Saudi approves new SME strategy, but pundits say funding alone won’t scale small businesses

The measure of success for Saudi Arabia’s new SME strategy: How many small companies become medium-sized ones able to hire, scale, and export, two consultants tell EnterpriseAM. The Cabinet approved a national strategy for SMEs and entrepreneurship this week, according to Umm Al Qura. “The real economic value begins when a small business becomes a medium-sized enterprise, and eventually a company capable of scaling, hiring, and exporting,” human capabilities and talent management consultant Sahar Al Samdany tells EnterpriseAM.

What’s in the box? The new strategy includes 13 initiatives to improve SMEs’ access to finance and markets, SPA quotes Commerce Minister and Monshaat board Chairman Majid Al Qassabi as saying. It also targets more than 500k direct and indirect jobs and aims to put the Kingdom at the top of the Entrepreneurial Skills and Knowledge Index by 2030, according to Al Qassabi. The strategy feeds the target of lifting the SME share of GDP to 35%, and should unlock investment prospects and strengthen competitiveness, the Investment Ministry said.

The capability gap: “Financing alone is not enough; without the right human capabilities in areas such as finance, marketing, data, technology, and innovation, it risks becoming temporary liquidity rather than a tool for expansion,” Al Samdany says. The shift she wants is from businesses seeking funding to businesses equipped to compete, grow, and reach markets.

Three things have to change: Financing channels need to match where a business is in its life cycle, from startup through expansion; market access needs SMEs plugged into government procurement, large-company supply chains, and export markets; and firms need stronger financial management, talent, data, and digital systems to scale, SME development and franchising consultant Ali Al Ghadeer tells us.

Where the growth comes from: Both point to technology and AI and to tourism. Al Samdany adds education and training, creative industries, healthcare, professional services, and digital commerce. Al Ghadeer adds logistics and e-commerce, and manufacturing and local supply chains. Neither expects traditional sectors to carry the 35% target on their own.

New registrations don’t count for much, though, if a large share of these businesses fold within a few years, Al Ghadeer says. The metric that matters more is how many move from idea to establishment, stability, growth, and expansion, and eventually compete in larger markets. On Al Samdany’s reading, that means the next phase has to pair funding with the knowledge, skills, and networks to use it — and the whole thing turns on how fast the 13 initiatives become something a business can actually access.