Culture plays an important role in the economies of developing countries: shaping mindset and motivations, contributing to work ethics and the capacity for innovation. What does this mean for the UAE as it works to transition to a knowledge economy?
Small businesses are the drivers of innovation and a global economy. They drive growth and create jobs. Many government initiatives have been implemented in the UAE to increase entrepreneurial spirit in the country and make it easier for people to open their own businesses. But some researchers believe that UAE’s cultural history makes its citizens less likely to become business owners.
Individualist versus Collectivist Cultures
Individualist societies like the US are those that value personal freedom and independence. The individual is all; personal achievement is what matters; and competition is a driving force. Self-reliance is everything in individualist cultures.
Collectivist cultures like the UAE value harmony and consensus. What’s good for family, groups and society at large is more important than one individual’s goals and achievements. Competition is less fierce and people tend to rely on one another and their government.
Many researchers equate entrepreneurship with individualism, believing that an entrepreneurial person is one that is driven for self-achievement, driven to compete and innovate, and more likely to take risks.
But when the Global Entrepreneurship and Development Institute (GEDI) decided to look at this issue; they found evidence that collectivist cultures may have distinct advantages when it comes to entrepreneurship.
GEDI found that although individualist countries may have more businesses starting up; businesses in collectivist countries may be more growth-oriented. Because businesses are created for social good and not just individual gain in collectivist cultures; long-term strategies are part of enterprise creation. It could turn out that businesses started in collectivist cultures may be better suited for innovation and job creation over the long term.
Tolerance for risk is essential for innovation and has long been associated with western cultures. GEDI found that evidence that people that want to start businesses in individualist cultures, because the risk is wholly their own, they may just be less likely to take risks than citizens in collectivist, risk-sharing, societies.
So, while there may be more entrepreneurs in an individualist society like the US; businesses in collectivist cultures like the UAE may just be more impactful.
Government Benefactor to Citizen Stewards
UAE’s culture is unique in that most countries become innovation economies after an industrial revolution. In the Middle East, the government generously shared oil wealth and distributed it among its citizens. Some researchers believe that this means UAE citizens aren’t self-starters, don’t have a good work ethic or sense of personal accountability and that these issues are obstacles to entrepreneurship and the development of a knowledge economy.
While there are issues concerning education, entrepreneurial skills, and the movement of citizenry from the public into the private sector, issues that leaders are working hard to address…perhaps it is promoting social initiative rather than personal initiative that will help create the motivation and mindset changes that the UAE needs.
It is time for UAE citizens to become the source of innovation and economic growth for their country. Every person that launches a new business creates jobs and opportunities for others to learn essential work skills. Every person that starts a business becomes an entrepreneurial role model and contributes to a growing network for advice, support and identification with others as a business owner and entrepreneur.
A New Nationalism
Nationalism, patriotism, pride…every small business owner is a national hero in the UAE. As government initiatives multiply—initiatives to improve education, funding, and the ease of doing business for both Emiratis and expatriates—a new sense of nationalism is born.
Every entrepreneurial enterprise is social entrepreneurship in the UAE. Personal ambition translates to societal growth, social responsibility and economic prosperity for all.
Rather than a country divided into nationals and expatriates, consumers and workers, the UAE may truly become a global society made up of stewards and drivers of the nation’s economy and future.