2020 Entrepreneurial Activity Review

2020 was Kuwait’s first year of GEM participation and was certainly an interesting year in which to set benchmarks for entrepreneurial activity. In 2020, 54% of adults (18–64) in Kuwait reported that their household had suffered an overall loss in income because of the pandemic. However, one point of optimism is that 8% of Kuwaitis actually reported an overall increase in their household income as a result of the pandemic, second highest among all Middle East & Africa GEM participating economies, behind only Israel (33%). While there is no 2019 benchmark for adults intending to start a business in Kuwait within the next three years, in 2020 this rate was quite high at 58%, just above Oman (57%). But there is some light on prospective entrepreneurs’ motivations: 59% stated that the pandemic had influenced their intentions, suggesting a very high number of Kuwaitis overall are reacting to the new economic reality in an entrepreneurial manner. 
Kuwait’s Total early-stage Entrepreneurial Activity (TEA) rate of 19.2% was the highest of all peer GEM Middle East economies, ahead of Qatar (17.2%) and Saudi Arabia (17.3%). Of the respondents involved in TEA, 61% indicated that they saw new opportunities as a result of the pandemic, slightly above Oman as the highest among peer GEM Middle East economies. This is a positive sign for Kuwait’s recovery, as it appears a reasonably high proportion of aspiring Kuwaiti entrepreneurs do end up becoming early-stage entrepreneurs as evidenced by the TEA rate. This factor, combined with a strong expected hiring rate among Kuwaiti adults (9.5% expect to hire six or more employees within five years), indicates a significant amount of entrepreneurial potential could be funnelled into a Kuwaiti recovery. 

2020 Framework Conditions Review 

Kuwait’s performance varied across its Framework Conditions in 2020, with some scores being ranked near the bottom of GEM economies while others reflect some strong components supporting entrepreneurship. Because Kuwait did not participate in the 2019 GEM survey cycle, these varied scores will be given context by means of comparison with peer economies. In the condition “Access to entrepreneurial finance”, Kuwait’s 4.5 score was about average among GEM participating economies (22nd), ahead of Iran (3.9) but below Oman (4.9), Qatar (5.1), the United Arab Emirates (5.3) and Saudi Arabia (6.0). In its government-related indicators, Kuwait had a mixed 2020 performance. For “Government policy: support and relevance” Kuwait scored 3.5, 38th among GEM participating economies, and lowest among GEM Middle East economies. This was similarly the case for Kuwait’s “Government entrepreneurship programs”: a 2.9 score, 44th among GEM participating economies and again lowest among GEM Middle East economies. The Kuwaiti government will need to open up its policies a little more if entrepreneurs are to help in its pandemic recovery. However, one positive note is that its “Government policy: taxes and bureaucracy” condition scored 4.5, 15th among GEM economies and third among its Middle East GEM peers. 
Kuwait’s score for “Social and cultural norms” is another optimistic sign, reflecting a society with positive attitudes about entrepreneurship but which may be constrained by policy decisions. In “Social and cultural norms”, Kuwait’s 5.8 score positioned it 13th among GEM economies, higher than Iran (5.1), but just below Qatar (5.9) and Oman (6.0). Experts also prefered the Kuwaiti entrepreneurial response to the pandemic (a 6.5 score and 26th overall), over their governmental response (4.1 score, 32nd among GEM economies).