Social enterprise to target youth unemployment in Saudi Arabia

By Elizabeth Dickinson 10 May 2017

Young men in Saudi Arabia. Photo by: Stephen Downes / CC BY-NC

RIYADH, Saudi Arabia — It is hard for Haya Al Asimi to hide her excitement as she slides into a corner of the Four Seasons Lobby chatting with college friends. They rehash stories they’ve heard during a morning spent discussing youth and social impact; they plot their own future success. Over coffee and za'atar-spiced croissants, they imagine a world in which the boss dishes out goals rather than giving orders.  

Many of Al Asimi’s peers will graduate drearily, entering a job market that leaves 30 percent of Saudi youth unemployed. But this 21-year-old marketing student sees only possibility. She doesn’t want the sort of secure, well-paid government job that more than 80 percent of employed Saudis now hold. She wants to work at a startup.

“As one of the young generation, I love to have impact,” she says. “I would love to make someone smile, or have achieved the goals of the organization I work for.”

Across Saudi Arabia, a growing number of millennials such as Al Asimi are trying against the odds to do just that. Social enterprises are cropping up, from health care to education to youth empowerment. They face uncertain government regulations, an economy dominated by a few big players, a skeptical older generation and a society used to oil money. Many will fail, but some just might work.

The number of young jobseekers wanting to have an impact could force systematic changes in government regulation and thinking. Saudi Arabia has just begun what is planned to be a massive economic transformation, moving the country of 31 million from petrostate to knowledge economy. Entrepreneurships and startups are buzzwords, but they are also practical answers to many of the challenges this society faces.

The price of oil dropped precipitously in 2014, leaving government revenues strained. Someday not far away, the state may not be able to support the social net that has helped raise Saudi Arabia’s performance on a range of development indicators, from education to infant mortality to life expectancy.

Social enterprise may be among the most important vehicles to ensure that the progress of the last decades isn’t lost — and that more is made. The sector may also offer a window for collaboration and learning from organizations across the globe that doesn’t exist today.

Social challenges

Saudi Arabia is among the richest countries in the world, but many of its challenges mirror those of the broader Middle East. Young graduates see a dearth of economic opportunity, just as the government is struggling to keep up a safety net that has subsidized everything from school to electricity to health care. More and more families are relying on two salaries to get by.

Youth and female unemployment, in particular, stand to jeopardize social gains in the decades to come. Today, more than one-third of job-seeking youth can’t find work. Among women, unemployment stands at 21 percent — likely an underestimate, as females only recently entered the workforce en masse, and many more are likely to in the coming years.

Q&A: Hult Prize CEO on social enterprise in the Middle East

Conditions in the Middle East are ripe for fostering social enterprises: A host of social challenges that government can't meet and a burgeoning youth population full of energy but facing dire employment prospects. Devex talks to Ahmad Ashkar, founder and chief executive officer of the Hult Prize Foundation, about what's needed for the sector to take off in the region.

If nothing else changes, the unemployment crisis will grow. Some 70 percent of Saudis are under the age of 35. For decades, the Saudi government absorbed most job seekers by expanding its bureaucracy. But faced with shrinking fiscal revenues and a rising population, the government’s economic transformation plan, known as Vision 2030, now aims to curtail hiring and benefits for the public sector.

That is combined with a growing frustration here among many young people with business as usual. Al Asimi, for example, interns for a small startup called The Work Hub — a space where freelancers can rent or use offices temporarily. She expected to be taking orders from the boss to bring coffee and do menial tasks.

“Instead, they share with me their goals and they say, ‘OK, you reach it,’” she says. “That is amazing. They give me the position and at 21 years, I am a marketing specialist. These are the kinds of companies that I want to work for.”

Government support, government hindrance

Policymakers now admit that startups will have to be part of any successful economic reform. Vision 2030’s strategic objectives include boosting entrepreneurship, including through a planned $48 million in incubators and accelerators for startups, according to the document.

Nonprofits are also targeted for growth. Just five years ago, nonprofits didn’t officially exist; there was no process to register a not-for-profit organization. Now, Vision 2030 aims to lift the sector’s contribution to the gross domestic product up to 5 percent, from 1 percent now.

Youth themselves may be the ones most likely to link that entrepreneurial mentality to social good. At the UNESCO NGO Forum in Riyadh on May 3 and 4, where Al Asimi met with her friends, hundreds of Saudi students and recent graduates spoke about a generation looking to make change.

“It’s a huge untapped market,” Hayat Al Sindi, a former member of Saudi Arabia’s advisory parliament, the Shura Council, told Devex. “You make them part of the solution, and they are really going to be true change agents ... Imagine the force of that in society.”

Despite rhetorical and even financial support for social enterprise, however, the incentives still don’t line up, according to the Hult Prize Foundation Chief Executive Officer Ahmad Askhar. It can cost thousands of dollars to start a company — far more than most budding social entrepreneurs can muster. If they do find funding, many sectors are dominated by just a few key economic players.

Socially, too, all the incentives push young people toward more traditional careers. “You have a culture here where not only in entrepreneurship not promoted, but failure is not accepted,” said Ashkar. “We have more engineers and doctors coming out of the region than anything else, and they’re the traditional jobseekers. A medical student or engineer is not wired to create companies. We need an entire system overhaul.”

A new model for social enterprise

Down the hall from where students mingle, Mazen Rakagni explains his plan to become the next successful entrepreneur. His startup team, calling themselves Limitless, offers a new model for how social enterprise might work in a government-dominated economy.

Limitless began with a challenge. In 2009, Rakagni’s grandmother was hospitalized and urgently needed a blood transfusion. The local hospital didn’t have a match, so the Saudi student starting messaging his friends to see who could donate. “I didn’t think this was effective,” he recalls now. He thought to himself, “Why shouldn’t I find a solution to this?”

The idea simmered for a long time. Rakagni imagined a platform that could connect doctors and patients with blood donors universally, getting blood where it was most needed at the right time.

Q&A: Saudi nonprofit MiSK paves the way for youth

Saudi Arabia's Prince Mohammed bin Salman is the country's deputy crown prince and architect of a massive economic reform program. His personal foundation, focused on youth issues, builds ambitious partnerships with blue chip organizations across the globe. Executive Manager Shaima Hamidaddin spoke to Devex about what's next.

It was only in late 2016 that he had the chance to build his idea at a hackathon hosted by one of Saudi Arabia’s most well connected nonprofits, the Mohammed bin Salman Foundation, known as MiSK. The theme was the medical internet of things, says foundation Executive Manager Shaima Hamidaddin. “We had invited the Ministry of Health to this hackathon merely as observers, and [Limitless] immediately caught their attention.”

Today, Limitless is in negotiations with the Ministry of Health about the future of their app. Government support will be vital. It’s the Ministry that will be able to require all doctors to use the app, and to assure the quality of the data. Rakagni says his team is working to decide whether to come fully under the Ministry’s umbrella or work independently, granting a license to the ministry for use of the application.

Hamidaddin describes Limitless as an example of how the nonprofit, government, and entrepreneurial sectors can work in synergy: A social enterprise, incubated by a foundation and now linked directly to government.  “Not only is it something that will have impact on the economy — we’re actually saving lives with this application.”

That may be a workable model for the region, says Askhar. Social enterprises in the region need champions, often in government, he said. “I always ask [entrepreneurs], who wins if you’re successful? If the answer is this minister, this guy, then go get those guys into your game plan now.

“It’s a different way to do entrepreneurship than in the West, but any good entrepreneur can unlock the magic.”

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About the author

Dickenson beth full
Elizabeth Dickinson@dickinsonbeth

Elizabeth Dickinson is associate editor at Devex. Based in the Middle East, she has previously served as Gulf correspondent for The National, assistant managing editor at Foreign Policy, and Nigeria correspondent at The Economist. Her writing also appeared in The New Yorker, Wall Street Journal, New York Times, Politico Magazine, and Newsweek, among others.


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