25 Jun 2015
Saudi Arabia is trying to diversify its economy away from dependence on oil. Encouraging the populace to build a more vibrant economy, based on entrepreneurial businesses, is seen as a crucial part of this process. However, at present, rather than going into innovative commercial activity, many skilled Saudi nationals tend to work in public sectors such as health and education, with only 10 percent taking up employment in the private sector – something that must change if the country is going to reduce its reliance on its biggest export.
When looking at the history of the Arab world, it is easy to see that entrepreneurship flows through its people’s veins. But that on its own just isn’t enough. As the world’s population grows and our planet becomes a more globalised place, there is a need for globalised standards and education. European CEO spoke with Sultan Batterjee, CEO of IHCC, a leading healthcare and education construction company in the Middle East and Africa, to learn how it is helping prepare young people to become the future business leaders of Saudi Arabia and the world.
The life of an entrepreneur is not for the faint of heart and your perseverance will be tested again and again. The work is long and hard, the sacrifices
How do you think young people should approach entrepreneurship?
The youth of Saudi Arabia should invest in something they truly believe in and have a passion for. They should dare to dream and believe in their vision, build something where there was nothing and not listen to naysayers.
But dreaming is not enough, as they also need to do their homework and have a purpose. Once inspired, do your research, be sure you understand the market and your competitors, be sure you understand the capital costs needed to succeed and be sure you have the team necessary to prevail.
The life of an entrepreneur is not for the faint of heart and your perseverance will be tested again and again. The work is long and hard, the sacrifices are significant. In fact, the life of an entrepreneur is one of setbacks, challenges and failures. It’s a life of falling down and picking yourself back up, but, ultimately, for those that have the vision, the hard work and a little bit of luck, it’s the ultimate high of looking at a successful company and saying ‘I built that’.
Why is it important to have an entrepreneurial culture?
I believe there is a lot of room in Saudi Arabia to help entrepreneurs – one option could be to form a ministry related to SMEs, encourage entrepreneurship, and have more entrepreneurship institutes, universities and colleges. If you look at other countries, like China and the US, SMEs are the largest contributors to employment.
They employ the majority of the population and give back the most to the economies, and the probability of new companies entering the market is higher. If you look at the Fortune 500 companies in 1977 and compare them to now, 90 percent of those companies are not there anymore – they’re all new companies. 80 percent of their assets were tangible assets. Now, in 2015, 80 percent of a company’s assets are intangible, like IT companies. Nowadays, you are much more likely to succeed as an entrepreneur, because of technology, even though competition is higher. Therefore, educating people to be entrepreneurs is the key and major necessity for our region to prosper and grow to unlimited heights.
How does your work help encourage that culture to take root?
Both IHCC and Lifestyle Developers are committed to training and skill development, wherever we operate. We are delighted to have the opportunity of sharing our knowledge and industry experience with the next generation of Saudi entrepreneurs. A great example of that is our recent involvement with Dar Al Hekmah University, where students had the opportunity to visit IHCC and explore their future career possibilities. During the visit, the students worked alongside IHCC’s architects and engineers to learn about the real-life challenges encountered on IHCC’s projects. The group also explored career development opportunities available on major projects in Saudi Arabia and the wider GCC region. The visit came as part of our shadowing initiative, in partnership with the School of Architecture at Dar Al Hekmah University, to allow students to experience architecture and learn about the career opportunities that exist within the sector.
What is the state of the construction sector in Saudi Arabia?
Saudi Arabia has been investing heavily in its construction industry. More specifically, during the last 10 years a lot has been invested in the country’s infrastructure.
As the new infrastructure is put in place, we will see great results in the coming years. Saudi Arabia now has a new structure of power that comes from the younger generation. Many of the ministers are under the age of 40, and we feel that this will positively impact the construction industry and all other industries. They are closer to the younger generation, and feel their needs – whether those needs are related to design, quality, expectations, integration or sustainability.
So, when you mention the construction industry in Saudi Arabia, I can tell you that I believe that Saudi Arabia is going to go through a remarkable Golden Era in the years to come. This will be related to the construction industry, all available industries, and the country as a whole, because we are at the right place, with the right calibre of people, the right leadership, and the right resources.
How do your architectural designs address contemporary challenges?
As a visionary leader, I have great attention to detail. I like to solve problems and identify opportunities ahead of time. Looking into things in the greatest depth affords me an ability to fit the pieces of a puzzle into a complete whole. This business acumen and far-sighted thinking led to the creation of Lifestyle Developers, where we focus on the needs of the young, college-educated professionals who occupy the burgeoning middle-income space.
Forecasting into the future and realising there was no real estate product in the market meeting the housing demands of this vital demographic, I saw an opportunity to change the mentality of people in society by creating a real estate product that places the benefits of home ownership far above renting. People do not have to live in one house for an entire lifetime. Now, as the family grows, they can transition into a larger or more appropriate home. Lifestyle Developers addresses the economics of housing by increasing home ownership and establishing a stronger real estate market of buyers and sellers. By creating a high-quality product that is still affordable for the majority of the population, we have practically tailored a market that will improve the region. I call it ‘the Zara of real estate development’, in reference to clothing brand Zara. Other countries can learn from this model and jobs will be created.
What role does technology have to play in this area?
The construction industry is just one sector that has undergone radical change during the past three decades, as a direct result of new technology and better, smarter ways of operating. Smartphones, GPS systems, home computers, 3D printers; the list of new technology that has made our lives, for the most part, better and easier, just goes on.