Youth-Led Economic Transformation: Arab Youth Ready to Build Their Own Businesses
The Arab world is poised to witness a surge in youth entrepreneurship, with nearly half of young Arabs expressing their intention to start their own businesses within the next five years, according to the 15th annual ASDA’A BCW Arab Youth Survey. This landmark study is the largest of its kind, encompassing over 200 million Arab youths.
Highlighting the region’s entrepreneurial zeal, the survey also revealed a growing preference for the private sector as opposed to government employment. This shift in mindset marks a significant trend, as Arab youth unemployment currently stands as one of the highest in the world, with over 26 percent jobless and approximately one in three youths aged 15 to 24 not engaged in employment, education, or training, as reported by the World Bank.
The United Nations has emphasised the urgent need for the region to create 33.3 million jobs by 2030 to accommodate the large influx of young individuals entering the workforce. Recognising this pressing challenge, governments are called upon to take decisive action.
ASDA’A BCW commissioned SixthFactor Consulting to conduct face-to-face interviews with 3,600 Arab citizens aged 18 to 24 across 53 cities in 18 Arab states. This expansive sample, the largest in the survey’s history, also encompassed South Sudan for the first time, ensuring a comprehensive representation of Arab youth opinions across the region.
The survey delved into the aspirations of Arab youth regarding their future careers, revealing that 42 percent of both men and women expressed a desire to start their own businesses within the next five years. The inclination towards entrepreneurship was particularly prominent in the Gulf Cooperation Council [GCC] states, with 53 percent of respondents expressing this aspiration. In comparison, the Levant and North Africa regions exhibited percentage of 39 and 37 percent respectively.
While the entrepreneurial spirit appears strong, the survey identified varying perceptions of ease in starting a business among Arab youth. A notable 58 percent of GCC respondents believed that initiating a business in their respective countries was “very easy” or “somewhat easy”. Conversely, 79 percent of Levant youth and 73 percent in North Africa found it “very difficult” or “somewhat difficult” to embark on entrepreneurial ventures.
To encourage greater youth entrepreneurship, the research highlighted several factors, including tax breaks, reduced startup fees, enhanced training and education opportunities, and government-backed loans. In terms of preferred industries, 15 percent of participants expressed interest in the tech sector, followed by e-commerce [13 percent], creative industries [11 percent], manufacturing [11 percent], real estate [10 percent], the food business [9 percent], and retail, hospitality, and education [7 percent each].
Another noteworthy finding was the growing inclination of Arab youth towards private sector employment. In 2019, nearly half of the respondents expressed a preference for government jobs, whereas now only 30 percent share the same sentiment. Meanwhile, 33 percent of Arab youth aspire to work in business, representing a 13 percent increase from 2022. Furthermore, 25 percent expressed a desire to work for themselves or their families, a slight decline from the previous year but a significant six-percentage point jump compared to 2019. Additionally, 11 percent stated a preference for non-profit organisations.
Sunil John, President of MENA, BCW, and founder of ASDA’A BCW, highlighted the importance of supporting young entrepreneurs, stating that while their eagerness to start their own businesses is encouraging, it also reflects the challenges many face in securing stable employment. Policymakers and the business community are urged to provide greater support to young individuals venturing into entrepreneurship.
John also emphasised the positive trend of economic diversification in GCC states, which is shedding a new light on the private sector. This shift is seen as promising for the long-term sustainability of the regional economy and could potentially offer job opportunities for Arab youth beyond the Arabian Gulf.
ASDA’A BCW plans to release further insights in the coming weeks, covering themes such as personal identity, aspirations, lifestyle, climate change, mental health, and gender rights.