How SMEs can help Oman’s post-COVID economy

Story: Gautam Viswanathan

As Oman opens up its economy and gradually eases the precautions put in place to stop the spread of COVID-19, so do new opportunities rise to make it more resilient in future, and reduce the impact of such global-scale events.

While the pandemic has had some economic impact on the country, the Sultanate continues to work towards its long-term view of diversification. Under the current circumstances, this is a move that will generate employment in the short term, and more streams of income in the years to come.

Poised to play a big part in this economic reopening and contribute to its expansion are the country’s small and medium enterprises. To this end, the Sultanate has a dedicated body to grow, develop and mentor SMEs to contribute valuable services and opportunities for growth.

“In Oman, the country realised the importance of what SMEs and entrepreneurs can do to the system, and in 2013, there was an organisation formed, known as the Public Authority for Small and Medium Enterprises, known as Riyada,” said Dr CK Anchan, the founder of World Wide Business House, and an advisor on trade in the country.

SMEs under Riyada are classified under three categories: micro, small and medium. Micro-businesses are start-up companies that have less than five employees and a relatively small amount of investment that is less than OMR 100,000. Small businesses have between six and 25 employees, and have a capital of less than half a million Rials. Medium-level enterprises, on the other hand, have a significantly larger workforce – up to 100 employees – and an investment that is quite sizeable, at OMR 3 million.

“You will be surprised to know that there are more than 32,000 entrepreneurs registered under this category,” he said. “The registration among small businesses is also really encouraging: there are almost 10,000 companies or units registered under this classification. Currently, we also have about 3,500 entrepreneurs registered under the category of medium enterprises.”

“What all this shows is that Oman is really gearing up to develop SMEs, and is showing the world that it does have serious entrepreneurs,” added Anchan. We have more SMEs coming to the table, and are getting more collaborative with the existing economy.”

However, before tying up with organisations (like Riyada) that can help take his business forward, every entrepreneur needs to identify a few objectives his ideas need to meet: what service he aims to provide, how he can provide them, how he will help address or meet the needs of people, and how sustainable his business is likely to be in the future. Learning his market will help answer these questions, and for that, there is no better teacher than experience.To further elucidate this, Anchan shared the story of Conrad Hilton, the founder of the Hilton Hotels and Resorts group, which today has properties all across the world and is one of the best in the hotel business.

“Any entrepreneur, before he sets up his business, needs to understand whether the core competencies required for his business are present within him,” explained Anchan. “He has to gain the experience and knowledge, and has to work with such kinds of companies. Let me give you the example of Conrad Hilton…he used to work with his father in a storeroom. He converted that storeroom into a lodge with 10 rooms, and he’s gone on to create history. Any entrepreneur must first gain experience in his chosen industry, and that is when you are going to excel.”

Many of today’s entrepreneurs are recent graduates, or wish to chalk out a path for themselves after working full-time in the corporate world for a few years. As part of Oman’s efforts to diversify the economy, give people more choices for working, and ensure both companies and people can benefit from the skilled labour present in the country, a plan to allow for part-time work for Omanis and expat workers in the Sultanate is under development.

When this does come through, one of the additional benefits it will have is the ability for entrepreneurs to work on part-time or short-term contracts with companies, presenting a win-win situation for both parties: the entrepreneur learns the skills required to set up his business, the company, a willing worker who is eager to learn and contribute.

This plan, according to Dr Ahmed Al Hooti, the head of economic research at the Oman Chamber of Commerce and Industry, will provide solutions to SME developers who will definitely benefit from the option of flexible work.

“Temporary work will definitely suit the youth, especially those who are fresh graduates,” he said. “They can both work and get some experience and training. Companies, at the same time, could benefit from these employees, and would have a lesser cost to pay because they will be working only part time.

Al Hooti added: “This will be very good for those who want to set up small and medium businesses, and also for those who want to help contribute to them. SMEs cannot afford to pay big salaries like other companies can, but they can, firstly, hire fresh graduates to help with the business, and secondly, hire experienced workers part-time to complete skilled jobs.”

He shared an example from his own life to explain this further, describing what has become a rite of passage for many young adults: a summer job that provided him plenty of learning and experience, and led to better opportunities. It also came with a good bit of money, which meant he did not have to ask his parents to cover many of his expenses.

“In the past, during our summer vacations, we would go to companies and ask them to give us a job for about three months,” he recalled. “With this, we would earn some money that would cover our expenses, and the experience and earnings we received was very useful to us. I believe that today’s youth also have a similar sentiment: they are on the verge of graduating or have just graduated, and are ready to work in companies near their homes, because they want to learn.”

Riyada, the government’s SME development body, provides guidance to SMEs in terms of what business they wish to pursue, and how they can successfully set up operations. The organisation provides training and financial assistance to SMEs, and identifies and reaches out to companies that can provide them opportunities for collaboration, and skill development.

Anchan said: “There are many sources of funding for SMEs: there is the Sanad Fund, there is a fund under Tanfeedh, and there is funding from companies such as Oman Development Bank. There are various sources from private institutions as well. For example, you have Intilaqah from Shell, you have the Zubair Group that has actually taken efforts to develop its own SMEs.”

Any idea – no matter how small it may seem inside one’s head – does have the potential to change the world, provided it is able to tackle problems or provide a better option to people, than those services that exist today.

Encouragement for entrepreneurs, in this context, comes once again from Dr Anchan, who has another example of a hugely successful product that has gone on to change many aspects of our lives. The next great idea – if given time and support – could be born in Oman.

“Today, everyone is so used to WhatsApp, but just a few years ago, it did not exist,” he explained. “This was founded by Jan Koum and Brian Acton. They had the idea of coming up with a service that used the internet to send messages, and they kept working on this. It took them more than 15 years from the time they came up with the idea and conceptualised it, until they actually brought out the final product.

“When Facebook bought WhatsApp, they purchased it for a whopping price of $19 billion,” revealed Anchan. “Today, WhatsApp is used by anyone and everyone. It is one of the greatest products ever created. This happened because its creators studied the market, studied the needs of the people, and came up with a product that would use existing technologies to provide services to them.”

“Any product that an SME offers has to be unique. The owner of an SME must know what current trends are all about, and that is when they come up with products and services that will catch on to the local market,” he said. “There are so many examples of companies that have created world-class history. They saw the opportunity to work on, and today, they are the best in their field.” – [email protected]