GRM 2010 GRM 2011

Abstract Details

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Globalization and Disruptive Economic Change:The Increasing Importance of New Paradigms in Business Education Programs
Paper Proposal Text :
The steadily mounting impact of Globalization on GCC national economies will have enormous albeit uneven impacts on the economic growth and job opportunities in individual GCC countries. Led by declining revenues from the oil/energy production sector, intensifying pressures on increased efficiency of the public sector has led to sharp contraction of state related employment. At the same time, market-driven policies such as the Saudi 2030 Vision Plan are encouraging greater Direct Foreign Investment in an effort to increase national economic competitiveness. This policy will necessarily reduce the profitability of private (especially family-owned) companies as they must compete with more efficient and sophisticated foreign corporations with global supply chains and logistical infrastructures. Like the public sector, this will result in the consolidation of commercial activities, outsourcing, and short-term decline in domestic employment. In fact, most likely it will increase the demand for ex-pat employees with higher skill sets than native-born workers. In this scenario, how will employment be generated to compensate for the loss of these jobs previously performed by GCC citizens? How should new business education programs be developed to guide the next generation of new GCC business leaders and entrepreneurs? What are key differentiating factors in this new “Global” business era that should be incorporated into next generation GCC business and entrepreneurship education?

This paper is based on a 2016-17 national survey (N=3000) of college educated Saudis between the ages of 19 and 27 years old. The multi-stage sample design includes the Metropolitan Areas of Riyadh, Jeddah, and Dammam/Khobar. Females (N=2,250) were oversampled compared to Males (N=750). Respondents were not selected based on their interest in becoming self-employed or business owners. Two key findings of the Saudi survey are instrumental to the debate over the importance of transforming business/entrepreneurial education programs.

First, those interested in initiating business/commercial activities evidence distinctly different motivations with different business skill requirements. Indeed, three distinct groups of entrepreneurs are empirically identified with unique attitudinal propensities for entrepreneurship: (1) “Samurai,” committed business innovators with high leadership propensities whose focus is visionary change in their industries; (2) “Traditional,” small to medium enterprises (SMEs) with medium leadership propensities that must become more efficient competitors in the Global economic era; and (3) “Reluctant” entrepreneurs with weak commitment to self-employment and low leadership potential while seeking better employment opportunities. Each group has very different skill development needs and business leadership potential. They range from (a) industry pioneers like a Elon Musk to (b) local restaurant chains that embrace social media technologies to (c) laid-off/retired workers who seek small consulting or delivery contracts while pursuing more desirable salaried employment. In sum, different “types” of business people need different business skill sets and customized education programs.

Lastly, except for the smallest group of Samurai, the data suggests major differences by gender across “Traditional Business” and “Reluctant Business” groups in regard to entrepreneurial motivations and economic sector concentration. For example, Males are motivated overwhelmingly by earning money (partially due to saving demands for marriage dowries) while Females are motivated by personal empowerment, quality of services/products, and contribution to the “new” Saudi economy/society. Not surprisingly, Females have much less direct business-related experience than their Male counterparts which may explain their greater attention to their business education programs. Males are more likely to seek business funding from family and external loans/grants from banks or government while Females are more likely to pursue self-funded strategies due to the low capital requirements of their commercial ventures. This suggests higher job turn-over in entry-level jobs that are performed primarily by Females than by Males. Interestingly, the expected ability to save sufficient money to start business ventures declines monotonically by age—especially among Males. Furthermore, Males are less likely to pursue business ventures outside of traditional construction, manufacturing, and oil-related services whereas Females view their commercial business future in nontraditional service sector. Hence, economic diversification away from the energy sector will be driven by Female entrepreneurs that will require different education programs and business skill sets.