Saudi Women are Driving the SME Boom in the Kingdom

Saudi women owned and operated companies long before Vision 2030-outlined socioeconomic reforms came to pass.

However, the sector is expanding and accelerating due in large part to the changes that come with the Kingdom’s opening up to the outside world. This is mainly because a growing number of female entrepreneurs are driving this development.

As the Kingdom continues to transform both economic and social levels, introducing a multitude of new institutes, ministries, and mega and giga-projects, a significant portion of its transformation is attributed to the growth of the private sector.

In February this year, the non-oil element witnessed its highest growth since 2015. With the Kingdom’s Purchasing Managers Index hitting 59.8, up from 58.2 in January.

Women are increasingly leading small and medium-sized businesses in Saudi Arabia, driving the country’s private sector growth.

Saudi Women Entrepreneurs

“I established my consultancy Niche Arabia over 13 years ago. And now I am investing in female-owned start-ups.” Marriam Mossalli, a Saudi lifestyle editor, journalist, and founder of communications agency Niche Arabia, said. “I have been able to witness first-hand the difference in the entire process. From legal registration to even human resources and training support, through programs like Hadaf and Tamheer,” she added.

Mossalli underlined that the Kingdom is seeing a growth in women not just in the workforce (up from 17.4% to 33.6% in only the previous five years according to Saudi Arabia’s General Authority for Statistics), but also in the realm of business.

“Whether it’s in tourism or technology, there are many sectors that are attractive to women, and we are seeing more women take on the entrepreneurial role,” said Mossalli, adding: “Women-owned companies in the Kingdom have increased by 60 per cent in the past two years.”

Mossalli says she’s focusing on the next wave of “conscious consumers coming out of Saudi Arabia from Gen Z,” and as such in September she will invest in two female-owned businesses that focus on clean beauty and fashion.

“I am investing in women,” states Mossalli. “What is exciting for me now is being able to invest in the next generation.”

According to the Brookings Institute, the female labour force participation rate in Saudi Arabia jumped 64 per cent between 2018 and 2020. There is hardly anywhere in the world growth of this size.

According to the report, between 2018 and 2020, the labour force participation rate of Saudi women. That is to say, those working or looking for work, rose from 19.7 per cent to 33 per cent.

Historically, the labour-female labour force participation rate for Saudi women has been low. However, it increased substantially due to reforms providing more freedom and business incentives to women under Vision 2030.  That is actively supporting female SMEs through various programmes.

A report in 2022 by Monsha’at, the Kingdom’s official SME general authority 2022, revealed that 45 per cent of such businesses are now led by women in Saudi Arabia.

“This is concrete proof that women are leading the SME growth in Saudi Arabia and in multiple sectors from retail to the food industry and tech,” Honayda Serafi, an esteemed Saudi fashion designer, said.

Serafi, who launched her eponymous fashion brand in 2016 and focuses on poet-a-porter and couture lines, sees her brand as a way to empower women both psychologically and also to start their fashion businesses.

Serafi recently designed the gown worn by Saudi Rajwa Al Saif, Jordan’s future queen.

“My journey was a challenging one,” Serafi said. “When I launched my brand in 2016, the Kingdom was still not yet on the line of growth of Vision 2030. I struggled a lot because back then the Saudi fashion industry lacked everything — from raw materials to technical information, guidance, support etc … so I started from scratch looking for external consultancy, for suppliers internationally.”

After some trial and error, Serafi began making seasonal collections to display in Paris. They helped the company gain worldwide recognition.

“From a marketing standpoint, my story piqued the public’s curiosity greatly,” she said. “I am the first Saudi woman to have created an international ready-to-wear brand and to have dressed A-list celebrities in Hollywood. When I talk about the mission of the brand to empower women, I am one of those women.”

From all corners of the Kingdom, women are becoming the driving force behind Saudi Arabia’s growing SME sector.

In Baljurashi, a city in the Al-Baha region, Sharifa Algamdi has transformed her traditional home into a boutique hotel.

A retired mathematics professor, three years ago she set out to restore her family’s home, built around the turn of the century.

It was easier to refurbish it and build her business after the reforms of Vision 2030 began being implemented. As it allowed her to more freely interact with other men to buy fabrics and other goods for the home, as well as hotel guests.

Both Mossalli and Serafi highlight that the government’s support for the expansion of the private sector has resulted in the establishment of a comprehensive accelerator organisation. That includes incubators, accessible data, money, and lending facilities to help develop various industries in the Kingdom.

Serafi is clear that the Saudi Fashion Commission — established in February 2020 — and the Ministry of Culture have led the growth of the sector. “I have been myself part of that supporting system providing mentorship, guidance and practical assistance to the small and emerging brands,” says Serafi. “And now the announcement of the first Saudi fashion week that will not only showcase emerging Saudi brands but also involve other industries in the Kingdom for the production of that big event.”

Saudi women are incredibly powerful

Ranyah Seraj, who is half-Saudi, and half-Scottish, launched her platform 6th Dimension of the Arts in Riyadh in 2021. A consultancy focuses on art advising, concept creation and design catering to businesses and individuals.

“Women in Saudi are super in charge, but they have been for ages,” Seraj said.

Seraj had a previous company that she launched in 2009 before the reforms were made. But it was an entirely different process then.

“It was one of the first companies as soon as Saudi made it applicable for women. To have their registered commercial registration.” She explained, adding: “However, you still needed a male component with you in your company. Even if it was registered as a sole trader.

“You required your father, your brother, your son, your husband’s name on that — that has been abolished since then.

“Everything has changed significantly. There are hundreds of thousands of opportunities that are now available to Saudi women.

“It is a fantastic time for Saudi women now to lead the way in entrepreneurship and business.”

How does the increasingly female driving force of SMEs in Saudi Arabia compare to its Gulf Cooperation Council neighbours?

Saudi women argue that the fundamental distinction is that they invest in and build their brands. Rather than depending on foreign investors.

As Serafi states: “Vision 2030 has set goals to achieve growth for and by the Saudi citizens. This signifies that the Kingdom is building its economy around its domestic businesses. Rather than solely, it is relying on foreign investors in Saudi Arabia.

Small and medium-sized enterprises (SMEs) are facing financial, technical, and technological pressures.to grow beyond the Kingdom and be competitive internationally.”

The model fosters women’s empowerment and Saudi pride and identity at the same time. Working with international investors while preserving Saudi identity is the strategy. Women are a big part of this push.