Authors: Amer Al-Roubaie; Muneer Mohammed Saeed Al Mubarak
Addresses: Ahlia University, Manama, Bahrain ' Ahlia University, Manama, Bahrain
Abstract: This paper highlights the contribution of entrepreneurship to economic diversification in the Arab world. Economic diversification increases sectoral output and reduces the risk of market volatility. The relationship between small and medium enterprises (SMEs) and economic diversification is drawn on previous research and literature. The paper uses international data to illustrate the contribution of SMEs to knowledge creation and productivity growth. Such analysis contributes to the development of SMEs in the Arab region. In the Arab world, the contribution of SMEs to the national economy remains inadequate to create linkages and foster growth. Governments in the region should encourage private enterprises to participate in the economy by providing greater financial, technical and managerial incentives. Across the region, public expenditure has been the main source of investment in the economy. 'SMEs' could increase productivity through knowledge sharing, technology transfer, innovation diffusion and collaboration. However, governments should create suitable business environment to encourage local firms taking greater role in the new economy.
Keywords: entrepreneurship; economic diversification; small and medium enterprises; SMEs; knowledge; innovation; globalisation.
International Journal of Electronic Banking, 2021 Vol.3 No.1, pp.12 - 26
Received: 29 Feb 2020
Accepted: 01 Feb 2021
Published online: 24 Aug 2021 *