Unlocking Oman’s Entrepreneurial potential

Unlocking Oman’s Entrepreneurial potential Previous item Make a fortune out of the...

The global economic situation looks extremely bad and gloomy. However, thanks to the knowledge age, for the first time in history, we as individuals can change this gloomy picture and shift it towards our advantage. All we need is proper planning, human development and will. How? This is what I will elaborate on briefly.

Unemployment, a global economic problem

The unemployment is not a problem facing Oman only, but the whole world including the Middle East. i.e. there is a very high rate of unemployment, with the number of job seekers globally (that is, those who are unemployed in a conventional sense and those in fragile employment) reaching approximately 1.6 billion people.

Today, around one in four Arab youth are unemployed, which is the highest rate in the world. In fact, as it is mentioned in (FIKR 12 DUBAI 2013) the Arab world faces the critical challenge of creating 80 million jobs by 2020.

The Bright Side

However, the globalization and the knowledge age has granted us golden opportunities to overcome these problems and to become successful entrepreneurs. Because on the other side the whole globe is facing a significant shortage of skilled talents continuously. i.e. In the Manpower Group’s tenth annual Talent Shortage Survey, 40% of global employers reported a shortage of skilled talent shortage in 2016 – marking an eight-year high – while the deficit in skilled talent in the business service and financial service fields in the Middle East will grow by 30% and 32% respectively over the next 5-10 years.

Moreover, this age by its nature is the age of small companies and individuals. In fact, soon we will see that the global economy is dominated by small and middle-sized players. That is why, unless the big companies reorganize themselves as a collection of small companies, they will just continue to go out of business.

Prioritizing SMEs is one of the most vital ways for Oman to face current economic challenges. We, the community and the government, need to change our view toward SMEs from being poor companies that need our support and help to succeed, to one of the most important and valuable national resources that we have. That, if invested properly, would help us all at the national level to escape the economic bottleneck.

Globalization of Jobs and Flexibility

The uncertainty and fear of the global economic environment, the intensification of competition, the trend for globalization and the proliferation of tools, resources and means of communication are all driving the steady growth of the so-called ‘Gig economy’.

The gig economy is an economic environment based on temporary or fixed-term jobs and assignments. It’s formed of enterprises and individuals hiring the services of freelance workers on a short-term contractual basis.

Put simply, this means that small enterprises and freelance workers can choose between jobs and projects from around the world. Employers can choose the best freelancers for specific projects from across the globe, at the best prices and with minimal risk.

The trend towards the gig economy began several years ago and is expanding rapidly. One Intuit study predicts that 40% of the US workforce will be participating in the gig economy by 2020.

One of the most important drivers of this rapid growth of the gig economy is global online freelancing platforms. These platforms connect business owners, individuals or institutions with seekers of work – individuals or institutions – from different disciplines, at different levels, in different specialities and in different parts of the world in an astonishing organizational and administrative framework that transcends political, geographic, temporal and spatial barriers and offers impressive mechanisms for oversight.

So, what do we need to do?

It is imperative to prioritize entrepreneurship as a national goal and encourage entrepreneurial competitions at school and college level. Such skills foster teamwork, creativity, innovation, critical and strategic thinking and the creation of financial stability. Further, such careers facilitate nation-building and the ability to market oneself and one’s professional competencies and skills.

Nowadays, the most influential competitive advantage for getting jobs in the world is the quality and efficiency that are driven by human capabilities, specialized knowledge and expertise. Thus, jobs will not be distributed to people in the world equally or by their countries but will be acquired by the most competent individuals worldwide based on their competitiveness and prices, regardless of their nationality or background in theory. 

On the other hand, acquiring competencies is generally available to all individuals at a relatively low cost. The greatest opportunity to succeed is in favour of those who can develop themselves more than others.

For example, nowadays one can obtain an internationally recognized professional degree in any profession such as accounting, engineering, insurance, marketing, human resources, management consultancy or even management and leadership from abroad without being compelled to leave his home country, and with relatively low cost. 

Too good to be true?

Yes, like anything else, even globalization and gig economy has its pitfalls. In theory matters not what is your nationality and background, in reality, however, we find a good deal of examples of how people from different backgrounds and different religions are treated differently. 

One of the most persecuted freelancers are coming from Nigeria, where infamous scams originate, and companies learned that giving sensitive information handling to hands of people they never met and are from far-far away is a risky business. Companies have little grasp on a freelancer living on the second side of the globe and being practically untrackable. 

Furthermore, on contrary happens more and more often internet slavery, where people are forced to work practically for free, are stripped of their employment benefits and are threatened to be fired moment they stop working with a simple excuse. 

“If you don’t want to work, there are thousands who want.”

Companies to maximize profits are willing to go as far as paying several cents an hour with a promise of full-time contract and solid pay that never comes. And as companies have little grasp on a freelancer living half-world away, the freelancer has pretty much the same tracking options to call for his rights. 

Is a gig economy here to stay?

The short answer I want to give you, is yes, and no. It is because simply it’s not for everybody. 

The most likely it is indeed here to stay and that is for a few simple reasons.

The most skilled people, often working in tech, designers, marketers, developers, are often needed in bulk but only for a project and its needs, and then they become redundant super expensive parts of the company. 

How is that different from C-level executives, that are often super expensive as well and are being kept? 

C-levels executives are a few in comparison. Imagine a project that requires 100 of very skilled developers, each going annually for $200,000 (in some countries even more!) for a project taking a year. After the project is finished, 100 “workers” become expensive asset lying around, not being used to its foremost capacity, and money is wasted. Not only in salaries but also in office spaces, accounting department, tax department, and other administration fees, employee benefits (like a cafeteria, all the drinks – and developers love good coffee, gym memberships and more), and importantly devs work equipment. 

The difference between an employee and freelancer only in equipment can reach tens of thousands of dollars. 

So why doesn’t everyone just start with the gig economy and we all don’t live like nomads? 

It is impractical for everyone to be in such conditions. Especially in countries with lower costs of living not highly skilled workers often cannot take a leap and be few months without income (which happens often you change project, but most importantly when you are starting and often have no savings). 

Furthermore, it is impractical for a less-skilled workforce to invest in own equipment and administration, and offer mediocre skills that would earn them only a little bit more than if they would have worked in a company. In developed world this counts a triple, because of there a freelancer is obliged to earn a certain level, that would be very hard to reach with just mediocre skills. 

As in Ukraine, a freelancer has a living cost of $300/month, the same freelancer in France has living costs of $2,000/month and in Norway, it is then $5,000/month. While all 3 freelancers have the exact same skills, if Norveign freelancer would earn $1,000, he would suffer from red numbers and it is a matter of time till he is forced to stop his freelancing. One in Ukraine then lives a very nice life, managing to even save a good deal. 

How is it connected to Oman?

Oman as a country is now in crossroads. With its unemployment soaring, Oil reserves not being endless and new laws and practises being introduced daily, it is on Oman’s representatives to lead a country the right way. 

It will have to decide on its corporace governance regimes, further development of tax policies, policies and guidelines on starting new SMEs in the country  

And establishing infrastructure for all businesses, new and old alike, as it is doing for a few years already. You can read how Oman’s The National Business Centre (NBC), which pertains to the Public Establishment for Industrial Estates (PEIE), organised a Reyooq event entitled ‘Successes and Obstacles’ at Basta Majan Café here. 

Do you want to stay ahead of your competitors? Establish a business in Oman? Or simply learn about Arabic business model? Subscribe to our blog and create your success story today. 

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