Salvatore Zecchini Chairman OECD WP SMEE

Most governments are trying to promote entrepreneurship and SMEs The MENA region is no exception In Saudi Arabia it is considered by government as a necessary route to diversify the economic system, to spur innovation and to expand job opportunities for Saudis

 Simplification of procedures to start a business  Diffusion of business incubators and business centres  Funding of industrial zones  Promotion of SME participation in value chains  Labor training programs  Promotion of links with universities and research centers  Financial assistance through tax preferences, grants, credit guarantees and subsidies, soft loans, “private equity” investment, incentives to banks to lend to SMEs, public procurement 3

Government programmes to facilitate SME access to financing ( ) Source: Country Responses to the OECD WPSMEE Questionnaire to Policy Makers on the Impact of the Global Crisis on SMEs and Entrepreneurship Financing and the Policy Responses, follow-up launched November 2009 and publicly available information.

 Public credit guarantees  Direct public funding  Interest subsidies  Labour training centers  Business incubators  Mentoring and tutoring services  Marketing assistance  Export promotion  Support to research activities

Still, widespread sentiment that in both OECD and MENA countries more has to be done to promote entrepreneurship and expand the SME sector. OECD experience is useful for policy makers, but there is no single OECD model that fits all countries. There are instead some common findings and outcomes stemming from various policy approaches. First, know the hurdles and shortcomimgs SMEs are facing in your counry to start and expand a business.

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Global Competitiveness Index

11 Source: S.Hertog, Benchmarking SME policies …

1. To expand the supply of potential entrepreneurs; 2. To remove barriers to the birth of enterprises and provide support to new entrepreneurs 3. To promote conditions allowing small firms to take roots and expand to reach appropriate scale to compete in the market place.

 Deal only with one side of problem and not all of them  Bankruptcy law strictness  Policy fragmentation, inconsistencies and lack of coordination  Shower all SMEs with plenty of aid measures

Two avenues have been followed : 1) Develop a favourable attitude among people 2) Invest in education and training programs

 Simplify and streamline administrative requirements and procedures  Look at EU Small Business Act and Think Small First approach  Level the playing field in market place  Expand supply of skills  Improve the legal environment  Create a bridge between research centers and SMEs  Promote networking, participation in supply chains and innovation chains

 Remove regulatory and bureaucratic obstacles to business creation and expansion in a competitive market.  It is not just a question of facilitating business entry, but to make it easier for small firms to expand, invest, innovate and compete.  To this end, the EU Small Business Act is a model to be heeded, since it is bringing about a true revolution in the way governments shape their policy making at all levels. 19

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 Support should be tightly focused on the SMEs’ needs,  Be demand-driven and managed together with business associations,  Should leverage the national educational system, especially the technical universities and vocational training institutions through joint programs, incubators and voucher schemes.  Government funding of “internship programs” at universities and management institutes for small entrepreneurs,  Funding for “Hiring programs for new graduates”,  Programs to engage students for a work experience in small firms.  An active gender policy to bring the human capital represented by women to contribute to build a strong and competitive enterprise-based economy. 24

 Holistic approach within government and coordination mechanism  Systematic dialogue with SME associations  Carry out periodic ex-post evaluation of support programs and individual support measures