King Abdulaziz City for Science and Technology (KACST), 42, 45–57, 193 conferences/meetings, 50 Five-Year Development Plans, 55 national center for technology development (TDC), 48, 51t national center for technology development (TDC), products/ services/accomplishment areas, 51t responsibilities, 46 strategic objectives, 46 King Abdullah Economic City (KAEC), 190 King Abdullah Scholarship Program, 186 King Abdullah University of Science and Technology (KAUST), 56–61, 57 Center for Desert Agriculture (CDA), 61 www.ebook3000.com 230 King Abdullah University of Science and Technology (KAUST) (Continued) Chemical and Life Sciences and Engineering, 61 Computational Biosciences, 61 industry collaboration program (KICP), interest, 59 Red Sea Science & Engineering, 61 Water Desalination and Reuse Centre, 61 Kingdom of Saudi Arabia (KSA) bankruptcy, 150–157 budget, changes, 214 commercial establishments, number, 70 countercyclical approach, 26 development themes, 211–218 dissent, suppression, 145 diversification/opportunities, 28 domestic businesses, future, 201 economic change, 8–9 economic diversification, path, 17 economic growth, entrepreneurship (catalyst action), 162–168 economic might, economy, progress, 9–17 transformation, 218 Eighth Development Plan, employment, seeking, 131 entrepreneurism, exploration, 162 entrepreneurship, 120 organizations, association, 170t–171t family-owned business (FOB), 69 global activities, 71 Fifth Strategic Principle, 43–44 First Development Plan, 4, 17, 215 fiscal realities, 211–218 Five-Year Development Plan, 55, 164 approval, delivery, 8–9 five-year development plans, chronology, 3t foreign businesses, future, 201 give-back, 205 Global Innovation Index (GII), 33–40 goodwill, 206–211 gross domestic product (GDP), 70 composition, industry sector analysis, 20f growth, estimation, 19 horizontal diversification, 215 IMF Country Report, 24 INDEX IMF, policy discussions, 24 industrialization promotion strategies, 20 innovation, 33 evaluation, 33–40 intellectual property rights, 66 international market engagement, importance, 33–40 knowledge-based economy, 58 macroeconomic level, Ministry deliverables, 5–6 markets commercialization, 49 openness/competitiveness, 219–220 transparency/efficiency, 96 national development plans, private sector, 8–9 national industry strategy (NIS), objectives, 62–63 Ninth Development Plan, 3–5, 19 effectiveness, assessment, indicators, 6t knowledge-based economy, importance, 34 Main Directions, Ministry of Economy and Planning accomplishments, expectation, objectives, 28 Nitiqat (Zones) Program, 23t non-oil GDP, private sector, 8–9 objectives, achievement, 3–4 population, CDSI data, 21 private enterprise, role, 8–9 problems, 213 Public Investment Fund (PIF), 10, 13, 192 royal decree An A/111, objectives, 12 Seventh Development Plan, spatial diversification, 216 special/exclusive privileges, 12–13 state-owned/controlled privileges, 12–13 status, upgrading, 63 Strategic Technology Program Summary, 44–45 technical/scientific discovery, 42–45 Tenth Development Plan, 17 Fourth Objective, 216 goals/objectives, 215–216 unavailability, 26–27 transformation, 58 U.S.-Saudi commercial relations, 26 vertical diversification, 215 231 Index King Fahad University of Petroleum and Minerals (KFUPM), 137–139 King Fahd University of Petroleum and Minerals, 57, 147 King Khalid Foundation, 174 King Louis XIV, 122 King Saud University (KSU), 64, 138 KIPO See Korean Intellectual Property Office Kleinfeld, Klaus, 207 Klieb, Leslie, 82 Know About Business (KAB), 182–183 entrepreneurship awareness training program, 183 Knowledge-based economy, 58 building, 28–29 importance, explanation, 34 Knowledge-based industries (KBI), 40, 192–193 Kohl v United States, 149 Korean Intellectual Property Office (KIPO), 65 Kraft Foods, 90 KSA See Kingdom of Saudi Arabia KSU See King Saud University Kuwait, Western company presence, 75–76 Lance, Ryan, 207 Law, John, 122–123 Law of Patents, issuance, 65 Leadership Circle, 168 Legal regulations, virtue, 146 Lesar, David, 207 Lew, Jacob J., 77 Liveris, Andrew, 207 Loans, guarantee, 167 Localization, 102 Lockheed Martin, 60 London Business School, Babson College (joint venture), 124–125 London Stock Exchange, 93 Ma’aden See Saudi Arabian Mining Company Market failure curing, 165 occurrence, 163 Mars, 60 Materials Research Institute, 50 Mathematical and computer sciences and engineering (MCSE), 57 McColl, Jr., Hugh L., 106 MCSE See Mathematical and computer sciences and engineering Medina See Holy City of Medina medium-sized businesses, promotion/ support, 168–169 Memorandum of understanding (MOU), 61 MENA See Middle East-North Africa MENA Survey, 131 Mentor capitalist, 173 Mercer, John, 55–56 Merchandise/services exports, growth, 5–6 Merchant families, description, 71–72 Merchant Families of Saudi Arabia (Carter), 70–72 Microsoft, 189 Middle East-North Africa (MENA), 131 Middle East Respiratory Syndrome coronavirus (MERS-CoV), 52 Minister of Commerce and Industry (MCI), 38 bankruptcy law public comment, 156 Ministry of Civil Service, 133 Ministry of Commerce and Industry (MOCI), 16, 38, 166 Ministry of Economy and Planning, accomplishments (expectations), Ministry of Finance Lending Program, 13 Ministry of Labor, 135 Ministry of Petroleum and Mineral Resources (MOP), 180 Ministry of Post, Telephone and Telegraph (MOPTT), 12 Mississippi Bubble, 122 Mississippi Company, 123 MOCI See Ministry of Commerce and Industry Modernization See Islamic-based modernization MODON See Saudi Industrial Property Authority MOP See Ministry of Petroleum and Mineral Resources Morris, Rhett, 173 Motivation factors, 147 MOU See Memorandum of understanding Muilenberg, Denis, 207 www.ebook3000.com 232 Naizak Global Engineering Systems, 147 NASEEJ, 195 National center for technology development (TDC), 48 products/services/accomplishment areas, 51t National Commercial Bank (NCB), 12, 91–92 innovations, 62 National Committee of the Council of Saudi chambers of commerce, 22 National Company for Cooperative Insurance (NCCI), 13 National development, private sector role, 8–9 National Entrepreneurship Institute (Riyadah) , 157, 178–186 branch/liaison offices, management, 182 entrepreneurial development, training packages, 183–184 establishment, 180–181 full operations, achievement, 181–182 origins, 179–180 Riyadah, relationship, 182–183 “Start Your Own Business,” 184 Trainee Application and Matriculation Process, 185f National income, sources (diversification), National industry strategy (NIS) objectives, 62–63 promulgation, 62 National innovation ecosystem (NIE), 50 National innovative ecosystem (NIE) development, facilitation, 49 National manpower, share (increase), National Petrochemical Technology Center, 50 National Prawn Company (NPC), 61 National Science and Technology Policy (NSTP), 42–45, 52 National Science Foundation (NSF), 47 National Science, Technology, and Innovation Plan (NSTIP), 44–45 National technology incubator program (BADIR), 193 funding, 197 incubation program, 198 incubator, support, 178 initiative, 49–50, 53–56 technology focus, 53–54 INDEX National Transformation Plan (NTP), 17, 27 National University of Singapore, 57 NationsBank, 106 Nature Publishing Index (NPI), 66 Nazer, Hisham Mohiddin, NCB See National Commercial Bank NCCI See National Company for Cooperative Insurance Nelson Act See Bankruptcy Act of 1898 Nelson, Knute, 152 New generation integration, 81–90 “New Strategic Partnership for the 21st Century,” 202, 204 NIE See National innovation ecosystem NIS See National industry strategy Nitiqat (Zones) Program, 23t green/platinum zones, classification requirements, 79–80 indigenization program, 21 initiative, 78 system, evolution, 22–23 Non-oil GDP, private sector, 8–9 NPC See National Prawn Company NPI See Nature Publishing Index NSF See National Science Foundation NSTIP See National Science, Technology, and Innovation Plan NSTP See National Science and Technology Policy NTP See National Transformation Plan Obama, Barack, 201 tax inversion issue, 76–77 OECD See Organisation for Economic Co-operation and Development Office of research services (ORS), 59 Office of Science and Technology Policy (OSTP), 47 Oil dependence, reduction, Oil embargoes, 18 Olayan, Sulaiman, 90 Oman, GII ranking, 35 One-man shows, 75 Operational dynamics, focus, 94 Operation Decisive Storm, 212 Optional early dismissals, 78 Organisation for Economic Co-operation and Development (OECD), 93 ORS See Office of research services Oxford Business Group, 27 233 Index PASME See Public Authority for Small and Medium Enterprises Patent Cooperation Treaty (PCT), 36 Patent registration, 66 Peace Be Upon Him (PBUH), 70 Philanthropic for Youth Marriage Support, 101 Physical sciences and engineering (PSE), 57 PIF See Public Investment Fund PlasChem Park, 203 PNAS See Proceedings of National Academy of Sciences, USA Prince Sultan Bin Abdul Aziz Private University, 101 “Principle of Review of Corporate Governance” (World Bank), 95–96 Private companies, 217 Private enterprise, role, 8–9 Private equity, potential, 97 Private rates of return, 163 Private-sector employment, impact, 133 Private sector entrepreneurship promotion organizations, 164 Private-sector jobs, employment stability, 131 Privatization, reference, 10 Proceedings of National Academy of Sciences, USA (PNAS), 61–62 Profit maximization, 83 Profit motives (motivator), 147 Prophet Mohammad, 70 Prosperity, CVP core value, 114 PSE See Physical sciences and engineering Public Authority for Small and Medium Enterprises (PASME), 166 Public Investment Fund (PIF), 10, 13, 192, 193 Public sector, employment stability, 131 Purchasing Manager’s Index (PMI), Qaitani, Abdullah Mohammed, 79 Qatar GII ranking, 35 Western company presence, 75–76 Quincy House, 145 Rabiah and Nassar and Al-Zamil Concrete Industries Company Limited, 111 Radio-frequency identification (RFID) tags, usage, 61 Ramadi, Mohamed, 20 Ramady, Mohamed A., 18, 20 RCCI See Riyadh Chamber of Commerce and Industry RCJY See Royal Commission of Jubail and Yanbu Real Estate Development Fund (REDF), 13 Red Wing, 90 Reorganization proceedings, 155 Research and development (R&D) developmental services, 196 outputs, commercialization, 194 spillovers, 162–163 Research park and innovation cluster (RPIC), 59 Resolution No 217, 192 Resolution No 241, 154 Resolution Number Thirty-Five, Saudi Council of Minister adoption, 62 Resources economic benefit, 41 identification/capitalization, 138 Retail establishment, women (employment), 134 Retail supply system, 209 Reynolds, Paul, 124–125 RFID See Radio-frequency identification RHC See Riyadh House Company RHE See Riyadh House Establishment Risk, willingness, 125 Riyadah See National Entrepreneurship Institute Riyadh Chamber of Commerce and Industry (RCCI), 79, 100–101, 115, 131 Riyadh Electrical Corporation, 110 Riyadh House Company (RHC), 99 Riyadh House Establishment (RHE), establishment, 98 Riyadh Philanthropic Foundation for Sciences, 101 Riyadh Taqnia Venture Capital Fund, 196 Robotics Centre, 189 Rolls-Royce, 60 Rottenberg, Linda, 169, 173 Royal and Sun Alliance Insurance (Middle East) Ltd., 106 Royal Bank (Banque Royale), 122 Royal Commission of Jubail and Yanbu (RCJY), 18, 203 www.ebook3000.com 234 Royal decree No (M/30), 95 Royal decree No (M/38), 65 Royal decree No 32, 153–154 Royal decree No 190/A, 187 Royal decree No A/111, objectives, 12 Royal decree No M/51, 154 Royal resolution No (M/47), 192 RPIC See Research park and innovation cluster RTI International, 194 SAAB See Saudi Arabian Agricultural Bank SABB Emerging Markets Index (EMI), SABIA See Saudi Arabian General Investment Authority SABIC See Saudi Basic Industries Corporation Sadara JV, 203 Sadi, Muhammad Asad, 147–148 SAFCO See Saudi Arabian Fertilizer Company Safeway, 90 SAGIA See General Investment Authority of Saudi Arabia; Saudi Arabian General Investment Authority; Saudi Arabian Investment Authority Sahara Petrochemical Company, 110 Salaat-ul-Istikhaarah, 109 Saline Water Conversion Corporations (SWCC), 13 SAMA See Saudi Arabian Monetary Agency SANCST See Saudi Arabian National Centre for Science and Technology Saudi Aquaculture Society (SAS), 61 Saudi Arabia See Kingdom of Saudi Arabia “Saudi Arabia–A Promising Proposition for Private Equity” (Alkhabeer Capital), 97 Saudi Arabian Agricultural Bank (SAAB), 13 Saudi Arabian Airlines (SAUDIA), 13 Saudi Arabian Economy (Ramadi), 20 Saudi Arabian Economy, The (Ramady), 18 Saudi Arabian Fertilizer Company (SAFCO), 13, 176 Saudi Arabian General Investment Authority (SAGIA), Seventh Annual Global Competitiveness Forum (GCF), Saudi Arabian Investment Authority (SAGIA), 27–28 INDEX Saudi Arabian Mining Company (Ma’aden), 12–13 Saudi Arabian Monetary Agency (SAMA), 105, 167 Saudi Arabian National Centre for Science and Technology (SANCST), 45 Saudi Arabian Oil Company (Saudi Aramco), 10, 12, 57, 60, 64, 176 contracts, 163 foreign controlled company, IC partner, 63 partnership, 180 Sadara JV investment, 203 Saudi Basic Industries Corporation (SABIC), 10, 60–66, 180, 193 government ownership, 12 IC partner, 63–64 intellectual patents holding, 52 interest, holding, 13 KAUST, interaction, 61 Saudi Bin Laden Group, 60 Saudi business innovation network (SBIN), establishment, 56 Saudi business innovation research (SBIR) program, 49–50 Saudi Council of Ministers, government entity creation approval, 165 Saudi Credit and Savings Bank (SCSB), 166, 180, 193 plan review, 185–186 Saudi Department of Central Statistics and Information (CDSI) population data, 21 unemployment rate report, Saudi Electric Company (SEC), 13 Saudi enterprises, promotion/support, 168–169 Saudi Export Development Authority (SEDA), 38–39 Saudi Export Program (SEP), creation/ operations, 36–37 Saudi family-owned business (Saudi FOB) core nature, 82 corporate succession, 81–90 founder death (joint venture partner), occurrence, 83–84 generations, differences, 108, 126 historical predisposition, 93 illustrations, 98–116 optional early dismissals, 78 private equity, potential, 97 235 Index profits, expansion, 78 Saudi family-owned business (Saudi FOB), corporate nature/social nature (contrast), 74–81 Saudi Fund for Development (SFD), 36–37 Saudi-hire rate, attainment, 210 Saudi Industrial Development Fund (SIDF), 13, 166–167 Saudi industrial labor force, increase, 63 Saudi Industrial Property Authority (MODON), 38–39 Saudi Intellectual Property, 62–66 Saudi International Bank, 105 Saudi International Petrochemical Company (Sipchem), 64, 110 Saudi joint venture partner (SJVP), 84–89 Saudi Ministry of Transportation, joint company plans, 132 Saudi Patent Office (SPO), 36, 48, 65 operations, initiation, 65–66 Saudi principal (death), joint ventures (relationship), 84–89 assumptions, 84 business entity, 87–88 natural person, 84–87 Saudi Railways (SRO), 13 Saudi Real Estate Company (SREC), 12 SAUDISAT 1, 195 Saudi Technology Development and Investment Company (TAQNIA), 192–198 formation, 195 responsibilities, 197 role, 195–196 TAQNIA Cyber, 194 TAQNIA Defense, 194 TAQNIA Holding, 195, 196 TAQNIA Services, 194, 197 TAQNIA Space, 194 Saudi Telecom Company (STC), 12 Saudi Travel and Tourism Investment Market (STIMM), 140 Saudi Yanbu Petrochemical Company (Yanpet), 176 Saudi youth, aspirations (crisis), 177 Saudization, 21, 79 Say, Jean-Baptist, 121–122, 126–127, 142 entrepreneur definition, 128 viewpoints, 129–130 SBA See Small Business Administration SBIN See Saudi business innovation network SBIR See Saudi business innovation research Scheiber, Noam, 120 Schumpeter, Joseph Alois, 128–130 viewpoints, 129–130 Science and Technology National Policy (STNP), 43 Science, technology, and innovation (STI), 42, 48 Scientific discovery, 42–45 SCSB See Saudi Credit and Savings Bank Seaton, David, 207 SEC See Saudi Electric Company; Supreme economic council Security Pacific Bank, 105–106 SEDA See Saudi Export Development Authority Self-achievement (motivator), 147 Self-confidence (motivator), 147 Self-sustaining collaborations, 52 ServiceNow, 120 SETA See Excellence in Tourism Awards Seventh Annual Global Competitiveness Forum (GCF), SFD See Saudi Fund for Development SFIs See Specialized Financial Institutions Shaheen (Peregrine Falcon) II supercomputer, usage, 58 Shell Oil Company, 60, 64, 190 Shleifer, Andrei, 94 Short Message System (SMS), 54–55 SIDF See Saudi Industrial Development Fund Siemens, 60 Sipchem See Saudi International Petrochemical Company SIPO See State Intellectual Property Office of the P.R.C SJVP See Saudi joint venture partner Skeel, Jr David Arthur, 151–152 Small and medium business development center (SMBDC), 180–181 Small and medium-sized businesses (SMEs), 10, 45, 95 capital access, 175 Coordination Council, 166 corporate financing, 167 development, 166 economic opportunities, creation, 164–165 empowerment, 209 www.ebook3000.com 236 Small and medium-sized businesses (SMEs) (Continued) encouragement, 196 financing, 157 goals, 169 impediments, 149 industrial contracting business, 164 interests, advancement, 100 investment, 173 motivational factors, 162 promotion, 163, 168–169 role, 140 role models, 173 supply chain, capacity, 204 support, 163, 168, 191, 196, 216 Small Business Administration (SBA), 103 Smart capital, access (limitation), 174 SMBDC See Small and medium business development center Smith, Adam, 121–122, 127 SMS See Short Message System Social construction, women’s issues, 146–149 Social norms, virtue, 146 Social rate of return, 163 Social responsibility, fulfillment, 79 Socratic approach, 144–145 Sole proprietorships, 83 Sorenson, Arne, 207 Spatial diversification, 216 Special/exclusive privileges, 12–13 Specialized Financial Institutions (SFIs), 13 SPO See Saudi Patent Office SREC See Saudi Real Estate Company SRO See Saudi Railways Standard Oil of California (SoCal), Damman No 7, Startups capital access, 175 U.S perception, 120 State Intellectual Property Office of the P.R.C (SIPO), 65 STC See Saudi Telecom Company Steelcase Jeraisy Ltd., 99 STI See Science, technology, and innovation STIMM See Saudi Travel and Tourism Investment Market STNP See Science and Technology National Policy INDEX Strategic focus, management, 90–98 Strategic Technology Program Summary, 44–45 Sudan, KSE ally, 212 Sumitomo Chemical, 64 Supply and Logistics Solutions, 167 Supreme economic council (SEC) creation, 10–11 Decision No 1/23, 11 promise, 12 royal decree No A/111, 12 SWCC See Saline Water Conversion Corporations TAAG See Technology application and advancement group Tadawul operation, 95 symbol 2240, 111 Tahamel Holding Company, service name, 132 Taibah University, 142–143 Tamer, Faisal, 174 Tamer Group, 174 Tamimi, Ali, 90 Tamimi Group, 90 TAQNIA See Saudi Technology Development and Investment Company Tax inversion issue, 76–77 targeting, 77 TCF See The Centennial Fund TDC See National center for technology development Teaching English to Speakers of Other Languages (TESOL), 179 Technical and Vocational Training Corporation (TVTC), 180–181 Riyadah, relationship, 182–183 Technical discovery, 42–45 Technische Universitat Munchen, 57 Technology application and advancement group (TAAG), 59 Technology-based exports, increase, 62 Technology innovation centers program (TIC), 48 Technology transfer and innovation (TTI), 59 Technovia, 194 TESOL See Teaching English to Speakers of Other Languages 237 Index The Centennial Fund (TCF), 186–192 aims, 189 “Business in a Box,” 190 The International Banking Corporation (TIBC), financial problems, 72 The Zamil Institute, 115 3-D Printing Center, 189 TIC See Technology innovation centers program; Trade innovation centers TOP500 project, 58 Toshiba, 90 Trade innovation centers (TIC) program, 52 Trader’s mentality, 71 Training the facilitator feature, 183 TTI See Technology transfer and innovation TVTC See Technical and Vocational Training Corporation Two Holy Mosques King Salman Bin Abdulaziz Al-Saud, 196, 214, 217 Unemployment rate CDSI report, reduction, United Arab Emirates (U.A.E.) GII ranking, 35 KSE ally, 212 Western company presence, 75–76 United Motors Corporation, 106 United Nations for Industrial Development Organization (UNIDOBahrain), 190 United States economy, strengthening, 77 goodwill, 206–211 Saudi bilateral commercial relationships, high-level discussion, 206–211 Saudi bilateral economic and commercial relationship, 208 Saudi commercial relations, 26, 201–206 Saudi partnership opportunities, 202 United States Code, Title 11, 153 United States Patent and Trademark Office (USPTO), 65 University of California at San Diego (UCSD), 57 Upper Country Bill, 152 U.S Constitution Article I, Section *, 151 Fifth Amendment, 149–150 U.S Department of Commerce, 39 USPTO See United States Patent and Trademark Office U.S.-Saudi Arabian Business Council (USSABC), 38, 90, 106, 110 collaboration, 188 interest level, 205 Nitiqat (Zones) Program, 23t real-world business experience, absence, 210 Uttamchandani, Mahesh, 155 Venture Corps, 172 Vertical diversification, 215 Vishny, Robert, 94 Vision 2030, 217–218 Watson, John S., 207 WESCO, 104 Westinghouse Electric Corporation, 104 West Texas Intermediate (WTI), 205 White spot syndrome virus (WSSV), 61 WIPO See World Intellectual Property Organization Women barriers, 148–149 business environment, 146–147 empowerment, 149 motivators, 147 women equal opportunities, creation, 149 Women entrepreneurs, challenges, 143–144 Woods Hole Oceanographic Institution, 57 Work ethic, 130–131 World Alliance of Young Entrepreneurs, 190 World Bank Award, emerging commercial technology selection, 54–55 governance statement, 95–96 “Principle of Review of Corporate Governance,” 95–96 World Bank Group, 167 World Economic Forum, 177 World Intellectual Property Organization (WIPO), 3, 654 World Is Flat, The (Friedman), 173 World Trade Organization (WTO) commercial environment requirement, 15 membership, succession, 71–72 Ninth Ministerial Conference, conclusion, 16 www.ebook3000.com 238 World Trade Organization (WTO) (Continued) Saudi Arabia accession, 10, 16 Saudi Arabia membership, 14 working group queries, 11 WSSV See White spot syndrome virus WTI See West Texas Intermediate Xenel, 60 Xerox, 90 Yanpet See Saudi Yanbu Petrochemical Company Yatooq, 178 Young entrepreneur, identity, 120 Young Entrepreneur’s Alliance G20, 190 Youth Business Singapore, 190 Zamil Advantec Coils, 111 Zamil Chemical and Plastic Holding Company, 110 INDEX Zamil Group, 109 core values, 113 Core Values Pocketbook (CVP), 113–114 distinction, 113 operational/growth strategies, 112 Saudi FOB example, 109–116 Zamil Group Holding Company, 109 investment, continuation, 112 strategy, 110 technology investment, 112 Zamil Hudson Company, 111 Zamil Industrial, 174 Zamil Industrial Investment Company, 81, 110 self-description, 111–112 Zamil Marine, 110 Zamil New Dehli Infrastructure Private Ltd., 111 Zuckerberg, Mark, 120 WILEY END USER LICENSE AGREEMENT Go to www.wiley.com/go/eula to access Wiley’s ebook EULA www.ebook3000.com ... and personal knowledge and understanding Business and Entrepreneurship in Saudi Arabia Opportunities for Partnering and Investing in Emerging Businesses EDWARD BURTON www.ebook3000.com Copyright... about business in the Kingdom of Saudi Arabia and how change occurring within the Kingdom is transforming how business is done It is about Saudi Arabia s business community and the importance and. .. policy for Saudi Arabia are to maintain its religious and moral values, and to raise the living standards and welfare of its people, while providing for national security and maintaining economic and