Hit hard by plunging oil prices, Saudi Arabia needs to muster resilience. But labor market reforms, leaps in gender equality, and a boost to the country’s private sector could help carry the kingdom through hard times ahead.
With the energy sector making up some 40 percent of Saudi Arabia’s GDP, the world’s top oil exporter has managed to stay afloat despite the impact of a more than 50 percent drop in oil revenue, plunging prices far below the average of around $100 a barrel that the country enjoyed before mid-2014.
The Saudi government has in response started drawing down its foreign reserves through a combination of heavy state spending and hefty private sector boost.
But in a country where people are accustomed to handsome government salaries, ample vacation, and foreign to private sector ventures, while a gender equality gap still holds back women from entering the job market in significant numbers, the steps might not be enough.
The pace of change in Saudi Arabia appears sluggish to outsiders, but the kingdom argues that a slow step-by-step approach is the only way to navigate competing liberal and conservative forces.
Still, significant steps have been made. Women in Saudi Arabia are registering to vote for the first time in history this year, more than four years after the late King Abdullah afforded them equal voting rights. They will be allowed to vote in the upcoming municipal elections this December and can also run as candidates.
But it has yet to be seen whether this path will be maintained by King Salman, who ascended to the throne at the start of the year.
For now, Venture features two Saudi women entrepreneurs that have demonstrated remarkable success in growing businesses that, despite the difficult environment, have reached local, regional, and global economies, and set an example for other women in the region.
The Queen of PR
Sarah Al Ayed
Cofounder and partner of Trans-Arabian Creative Communications
When Sarah al Ayed joined her brother Mohamed in setting up a Saudi public relations agency back in 1998, she doubted it would lead to a post-university career.
But almost 20 years later, TRACCS, Trans Arabian Creative Communications, has grown into one of the largest public PR agencies in the region with a team of 200 employees working across 13 markets. The agency has worked with many leading companies operating in Saudi Arabia, and it boasts multinational collaborations with the likes of Coca Cola, Pepsi, Toyota, Jotun and Hilton, in addition to local and governmental entities and banks. Al Ayed has also been ranked by Forbes as one of the most influential women in family businesses in the Arab world .
But this success hasn’t come easily. When first starting out, al Ayed said the lack of a mature media and communications sector in Saudi Arabia proved a big challenge.
“Back then PR was widely misunderstood or underutilized by those that understood its role and significance. When not perceived as a meet and greet service, PR was referred to as the step-sister or a cheaper form of advertising,” al Ayad told Venture. “The first hurdle to overcome was changing the mind-set of the public and private sectors and the PR industry itself; basically the biggest client of the PR industry was the industry itself.”
It was this glaring gap in the market that TRACCS set out to fill.
“From the very beginning our main focus has been, and continues to be, highlighting the true essence of communications, its importance, and the change that it can bring about when executed in a strategic, intelligent, and innovative manner,” she said. “As part of our commitment to the industry, we have worked towards institutionalizing public relations in the market with a strong focus on social responsibility amongst other strategic communications services for clients.”
Al Ayed said the business community in Saudi Arabia immediately understood the services TRACCS was offering up.
“The need for the PR industry definitely existed, with several leading Saudi companies and multinationals waiting on the fringes for the industry to mature and proliferate within the market,” she said. “When we started, the industry comprised of very few local PR firms with the majority being international companies with only representative offices in the market. But over the past few years, Saudi Arabia has witnessed tremendous growth and evolution within the communications industry.”
But al Ayed said it wasn’t just the lack of a mature PR industry that was challenging— she also had to overcome the difficulty of being a woman in the country’s workforce. “It was challenging because the work structure and atmosphere were not the way they are today,” she said. “Many changes have happened since then. Luckily, TRACCS happened at the right time for me, when the country was beginning to liberalize and become more open to development. Many opportunities were created back then that enabled women to join the workforce and that was based on governmental initiatives.”
Al Ayed said that the breakthrough moment for businesswomen in the country was the establishment of the first committee for women in the Saudi Chamber of Commerce, where she was a member in the early 2000s.
Since then, she said many walls have been broken down. But she stressed that the advancements that Saudi women have achieved were on their own terms. “We cannot apply what is happening in Saudi Arabia to what is happening in the West,” she said. “It is all about understanding diversity and embracing it, implementing things that fit in our culture. It is about how we take these challenges and turn them into opportunities. It is not only about the negative perception that Western media has prompted about this part of the world.”
Al Ayed has come a long way, but she’s determined to keep pushing forward. She has her sights set on higher ground, hoping to spur more change in the country. “My main goal at the moment is to engage women, to attract them into the workforce, and tackle the challenges that prevent them from it. If we fix those challenges, it would be much easier for everybody.”
The Dealer of Good Deeds
Lujain Al Ubaid
Co-founder and CEO of Tasamy
Lujain al Ubaid’s desire to help people began early in life. “I have engaged in a number of social activities since I was a child,” she said. “Together with my mother, we used to visit orphanages and homes for the elderly around Riyadh on a weekly basis. It was something I felt I had to do.”
With this sense of charity instilled from such a young age, it’s easy to understand why al Ubaid decided to become a fully-committed social entrepreneur. “I worked in a few jobs like training centers and PR companies only to understand that impacting the society was the goal I wanted to reach,” she said.
Al Ubaid is now one of the most prominent social entrepreneurs in Saudi Arabia. In late 2011, she established Tasamy, an umbrella volunteer network where people can gather to establish sustainable projects that encourage and empower youth and social entrepreneurs alike through the support of both private and governmental sectors.
At the end of 2014, Tasamy launched Kun, a 60-day program for young people to design and implement social initiatives to improve their communities. Kun’s applications spanned the United States, Canada, Algeria, Palestine, Jordan, Kuwait, the UAE, and, of course, Saudi Arabia.
Dozens of pitches for social projects showed up on the network’s website every week, where they were viewed by a judging panel who decided what ideas were worth implementing. Innovation and sustainability are the network’s main focus.
However, al Ubaid said social entrepreneurship is still being hampered by red tape, an absence of technical support, and an uninformed public. It also remains under the government radar and has no formal recognition as a sector in its own right, depriving it not only of key investments, but also of incentives like tax breaks.
Furthermore, sandwiched between the for-profit model and the not-for-profit sector, social entrepreneurship aims to enrich the community by infusing social consciousness into their economic goals. But this makes it harder to find business partners willing to support out-of-the-box sustainable ways of improving the lives of the population.
“We are doing very well so far, though it is very difficult to explain to possible partners what Tasamy does since we are one of the few organizations empowering social entrepreneurs ,” Al Ubaid said. “We are now in the process of closing a deal with an international organization focused on social entrepreneurship and a governmental entity to spread this model throughout the GCC countries and the Middle East.”
But Tasamy has another plan in its pipeline, including a fellowship program to equip social entrepreneurs with the skills they need to establish their not-for-profit or for-profit social enterprises. The program hasn’t been activated yet, but al Ubaid hopes it will start early next year.
Al Ubaid said that being a woman in conservative Saudi Arabia hasn’t been an overriding obstacle for her in developing Tasamy. “Being a young entrepreneur was the difficult challenge,” she said, lamenting the country’s long red tape and the lack of innovation and support for young talents.
But she looks at the future with confidence. “We want to establish an ecosystem for social entrepreneurship and entrepreneurs in the region and build strong partnerships to enable new programs, which, in turn, will be a magnet for new projects in the region, solving social problems and impacting the lives of many.”
By Elisa Oddone, Originally published on Venture