Entrepreneurship: A New Era for Bahrain's Economy?
| Author | Areije Al‐Shakar |
| Published date | 01 September 2017 |
| Date | 01 September 2017 |
| DOI | http://doi.org/10.1111/1758-5899.12483 |
Entrepreneurship: A New Era for Bahrain’s
Economy?
Areije Al-Shakar
Bahrain Development Bank
Abstract
The entrepreneur eco-system has drastically evolved over the past seven years in Bahrain. From government driven initiatives
focusing on building awareness and various grants offered through Bahrain’s Labor Fund (Tamkeen): A whole cultural move-
ment towards a more entrepreneurial society has uncovered from both the public and private sector perspectives. It is now
the time where we can see that both the public and private sector are aligned as to the importance of building an entrepre-
neurial economy building up Bahrain’s economy to reach various strategic national goals, such as the Economic Vision 2030.
Key pillars of an entrepreneur eco-system
We can identify that an entrepreneur eco-system consists of
various key pillars that can support a startup ‘friendly’envi-
ronment. These key pillars include education, funding, men-
tors, corporates, investors, policy and regulation, as well as
community. So within, such a startup eco-system we need
to ensure that all these elements are present in order to
have an environment that is self-sustainable to drive innova-
tion and entrepreneurship. Over the past ten years, we have
witnessed in Bahrain a lot of focus on building awareness
and integrating within both public and private secondary
school education, entrepreneurship and how to start a busi-
ness, and a lot of focus on creating new support schemes
for entrepreneurs and SME businesses. Bahrain Development
Bank (BDB) was established back in 1992 to offer finance,
startup and SME loans and is now completing its 25th year.
This falls under the pillar of funding, which is important for
companies with some track record, but if we are trying to
focus on spurring innovation, debt finance solutions are not
always the right choice nor do these entrepreneurs become
eligible for such funding. Other than that, looking back
seven years ago, not much else was available to support the
other key pillars for a startup eco-system in Bahrain, which
sparked a lot of innovation within government and semi-
government entities to support the overall national aims for
the economy.
Supporting small and medium-sized enterprises
BDB started to offer further support to small and medium-
sized enterprises (SMEs) commencing with basic advisory on
business plan support, various general workshops on
entrepreneurship, alongside investment options for equity
investment for SMEs that are looking to grow and scale.
However, that still neglected the element that access to
funding was still not ideal and the other pillars such as
mentoring, investors, policy and regulation, and corporates
were still not fully developed and in some cases non-exis-
tent. It is with these market failures, such as funding gaps
that are present that showed weakness within the startup
eco-system that led BDB to look at various avenues to help
support these pillars. With funding, startups that grow and
then fall under the SME sector undergo a funding lifecycle
starting from pre-seed to seed funding then over to early-
stage/startup funding before they arrive at more advanced
funding stages with Series A and Series B.
During the pre-seed, seed, and early stage, it had become
evident that very few options are available to startups or
entrepreneurs to avail, if any. They could look for friends
and family, look at bootstrapping, but ultimately the angel
investor culture was not too prevalent nor were there any
accelerator programs or venture capital funds that focused
at such stages. That became one of the areas that required
attention. Furthermore, for these startups to thrive, they
require the expertise to help support them through mentor-
ing, another area that also needed consideration. Alongside
that, we recognized as an organization that bankruptcy laws
were not favorable to the entrepreneur or startup, which
could also stifle innovation and entrepreneurship. So, focus-
ing on improving policy and regulation was also something
that needed enhancement. The community is a key element
for a startup ecosystem and what was concluded that it was
fragmented and action needed to take place to unify it.
With all those identified areas, BDB recognized a need for a
holistic platform for entrepreneurs and the necessity to work
closer with the regulators and policy-makers to ensure that
everything was aligned from a national perspective and
then allow the private sector to thrive.
Funding as a major challenge
A bigger spotlight on the most voted challenge for startups,
funding: the options in Bahrain were mostly focused on
©2017 University of Durham and John Wiley & Sons, Ltd. Global Policy (2017) 8:3 doi: 10.1111/1758-5899.12483
Global Policy Volume 8 . Issue 3 . September 2017
418
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