Riyadh: Evolving to Become as One of the MENA Region’s Key Entrepreneurial Ecosystems

Abstract

Riyadh’s entrepreneurial ecosystem is one of the most important drivers of entrepreneurship and innovation in the MENA region, as Saudi Arabia aims to achieve economic diversification within its industry, and thus reduce its dependence on oil. This paper analyzes how Riyadh’s entrepreneurial ecosystem is achieving these goals and explores the differences between entrepreneurs and owner-managers operating in the Riyadh ecosystem to identify their strengths and weaknesses in guiding Saudi policymakers’ decision-making. Using GEM data for Saudi Arabia and analyzing the ten pillars (connectivity, leadership, knowledge, talent, finance, culture, formal institutions, services and intermediaries, physical infrastructure, and demand) of the Stem model, the authors applied ANOVA tests for the quantitative variables and Chi-squared tests for the qualitative variables and rescaled the results to 0–10-point scales for ease of interpretation. We found that among the ten pillars studied, there were four that have improved the most in the Riyadh entrepreneurial ecosystem: two systemic (networks, talent) and two environmental (physical infrastructure and formal institutions), while it was in the systemic pillars (leadership, financing, and knowledge) where the least progress has been made in the period 2019–2022.

1. Introduction

The global economy is witnessing a surge in entrepreneurship, where entrepreneurs need to learn and achieve skills based on formal and informal education to enhance their creativity and innovation for doing business. As a result, over the past 15 years, the literature on entrepreneurial ecosystems has gained significant importance and become compelling [1]. One of the reasons why this literature has grown and made substantial contributions to knowledge is the almost parallel development of most urban entrepreneurial ecosystems, created as a vision to alleviate poverty through the marketplace and provide entrepreneurs with the resources they need to grow [2], and the almost simultaneous study of them. This has transformed what were once mere words into measurable and analyzable realities. While in many fields theory usually precedes practice, the gap between the two is significantly smaller in the case of entrepreneurial ecosystems. Several projects are contributing to this, and despite the cost of data collection, there are already at least two observatories that regularly measure and describe the entrepreneurial ecosystems’ qualities. These are the Startup Genome project and the Global Entrepreneurship Monitor (GEM) project.

The Startup Genome project is an initiative to study and analyze entrepreneurial ecosystems around the world. It focuses on collecting data and conducting research to understand better the factors that contribute to the success or failure of startups in different cities and regions. The project gathers information from a variety of sources, including startup founders, investors, and experts in the field. It examines critical issues such as local startup culture, access to funding, talent availability, and the regulatory environment. By analyzing this data, the Startup Genome project seeks to identify patterns and trends to help policymakers, entrepreneurs, and investors make decisions that are more informed. It provides insights into the best practices and strategies to foster a thriving startup ecosystem and drive economic growth. Overall, the Startup Genome project plays a critical role in advancing the understanding of startup ecosystems and providing valuable knowledge to support the development and success of startups worldwide.

For its part, the GEM project, recognizing the growing interest in urban entrepreneurial ecosystems, has expanded its measurement tools to create an index (called ESI = Entrepreneurial Ecosystem Quality Index) that captures the overall quality of such ecosystems. Based on Eric Stam’s 2015 theoretical framework, the project has developed information tools to assess the different elements that contribute to the configuration of these ecosystems. These elements are ten pillars: connectedness, leadership, knowledge, talent, finance, culture, formal institutions, services and intermediaries, physical infrastructure, and demand. By aggregating these pillars into a single figure, the Index provides a comprehensive measure of the ecosystem’s strength and vitality. Figure 1 illustrates this theoretical model.

GEM has used its experience and theoretical expertise to develop exclusive tools to measure specific aspects of the quality of an entrepreneurial ecosystem. In contrast, others have attempted to fill similar models using data from secondary sources supplemented by expert questionnaires (such as Startup Genome). All are valid approaches, but GEM’s approach is unique and applicable to any target area at any time, regardless of secondary information sources.

Using the tools and indicators developed by GEM, this study aims to contribute knowledge by establishing the average state of quality of Riyadh’s entrepreneurial ecosystem, which is destined to become one of the most remarkable in the region. In this sense, this paper fills a research gap in the entrepreneurship literature that deals with the structural economic transformation processes in countries with limited natural resources, such as oil and natural gas in Saudi Arabia. This structural transformation will lead to a new type of economy that will be more service-based and less reliant on industry. This transformation process will help the country diversify into productive and commercial sectors that are not dependent on oil and natural gas, which will reduce risks and benefit the population.

Moreover, our paper fills a second gap in the entrepreneurship literature, as our study provides a comprehensive view of the entire entrepreneurial ecosystem in Riyadh to complement other partial perspectives that focus on young people, as in [4], who analyze young Saudis’ intentions toward digital entrepreneurship, or that focus on women, as in [5].

The objectives of the study include determining the starting point of the main elements that shaped the entrepreneurial ecosystem in Riyadh in 2019, and their evolution over the following four years to determine whether there are differences in the views of these elements between emerging entrepreneurs and new or established owners in Riyadh. The additional objectives include identifying the most robust and weakest elements of the ecosystem, and providing recommendations on how to improve what is needed. These recommendations should help policymakers and ecosystem stakeholders. The last objective consists of describing the role of Riyadh’s entrepreneurial ecosystem in the Middle East region, its current state, its aspirations, and the elements that support these aspirations, as well as those that need to be strengthened in order to progress towards their achievement.

2. Theoretical Background

Given the prevalence of micro, small, and medium-sized enterprises (SMEs) worldwide, especially in developing countries, they are recognized globally as stimulators of economic development [6]. In this stimulating process, entrepreneurs are of great importance as they serve as a breeding ground for innovative entrepreneurship, where digital entrepreneurship is increasingly important as it relies on investments in technology, knowledge, and skills development to create entrepreneurial ecosystems. In fact, the urbanization of entrepreneurship and innovation is accelerating in the digital era [6], especially in the city centers where entrepreneurs tend to be located due to their potential frequency for interdisciplinary interactions, as known as collision density [7].

James F. Moore was the first author who introduced the term ‘ecosystem’ in an influential article published in the Harvard Business Review during the 1990s. Moore argued that businesses do not operate in isolation, highlighting the interconnected relationships between firms, suppliers, customers, and financiers [8]. As a fundamental part of these ecosystems, entrepreneurs discover opportunities, seek allies to develop businesses, risk their capital to launch innovative ideas, meet new market needs, and start new businesses. They are widely considered to be at the forefront of sustainability transitions.

Promoting entrepreneurial ecosystems is key for creating socio-economic wealth and economic growth, especially when there is a public–private collaboration in the process through fostering entrepreneurship education, as entrepreneurship education has a positive and significant effect on entrepreneurial intentions and perceived behavioral control [9], as well as on the human flourishing of future entrepreneurs [10]. Linked to entrepreneurial ecosystems, open innovation platforms are important tools for enabling startups and entrepreneurs to develop innovative solutions to foster business growth [11].

Startups benefit from open innovation [12] so long as the company has signed stable agreements with institutional partners, allowing the organization to be competitive in global environments. Signing these agreements creates legal certainty in the startup, which in turn encourages entrepreneurship and innovation in the products and services offered to the market. Success can be more significant when technology is integrated throughout the marketing and sales process, regionally, nationally, and internationally. However, all these benefits also have a downside, which can lead to the co-destruction of value when there is a lack of trust between partners, resulting in the creation of four types of risks: data-related risks, people-related risks, enterprise-level risks, and outcome risks [13]. Therefore, trust and transparency in the transmission of information that is not sensitive to the survival of the company are fundamental to the success of the application of open innovation.

Public and private institutions close with public policy and culture are key components of the entrepreneurial context of a country [14]. The existence of a culture that encourages entrepreneurship among the population differentiates countries in terms of wealth creation, socio-economic well-being, and employment. The most economically developed countries in the world are characterized by entrepreneurial ecosystems in which the public administration supports private initiatives inserted into triple helix schemes formed by the public administration, firms, and HEIs (higher education institutions) [15]. This process is accelerated when the government introduces tax exemptions for new ventures.

Digital technologies are transforming the entrepreneurial landscape and enabling the democratization of entrepreneurship [16]. As discussed in [17], when tax exemption is combined with the digitalization of business processes, the positive effect is multiplied, and there is also a capillary effect throughout the country’s business structure. Digitalization makes it possible to increase labor productivity, which will become even more evident with the implementation of artificial intelligence. These effects will be visible in the countries with the highest investments in technology, as is the case in the European and Asian continents, as well as in the United States, Canada, and some Middle Eastern countries, including Saudi Arabia.

Entrepreneurial role models in the local environment provide opportunities to learn about entrepreneurial tasks and skills and reduce entrepreneurial fear of failure, especially if the local environment approves of entrepreneurial success [11]. As a result, new businesses are created by a dual social and institutional impulse that reinforces the one created by the entrepreneur. As a result, it facilitates the creation of entrepreneurial ecosystems formed by quadruple helix models in which the public sector, businesses, universities, and non-governmental organizations interact [18].

As shown by [19], differentiation strategies have the highest impact on the performance of digital entrepreneurial ventures online in the MENA (Middle East and North Africa) region, followed by cost leadership, and focus strategies. This is because differentiation is usually the result of innovation, which is one of the most important variables in defining a company’s leadership position. Entrepreneurship needs to transition into leadership to advance stakeholders’ interests both within and outside the firm [20].

A theoretical model describing an entrepreneurial ecosystem was developed by [3], a study that was complemented by a study of the relationships between the attributes within entrepreneurial ecosystems [21]. The combination of both works resulted in a seminal article that examined the context of entrepreneurial ecosystems, which consisted of industrial districts, clusters, and innovation systems [22]. Entrepreneurial ecosystems share factors that go beyond the boundaries of a single firm. Nevertheless, they are located within the boundaries of a territory (in most cases, a region), which contributes to improving the overall competitiveness of a company. Thus, the entrepreneurial ecosystem approach starts from the entrepreneur rather than the firm and emphasizes the social, economic, and geographic context in which the entrepreneurial ecosystem is embedded. Consequently, these authors studied the ontological layers of entrepreneurial ecosystems, that is, the framework conditions, systemic conditions, outputs and outcomes, as well as what they call causalities (bottom-up and top-down) and the causal relationships between them. For example, for these authors, a bottom-up causality shows the fundamental reasons for value creation. In contrast, a top-down causality shows how the outcomes and outputs generate feedback and improve ecosystem conditions over time. Both causalities interact with each other.

It is important to note that value creation within a business’ ecosystem is formed by the systemic conditions of business activity, which are defined by the formal and informal activities of the public and private institutions that interact with it, as well as by the internal aspects related to the organization and defined by the training and experience of the human capital working on it. The combination of these external and internal factors determines the interaction between all the factors that influence the organization and the internal demand, as defined in [23]’s cluster approach.

Both sets of conditions constitute the pool of variables for which GEM researchers [24] sought to develop information tools to provide an objective and quantifiable measure for each of them. GEM’s previous experience in measuring the state of national and subnational conditions for entrepreneurship provided a suitable precedent for the development of this new methodology. GEM researchers developed a set of constructs consisting of items and variables representing these ten frameworks and systemic conditions so that they could be grouped into a set of ten pillars to assess the quality of each state. A weighted linear combination of these ten pillars defines a composite index called the ESI (Entrepreneurial Ecosystem Index), which represents, in one figure, the average quality/state of a target ecosystem on a 10-point Likert scale, making it easy to interpret and rank.

The pilot experience for measuring this index for the first ESs was satisfactory because the results gave an ESI index formed by two internal components, one representing the framework conditions and the other the systemic conditions, as theorized by Stam and Spiegel. The bottom two rows of the model showed the four main ES framework conditions (formal institutions, culture, physical infrastructure, and demand) plus the six systemic conditions (networks, leadership, finance, talent, knowledge, and support services/intermediaries). Thus, the ESI and its components for a target ecosystem “i” can be expressed mathematically by the following formulas.

$${\mathrm{E}\mathrm{S}\mathrm{I}}_{\mathrm{i}}=0.6\times {\mathrm{E}\mathrm{S}\mathrm{I}}_{\mathrm{S}\mathrm{C}\mathrm{i}}+{0.4\times \mathrm{E}\mathrm{S}\mathrm{I}}_{\mathrm{F}\mathrm{C}\mathrm{i}}$$

(1)

where

$${\mathrm{E}\mathrm{S}\mathrm{I}}_{\mathrm{S}\mathrm{C}\mathrm{i}}=\frac{{\mathrm{N}}_{\mathrm{i}}+{\mathrm{L}}_{\mathrm{i}}+{\mathrm{F}}_{\mathrm{i}}+{\mathrm{T}}_{\mathrm{i}}+{\mathrm{K}}_{\mathrm{i}}+{\mathrm{S}}_{\mathrm{i}}}{6}$$

(2)

$${\mathrm{E}\mathrm{S}\mathrm{I}}_{\mathrm{F}\mathrm{C}\mathrm{i}}=\frac{{\mathrm{G}}_{\mathrm{i}}+{\mathrm{C}}_{\mathrm{i}}+{\mathrm{P}}_{\mathrm{i}}+{\mathrm{D}}_{\mathrm{i}}}{4}$$

(3)

where

• ESIi = the Entrepreneurship Ecosystem Composite Index for ecosystem “i”
• ESISCi = the partial composite index, representing the average state of the systemic conditions of ecosystem “i”
• ESIFCi = the partial composite index, representing the average state of the framework conditions of ecosystem “i”
• 0.6 = the weight assigned to the systemic conditions within the ESI index
• 0.4 = the weight assigned to the framework conditions within the ESI index,
• while Ni to Di are the quantitative measures representing the following.
• Ni = the average state of networking in ecosystem “i”
• Li = the average state of leadership in ecosystem “i”
• Fi = the average state of finance in ecosystem “i”
• Ti = the average state of talent in ecosystem “i”
• Ki = the average state of knowledge in ecosystem “i”
• Si = the average state of services/intermediaries in ecosystem “i”
• Gi = the average state of formal institutions in ecosystem “i”
• Ci = the average state of culture in ecosystem “i”
• Pi = the average state of the physical infrastructure in ecosystem “i”
• Di = the average state of the demand in ecosystem “i”.

Before considering the results, it is essential to understand that the systemic conditions set in the entrepreneurial ecosystem are the heart and engine of the ecosystem, as entrepreneurial networks guided by leadership, finance, talent, knowledge, and support services form it [24]. The interaction of these elements is responsible for achieving entrepreneurial success in the ecosystem, as the combination of information flow and knowledge incentivize productivity and efficiency in the ecosystems, as well as business profitability, which attracts new investors and human capital to stimulate the firm and make the entrepreneurial ecosystem stable and sustainable over time.

In all these entrepreneurial processes, strengthening leadership with knowledge is fundamental, especially when it combines theoretical knowledge with practical experience. In the case of family businesses, which are the majority in many countries around the world, highly successful business leaders give rise to what is known as ‘familyism,’ which is defined by a specific type of leadership that distinguishes it from other businesses. In this way, it increases the credibility and good image of the entrepreneur, which improves access to family capital [25] and external financing and attracts the most talented professionals to their organization [26]. Finally, working with intermediaries who specialize in providing specific services significantly reduces the barriers to entry for new business projects and the time to market for products and services that incorporate innovations that meet the needs of the market niches targeted by the products and services marketed by the organization [27] which strengthens employment growth [28] and corporate social responsibility [29].

3. Data and Methods

GEM Saudi Arabia researchers have been collecting the data used in this research since 2019, while conducting the Adult Population Survey to participate in the regular cycles of the Global Entrepreneurship Monitor. This survey is one of the main information tools used by GEM to collect data on several topics, such as societal values towards entrepreneurship, entrepreneurial attitudes and values, entrepreneurial activity and its main characteristics, established activities and its characteristics, business’ discontinuation, and informal investment activity, all over the 18–64 aged population of the participating countries. When a participating country wants to study the characteristics of an entrepreneurial ecosystem at a subnational level, such as in the case of Riyadh, the survey is expanded to include a comprehensive set of specific questions about the ecosystem. Both nascent entrepreneurs (setting up a new business) and new and established owner-managers (up to 3.5 years old) evaluate these questions, presented as Likert scale items. Therefore, the complete set of variables used in this study is made up of the information obtained over the resident population within the ecosystem along with the specific information provided by the nascent entrepreneurs and the new and established business owner-managers.

The data collected for Riyadh have not been used before, except for 2019, and this paper, which counts the participation of two members of the Saudi team, represents a novelty for addressing the average state and longitudinal evolution of the main pillars that make up the entrepreneurial ecosystem in Riyadh between the years 2019 and 2022. However, the results were limited to a longitudinal analysis comparing the assessments of the two groups of above-mentioned actors: the nascent entrepreneurs and the new and established owner-managers working in the ecosystem.

The samples that support the results are described in the fieldwork data sheet shown in

Table 1. Fieldwork data sheet.

Universes	18–64 aged population with residence in Riyadh and Saudi Arabia Entrepreneurs and owner-managers who work in Riyadh
Sample sizes	Total 18–64 population: 2019 = 1711 2020 = 1718 2021 = 1720 2022 = 1699 Nascent entrepreneurs and owner-managers working in Riyadh: 2019 = 272 + 169 = 441 2020 = 229 + 217 = 446 2021 = 207 + 198 = 405 2022 = 278 + 192 = 471
Sampling	Random sampling stratified by gender, age group, and territory, with a slight quota control after collecting 75% of the sample
Method	Phone calls assisted by a computer (CATI)
Error	For a confidence level of 95%, the total sampling error has been, for each year, lower than ±5% to represent the estimated opinions of the populations under consideration
Weighting	The samples were weighted by gender, age group, and territory
Period	All the years’ data was collected between April and 15th July
Vendor	Field interactive

.

The main data consisted of responses to a comprehensive battery of items assessed by nascent entrepreneurs and new and established business owner-managers in the GEM Adult Population Survey (APS) for Riyadh, focusing exclusively on the ten pillars of Stam, described above. These items were combined with the results of the other questions to the whole population in order to calculate the final variables, which represented the 10 pillars making up the ecosystem quality.

Table 2. Battery of items scored by nascent entrepreneurs and owner-managers of companies working in Riyadh according to GEM Global.

Pillar 1	Networking	1–5 Likert Scale
Item 1	How often do you attend local business networking events?	Very rarely Very frequently
Item 2	Please tell me how much you agree with the following statement: In Riyadh, it is easy to make personal contacts with other owners of young businesses.	Strongly disagree Strongly agree
Item 3	Please tell me how much you agree with the following statement: When you need advice or help with your business, you can easily find the right people through your network.	Strongly disagree Strongly agree
Item 4	Please tell me how much you agree with the following statement: Most business owner-managers in the same industry and region as you actively participate in at least one local business network.	Strongly disagree Strongly agree
Item 5 (GAPS)	Do you know someone who has started a business in the last two years?	0 = none 1 = one 2 = 2–4 3 = 5 or more
Item 6 (GAPS)	In my country, you will often see companies whose primary goal is to solve social problems.	Strongly disagree Strongly agree
Pillar 2	Leadership	1–5 Likert Scale
Item 7	How often do you get mentoring for your new business from established entrepreneurs in your area?	Very rarely Very frequently
Item 8	How often do you mentor new business owners?	Very rarely Very frequently
Item 9	Your decision to start your own business was strongly inspired by a startup or business from your region.	Strongly disagree Strongly agree
Pillar 3	Finance	1–5 Likert Scale
Item 10	You feel there are adequate sources of external capital seed in Riyadh.	Strongly disagree Strongly agree
Item 11 (GAPS)	Informal investment in RiyadhRR: Informal investors at a regional rateNR: Informal investors at a national rate	1 = RR/NR < 1 2 = RR/NR = 1 3 = RR/NR > 1
Pillar 4	Talent	1–5 Likert Scale
Item 12	In Riyadh, there is no shortage of certain types of employees needed for one’s business.	Strongly disagree Strongly agree
Item 13	You can afford to hire the employees you need for your business locally.	Strongly disagree Strongly agree
Item 14	You are satisfied that the skills of the Riyadh workforce are sufficient to meet your business needs.	Strongly disagree Strongly agree
Item 15 (GAPS)	You have the knowledge, skills, and the minimum experience required to start a new business	Strongly disagree Strongly agree
Pillar 5	Knowledge	1–5 Likert Scale
Item 16	Your business is built based on the result of something you learned from a person or organization in your region.	Strongly disagree Strongly agree
Pillar 6	Services and Intermediaries	1–5 Likert Scale
Item 17	In your region, your new business is strongly supported by a program focused on startups (e.g., an accelerator or incubator program).	Strongly disagree Strongly agree
Item 18	In general, there are enough workshops and other training opportunities available in Riyadh to help you learn the business skills you need for your business.	Strongly disagree Strongly agree
Pillar 7	Formal Institutions	1–5 Likert Scale
Item 19	When starting your business, it is not a serious problem to face bureaucracy and regulations.	Strongly disagree Strongly agree
Item 20 (GAPS)	In Riyadh, it is easy to start a business, agree/disagree.	Strongly disagree Strongly agree
Pillar 8	Culture	1–5 Likert Scale
Item 21	Most people in Riyadh support individuals interested in becoming entrepreneurs.	Strongly disagree Strongly agree
Item 22 (GAPS)	Fear of failure is not an obstacle to starting a new business	Strongly disagree Strongly agree
Item 23 (GAPS)	In Riyadh, most people consider starting a new business a desirable career choice.	Strongly disagree Strongly agree
Item 24 (GAPS)	In Riyadh, those successful at starting a new business have a high level of status and respect.	Strongly disagree Strongly agree
Pillar 9	Physical Infrastructure	1–5 Likert Scale
Item 25	How satisfied are you with Riyadh’s transportation infrastructure (e.g., parking, roads, and traffic flow) in relation to your business needs?	Completely unsatisfied Completely satisfied
Item 26	How satisfied are you with Riyadh’s telecommunications and Internet access and speed for your business needs?	Completely unsatisfied Completely satisfied
Item 27	How satisfied are you with the availability and price of additional physical space in Riyadh to grow your business relative to your business needs?	Completely unsatisfied Completely satisfied
Pillar 10	Demand	1–5 Likert Scale
Item 28 (GAPS)	In the next six months, there will be good opportunities for starting a business in the area where you live.	Strongly disagree Strongly agree

Note: Fear of failure was reverted to avoid confusion when interpreting the results about the pillars. Since all the items expressed positive statements, in the case of this variable instead of using the percentage of people who fear failure, this type of analysis used the percentage of people that do not fear failure.

shows the specific battery of items and the general APS variables used to calculate each pillar. To distinguish the general APS variables, an indication (GAPS) is visible for each effected item in column 1 of the table.

All these items have been measured for Riyadh in the years 2019, 2020, 2021, and 2022. The results have been utilized in order to accomplish the objectives of the study. For this purpose, we have applied the following statistical methodology.

Statistical Methods

The statistical methods applied to carry out this exploitation are as follows.

• The use of crossed tables and Chi-square tests to describe the sector of activity and the size of the nascent and new and established businesses, which were part of the analyzed sample.
• Rescaling all the items and general APS variables to 0–10 Likert scales. This operation was performed to facilitate the interpretation of the results using the same measure for all the variables involved in the analyses, since some of them were initially measured using 5-point Likert scales, while others were categorical variables whose results were percentages.
• Calculating the averages and other descriptive indicators to describe the average state of all the elements that make up the quality of Riyadh’s entrepreneurial ecosystem.
• The use of ANOVA tests to assess the differences between the opinions of nascent entrepreneurs and new and established owners on the quantitative variables once rescaled.
• Preparation of descriptive tables and graphs.

4. Results

GEM classified the businesses that the APS survey sample captured into four major sectors: extractive (primary), transformative (secondary), business services, and consumer-oriented services (tertiary). As shown in

Table 3. Descriptive and longitudinal analysis of the distribution of nascent businesses and new and established businesses in terms of their sector of activity and number of employees.

Year 2019
Type of Actor	Not Classified	Extractive	Transforming	Business Services	Consumer-Oriented	Total
Nascent	10.7%	1.1%	19.1%	8.1%	61.0%	100.0%
New or EBO	4.8%		13.7%	10.1%	71.4%	100.0%
Total	8.4%	0.7%	17.0%	8.9%	65.0%	100.0%
Chi-Square	10.158	p-value	0.038	Most businesses were consumer oriented in both groups.
	No jobs	1–5 jobs	6–19 jobs	20+ jobs		Total
Nascent	43.8%	13.2%	32.7%	10.3%		100.0%
New or EBO	5.3%	52.1%	34.9%	7.7%		100.0%
Total	29.0%	28.1%	33.6%	9.3%		100.0%
Chi-Square	109.84	p-value	0.000	Owner-managers created more job positions than nascent.
Year 2022
Type of Actor	Not Classified	Extractive	Transforming	Business Services	Consumer-Oriented	Total
Nascent	2.9%	0.7%	3.6%	1.1%	91.8%	100.0%
New or EBO	2.6%	0.5%	7.8%	5.2%	83.9%	100.0%
Total	2.8%	0.6%	5.3%	2.8%	88.5%	100.0%
Chi-Square	11760	p-value	0.019	Most businesses were consumer oriented in both groups. Time intensified this trend.
	No jobs	1–5 jobs	6–19 jobs	20+ jobs		Total
Nascent	67.0%	21.9%	6.8%	4.3%		100.0%
New or EBO	3.6%	73.1%	16.1%	7.3%		100.0%
Total	41.1%	42.8%	10.6%	5.5%		100.0%
Chi-Square	192.44	p-value	0.000	Owner-managers created more job positions than nascent.

Source: Authors based on GEM SA 2019–2022 APS data.

, the businesses included in the samples used in this study primarily carried out their activities in the consumer-oriented sector and had micro-small dimensions in terms of the number of employees. In order not to show an excess of data, the description has been limited to the years 2019 and 2022 The sectoral distributions were similar in the four years, and what could be observed was that, as the years went by, the activities of entrepreneurs were increasingly found in the consumer-oriented sector, making it necessary for the government to be aware of this trend and the direction to achieve its diversification objectives.

4.1. Networking

The networking section describes, through the assessment of a set of items or variables, the average perception or estimated state of the communication resources and networking applied by the actors of Riyadh’s entrepreneurial ecosystem. Through this pillar, it was possible to analyze the extent to which there was sufficient and qualified networking activity in the zone, which facilitated or hindered the establishment of professional and business contacts and facilitated or hindered the collaboration among ecosystem actors. The set of items included six variables, which two groups of respondents—the group of nascent entrepreneurs (up to 3 months in the market) and the group of new and established owners (from 3 to 42 months in the market and more than 42 months in the market, respectively)—evaluated when filling in the questionnaire.

Table 4. Average scores for items about networking: longitudinal description and comparison between nascent entrepreneurs and new and established owner-managers.

Items for Pillar 1: Networking (All Scores Re-Scaled to a 0 (Lowest)—10 (Highest) Point Scale)	2019	2020	2021	2022
How often do you attend local business networking events?
Average: Nascent entrepreneurs	5.04	5.77	5.64	6.91
Std. error: Nascent entrepreneurs	0.14	0.16	0.14	0.14
Average: New and established owner-managers	4.40	5.07	5.80	6.83
Std. error: New and established owner-managers	0.15	0.19	0.16	0.18
Average: Total	4.79	5.51	5.72	6.87
Std. error: Total	0.10	0.12	0.11	0.11
ANOVA test, p-value	0.003	0.006	0.466	0.745
In Riyadh, it is easy to get in touch with other owner-managers of nascent businesses.
Average: Nascent entrepreneurs	5.31	7.79	7.32	6.86
Std. error: Nascent entrepreneurs	0.13	0.13	0.14	0.13
Average: New and established owner-managers	6.02	7.58	7.86	7.08
Std. error: New and established owner-managers	0.16	0.15	0.14	0.16
Average: Total	5.60	7.71	7.58	6.95
Std. error: Total	0.10	0.09	0.10	0.10
ANOVA test, p-value	0.001	0.307	0.006	0.289
When you need advice or help with your business, you can easily find the right people through your network.
Average: Nascent entrepreneurs	6.84	7.86	7.32	6.95
Std. error: Nascent entrepreneurs	0.15	0.12	0.14	0.14
Average: New and established owner-managers	5.96	7.66	7.74	7.35
Std. error: New and established owner-managers	0.16	0.15	0.14	0.16
Average: Total	6.46	7.79	7.53	7.11
Std. error: Total	0.11	0–09	0.10	0.10
ANOVA test, p-value	0.000	0.308	0.042	0.072
You can meet most business owners and managers in your industry and region by actively participating in at least one local business network.
Average: Nascent entrepreneurs	5.05	7.32	7.27	6.85
Std. error: Nascent entrepreneurs	0.15	0.13	0.15	0.14
Average: New and established owner-managers	5.71	7.25	7.53	7.18
Std. error: New and established owner-managers	0.14	0.17	0.13	0.17
Average: Total	5.32	7.29	7.40	6.99
Std. error: Total	0.11	0.19	0.10	0.11
ANOVA test, p-value	0.004	0.739	0.225	0.145
Do you know someone who has started a business in the last two years?
Average: Nascent entrepreneurs	2.43	2.30	1.87	2.90
Std. error: Nascent entrepreneurs	0.10	0.12	0.13	0.11
Average: New and established owner-managers	3.80	2.69	1.48	3.40
Std. error: New and established owner-managers	0.14	0.16	0.11	0.12
Average: Total	2.96	2.45	1.68	3.10
Std. error: Total	0.09	0.09	0.09	0.08
ANOVA test, p-value	0.000	0.058	0.032	0.004
In my country, you will often see companies whose primary purpose is to solve social problems.
Average: Nascent entrepreneurs	6.31	NA	8.05	8.20
Std. error: Nascent entrepreneurs	0.13	NA	0.13	0.09
Average: New and established owner-managers	5.62	NA	8.57	8.11
Std. error: New and established owner-managers	0.17	NA	0.12	0.13
Average: Total	6.04	NA	8.30	8.16
Std. error: Total	0.10	NA	0.09	0,07
ANOVA test, p-value	0.001	NA	0.006	0.551
Total Averages
Na: Networking: Average score for nascent entrepreneurs	5.06	6.21	6.24	6.44
Na: Networking: Std. error for nascent entrepreneurs	0.06	0.08	0.07	0.07
Nb: Networking: Average score for new and established owner-managers	5.26	6.05	6.50	6.66
Nb: Networking: Std. error for new and established owner-managers	0.07	0.10	0.06	0.10
N: Networking: Total average score	5.13	6.15	6.37	6.53
N: Networking: Total Std. error	0.04	0.06	0.05	0.06
ANOVA test, p-value	0.045	0.241	0.014	0.079

Source: Authors.

and Figure 2 show the average scores for Riyadh on a 10-point scale for the period 2019–2022. Significant statistical differences between the two groups of stakeholders are highlighted in the table. The tests used to assess these differences consisted of ANOVA. The background color used in all tables indicates the highest statistically significant mean values. All the results were rescaled to 0–10 point scales to facilitate interpretation. The total averages for this pillar, shown in the final rows of the table, were calculated as simple averages of the six individual variables for each respondent. Although at the beginning of the research, there was consideration for summarizing each pillar through a principal component analysis. This option was dismissed due to the limited number of available variables for some of them, and even just one variable in the case of the demand pillar. Therefore, given the descriptive nature of the study, a simple means calculation was adopted. The weight assigned to each component of the pillars is subject to discussion, as it was assumed to be equal by the authors. However, considering this study as an initial exploration of the Riyadh ecosystem, the chosen methodology was deemed sufficient to provide an initial understanding of the behavior of the main actors within the ecosystem.

4.2. Leadership

The subsequent points presented above demonstrate the projected indications pertaining to the leadership domain, adhering to the identical structure as the preceding point. This study examined the extent to which prominent and influential individuals or entrepreneurial teams contributed to the formation and development of the ecosystem. This encompassed both the act of mentoring and the provision of individuals who served as role models (

Table 5. Average scores for items about leadership: longitudinal description and comparison between nascent entrepreneurs and new and established owner-managers.

Items for Pillar 2: Leadership (All Scores Re-Scaled to a 0 (Lowest)—10 (Highest) Point Scale)	2019	2020	2021	2022
How often do you get mentoring for your new business from established entrepreneurs in your area?
Average: Nascent entrepreneurs	6.09	6.78	5.85	6.63
Std. error: Nascent entrepreneurs	0.13	0.13	0.15	0.13
Average: New and established owner-managers	5.88	5.70	5.90	7.03
Std. error: New and established owner-managers	0.15	0.18	0.15	0.16
Average: Total	6.01	6.38	5.88	6.79
Std. error: Total	0.10	0.11	0.10	0.10
ANOVA test, p-value	0.315	0.000	0.807	0.063
How often do you mentor new business owners?
Average: Nascent entrepreneurs	5.97	6.65	5.71	6.77
Std. error: Nascent entrepreneurs	0.15	0.14	0.16	0.13
Average: New and established owner-managers	7.20	6.26	5.95	6.96
Std. error: New and established owner-managers	0.18	0.17	0.16	0.17
Average: Total	6.44	6.51	5.83	6.85
Std. error: Total	0.12	0.11	0.11	0.10
ANOVA test, p-value	0.000	0.105	0.311	0.393
Your decision to start your own business was strongly inspired by a startup or business from your region.
Average: Nascent entrepreneurs	7.00	7.34	7.60	7.25
Std. error: Nascent entrepreneurs	0.13	0.16	0.15	0.14
Average: New and established owner-managers	7.01	6.13	8.19	7.28
Std. error: New and established owner-managers	0.16	0.22	0.14	0.17
Average: Total	7.00	6.89	7.89	7.26
Std. error: Total	0.10	0.13	0.10	0.11
ANOVA test, p-value	0.935	0.000	0.006	0.869
Total averages
Sa: Leadership: Average score for nascent entrepreneurs	6.35	6.95	6.39	6.88
Sa: Leadership: Std. error for nascent entrepreneurs	0.08	0.12	0.11	0.11
Sb: Leadership: Average score for new and established owner-managers	6.70	6.03	6.69	7.08
Sb: Leadership: Std. error for new and established owner-managers	0.11	0.16	0.10	0.12
S: Leadership: Total average score	6.48	6.61	6.54	6.97
S: Leadership: Total Std. error score	0.07	0.10	0.07	0.08
ANOVA test, p-value	0.017	0.000	0.046	0.248

Source: Authors.

).

4.3. Finance

The finance pillar recaps the average state of the availability and access to capital for nascent entrepreneurs and new and established owner-managers. The rates of informal investment were translated into 0–10 scales following these criteria: if an individual acted as an informal investment, one point was assigned to it because this was a yes/no question in the general APS questionnaire. This score was transformed into 10 points when it was rescaled to a Likert scale of 10 points (

Table 6. Mean scores for finance: longitudinal description and comparison between nascent entrepreneurs and new and established owners.

Items for Pillar 3: Finance (All Scores Re-Scaled to a 0 (Lowest)—10 (Highest) Point Scale)	2019	2020	2021	2022
You feel there are adequate sources of external capital seed in Riyadh.
Average: Nascent entrepreneurs	5.77	7.73	7.16	6.90
Std. error: Nascent entrepreneurs	0.27	0.13	0.14	0.13
Average: New and established owner-managers	4.83	6.76	7.49	7.31
Std. error: New and established owner-managers	0.19	0.18	0.14	0.14
Average: Total	5.31	7.37	7.32	7.07
Std. error: Total	0.16	0.11	0.10	0.10
ANOVA test, p-value	0.005	0.000	0.102	0.047
Informal investment in Riyadh
Average: Nascent entrepreneurs	2.57	1.82	2.10	2.24
Std. error: Nascent entrepreneurs	0.26	0.23	0.28	0.25
Average: New and established owner-managers	1.83	2.03	0.72	0.98
Std. error: New and established owner-managers	0.29	0.31	0.18	0.21
ANOVA test, p-value for the comparison between nascent and owner-managers	0.074	0.584	0.000	0.000
Average: Total Riyadh adult population	1,63	1.3	1.1	1.3
Std. error: Total	0.08	0.08	0.08	0.08
Average: Total Riyadh adult population involved in any type of business	2.69	1.8	1.6	2.0
Std. error: Involved in businesses	0.26	0.21	0.21	0.21
Average: Total Riyadh adult population not involved in business	1.42	1.2	1.0	1.1
Std. error: Not involved in businesses	0.09	0.09	0.08	0.08
ANOVA test, p-value for the comparison between the adults involved and not involved in businesses	0.000	0.002	0.004	0.000
Total averages
Fa: Financing: Average score for nascent entrepreneurs	3.49	4.75	4.64	4.56
Fa: Financing: Std. error for nascent entrepreneurs	0.21	0.13	0.16	0.14
Fb: Financing: Average score for new and established owner-managers	3.32	4.41	4.15	4.14
Fb: Financing: Std. error for new and established owner-managers	0.18	0.18	0.11	0.13
F: Financing: Total average score	3.42	4.62	4.40	4.39
F: Financing: Total Std. error	0.15	0.10	0.10	0.09
ANOVA test, p-value for the comparison between nascent and owner-managers	0.576	0.133	0.015	0.042

Source: Authors.

).

4.4. Talent

The talent pillar summarizes the availability, average quality in terms of labor productivity, and cost of employees to meet the current and future workforce needs of regional and local companies (

Table 7. Mean scores for talent: longitudinal description and comparison between nascent entrepreneurs and new and established owners.

Items for Pillar 4: Talent (All Scores Re-Scaled to a 0 (Lowest)—10 (Highest) Point Scale)	2019	2020	2021	2022
In Riyadh, there is no shortage of certain types of employees needed for one’s business.
Average: Nascent entrepreneurs	6.62	4.82	4.99	5.43
Std. error: Nascent entrepreneurs	0.16	0.14	0.16	0.14
Average: New and established owner-managers	4.28	5.73	4.44	4.95
Std. error: New and established owner-managers	0.20	0.19	0.14	0.17
Average: Total	5.70	5.15	4.72	5.23
Std. error: Total	0.13	0.11	0.10	0.11
ANOVA test, p-value	0.000	0.000	0.015	0.031
You can afford to hire the employees you need for your business locally.
Average: Nascent entrepreneurs	5.26	7.65	7.21	7.23
Std. error: Nascent entrepreneurs	0.16	0.13	0.14	0.13
Average: New and established owner-managers	4.25	7.44	7.64	7.35
Std. error: New and established owner-managers	0.16	0.18	0.14	0.15
Average: Total	4.78	7.57	7.42	7.28
Std. error: Total	0.12	0.11	0.10	0.09
ANOVA test, p-value	0.000	0.358	0.034	0.576
You are satisfied that the skills of the Riyadh workforce are sufficient to meet your business needs.
Average: Nascent entrepreneurs	5.01	8.21	7.45	7.25
Std. error: Nascent entrepreneurs	0.16	0.11	0.14	0.13
Average: New and established owner-managers	4.22	8.13	7.67	7.46
Std. error: New and established owner-managers	0.14	0.13	0.14	0.14
Average: Total	4.67	8.18	7.56	7.34
Std. error: Total	0.11	0.08	0.10	0.09
ANOVA test, p-value	0.001	0.655	0.271	0.307
You have the knowledge, skills, and the minimum experience required to start a new business
Average: Nascent entrepreneurs	7.86	8.63	8.86	8.42
Std. error: Nascent entrepreneurs	0.10	0.09	0.10	0.09
Average: New and established owner-managers	7.82	8.85	8.54	8.18
Std. error: New and established owner-managers	0.14	0.10	0.10	0.12
Average: Total	7.85	8.71	8.70	8.32
Std. error: Total	0.08	0.07	0.07	0.07
ANOVA test, p-value	0.788	0.155	0.029	0.138
Total averages
Ta: Talent: Average score for nascent entrepreneurs	6.32	7.33	7.13	7.09
Ta: Talent: Std. error for nascent entrepreneurs	0.08	0.06	0.06	0.06
Tb: Talent: Average score for new and established owner-managers	5.14	7.54	7.08	6.99
Tb: Talent: Std. error for new and established owner-managers	0.09	0.07	0.05	0.07
T: Talent: Total average score	5.87	7.40	7.10	7.05
T: Talent: Total Std. error	0.07	0.04	0.04	0.04
ANOVA test, p-value	0.000	0.037	0.553	0.285

Source: Authors.

).

4.5. Knowledge

The knowledge pillar summarizes the availability and access to knowledge and technologies, as well as knowledge spillovers within the region (

Table 8. Mean scores for knowledge: longitudinal description and comparison between nascent entrepreneurs and new and established owners.

Items for Pillar 5: Knowledge (All Scores Re-Scaled to a 0 (Lowest)—10 (Highest) Point Scale)	2019	2020	2021	2022
Your business is built based on the result of something you learned from a person or organization in your region.
Average: Nascent entrepreneurs	6.77	7.54	7.56	6.97
Std. error: Nascent entrepreneurs	0.12	0.14	0.14	0.13
Average: New and established owner-managers	6.58	6.58	7.43	7.04
Std. error: New and established owner-managers	0.16	0.21	0.12	0.16
Average: Total	6.70	7.19	7.50	7.00
Std. error: Total	0.09	0.12	0.09	0.10
ANOVA test, p-value	0.332	0.000	0.519	0.737
Total averages
Ka: Knowledge: Average score for nascent entrepreneurs	6.77	7.54	7.56	6.97
Ka: Knowledge: Std. error for nascent entrepreneurs	0.12	0.14	0.14	0.13
Kb: Knowledge: Average score for new and established owner-managers	6.58	6.58	7.43	7.04
Kb: Knowledge: Std. error for new and established owner-managers	0.16	0.21	0.12	0.16
K: Knowledge: Total average score	6.70	7.19	7.50	7.00
K: Knowledge: Total Std. error	0.09	0.12	0.09	0.10
ANOVA test, p-value	0.332	0.000	0.519	0.737

Source: Authors.

).

4.6. Services and Intermediaries

The support services and intermediaries pillar summarizes the access to and availability of public infrastructure, commercial and professional services, and other facilities for entrepreneurs. This paper analyzed only some of these aspects (

Table 9. Average scores for services and intermediaries: longitudinal description and comparison between nascent entrepreneurs and new and established owners.

Items for Pillar 6: Services and Intermediaries (All Scores Re-Scaled to a 0 (Lowest)—10 (Highest) Point Scale)	2019	2020	2021	2022
In your region, your new business is strongly supported by a program focused on startups (e.g., an accelerator or incubator program).
Average: Nascent entrepreneurs	5.66	7.03	7.63	6.95
Std. error: Nascent entrepreneurs	0.11	0.16	0.14	0.14
Average: New and established owner-managers	6.43	5.92	7.76	6.99
Std. error: New and established owner-managers	0.16	0.21	0.15	0.17
Average: Total	5.95	6.62	7.70	6.97
Std. error: Total	0.09	0.13	0.10	0.11
ANOVA test, p-value	0.000	0.000	0.550	0.853
In general, there are enough workshops and other training opportunities available in Riyadh to help you learn the business skills you need for your business.
Average: Nascent entrepreneurs	5,95	7.84	7.43	7.19
Std. error: Nascent entrepreneurs	0.13	0.12	0.13	0.12
Average: New and established owner-managers	6.13	7.42	7.65	7.20
Std. error: New and established owner-managers	0.15	0.16	0.14	0.16
Average: Total	6.02	7.69	7.54	7.19
Std. error: Total	0.10	0.09	0.09	0.10
ANOVA test, p-value	0.416	0.036	0.269	0.952
Total averages
Sa: Services: Average score for nascent entrepreneurs	6.09	7.44	7.53	7.07
Sa: Services: Std. error for nascent entrepreneurs	0.08	0.11	0.11	0.11
Sb: Services: Average score for new and established owner-managers	6.27	6.67	7.70	7.11
Sb: Services: Std. error for new and established owner-managers	0.11	0.15	0.12	0.12
S: Services: Total average score	6.16	7.16	7.61	7.09
S: Services: Total Std. error	0.07	0.09	0.08	0.08
ANOVA test, p-value	0.204	0.000	0.338	0.806

Source: Authors.

).

4.7. Formal Institutions

The formal institutions pillar summarizes how well political or governmental institution support for business creation is perceived and includes the rules and regulations that affect business creation (

Table 10. Average scores for formal institutions: longitudinal description and comparison between nascent entrepreneurs and new and established owners.

Items for Pillar 7: Formal Institutions (All Scores Re-Scaled to a 0 (Lowest)—10 (Highest) Point Scale)	2019	2020	2021	2022
When starting your business, it is not a serious problem to face bureaucracy and regulations.
Average: Nascent entrepreneurs	7.13	4.65	5.05	6.72
Std. error: Nascent entrepreneurs	0.15	0.13	0.15	0.13
Average: New and established owner-managers	4,40	5.39	4.34	6.96
Std. error: New and established owner-managers	0.17	0.18	0.15	0.16
Average: Total	6.09	4.91	4.70	6.82
Std. error: Total	0.13	0.10	0.10	0.10
ANOVA test, p-value	0.000	0.001	0.001	0.236
In Riyadh, it is easy to start a business, agree/disagree.
Average: Nascent entrepreneurs	6.50	8.91	8.54	8.04
Std. error: Nascent entrepreneurs	0.13	0.09	0.11	0.10
Average: New and established owner-managers	5.42	8.38	8.89	7.98
Std. error: New and established owner-managers	0.16	0.15	0.12	0.13
Average: Total	6.09	8.71	8.71	8.01
Std. error: Total	0.10	0.08	0.08	0.08
ANOVA test, p-value	0.000	0.002	0.036	0.707
Total averages
Ga: Formal Institutions: Average score for nascent entrepreneurs	6.84	6.80	6.81	7.38
Ga: Formal Institutions: Std. error for nascent entrepreneurs	0.10	0.07	0.09	0.08
Gb: Formal institutions: Average score for new and established owner-managers	4.88	6.93	6.57	7.48
Gb: Formal institutions: Std. error for new and established owner-managers	0.12	0.11	0.10	0.12
G: Formal institutions: Total average score	6.09	6.85	6.69	7.42
G: Formal institutions: Std. error score	0.09	0.06	0.07	0.07
ANOVA test, p-value	0.000	0.312	0.102	0.498

Source: Authors.

).

4.8. Culture

The culture pillar sums up the state of entrepreneurial culture within the ecosystem, including the perception of some societal values and the prevalence of good practices among entrepreneurs and owner-managers (

Table 11. Average scores for items about culture: longitudinal description and comparison between nascent entrepreneurs and new and established owners.

Items for Pillar 8: Culture (All Scores Re-Scaled to a 0 (Lowest)—10 (Highest) Point Scale)	2019	2020	2021	2022
Most people in Riyadh support individuals interested in becoming entrepreneurs.
Average: Nascent entrepreneurs	6.33	7.96	7.28	6.80
Std. error: Nascent entrepreneurs	0.14	0.11	0.14	0.13
Average: New and established owner-managers	5.13	8.29	7.48	6.93
Std. error: New and established owner-managers	0.17	0.14	0.13	0.16
Average: Total	5.87	8.08	7.37	6.85
Std. error: Total	0.11	0.09	0.09	0.10
ANOVA test, p-value	0.000	0.074	0.316	0.534
Fear of failure is not an obstacle to starting a new business.
Average: Nascent entrepreneurs	6.33	6.72	7.68	6.49
Std. error: Nascent entrepreneurs	0.14	0.16	0.19	0.17
Average: New and established owner-managers	5.13	6.32	6.93	5.72
Std. error: New and established owner-managers	0.17	0.22	0.21	0.21
Average: Total	5.87	6.57	7.31	6.17
Std. error: Total	0.11	0.13	0.14	0,13
ANOVA test, p-value	0.000	0.153	0.009	0.006
In Riyadh, most people consider starting a new business a desirable career choice.
Average: Nascent entrepreneurs	7.16	9.02	7.68	8.67
Std. error: Nascent entrepreneurs	0.12	0.08	0.19	0.08
Average: New and established owner-managers	6.61	8.88	6.93	8.53
Std. error: New and established owner-managers	0.18	0.12	0.21	0.11
Average: Total	6.95	8.97	7.31	8.61
Std. error: Total	0.10	0.07	0.14	0.06
ANOVA test, p-value	0.012	0.348	0.009	0.299
In Riyadh, those successful at starting a new business have a high level of status and respect.
Average: Nascent entrepreneurs	7.84	9.07	8.83	8.69
Std. error: Nascent entrepreneurs	0.13	0.07	0.09	0.09
Average: New and established owner-managers	7.27	9.25	9.01	8.53
Std. error: New and established owner-managers	0.15	0.09	0.10	0.12
Average: Total	7.62	9.14	8.86	8.63
Std. error: Total	0.10	0.05	0.07	0.07
ANOVA test, p-value	0.006	0.143	0.066	0.272
Total averages
Ca: Culture: Average score for nascent entrepreneurs	7.09	8.19	8.12	7.66
Ca: Culture: Std. error for nascent entrepreneurs	0.07	0.06	0.07	0.05
Cb: Culture: Average score for new and established owner-managers	6.30	8.17	7.95	7.42
Cb: Culture: Std. error for new and established owner-managers	0.10	0.08	0.08	0.08
C: Culture: Total average score	6.79	8.18	8.04	7.57
C: Culture: Total Std. error	0.06	0.05	0.05	0.04
ANOVA test, p-value	0.000	0.890	0.116	0.012

Source: Authors.

).

4.9. Physical Infrastructure

The physical infrastructure pillar summarizes the average state of the infrastructure that is critical to new and growing businesses. It includes telecommunications, transportation, and real estate (office or manufacturing space) in terms of the condition, accessibility, and cost (

Table 12. Average scores for items about physical infrastructure: longitudinal description and comparison between nascent entrepreneurs and new and established owners.

Items for Pillar 9: Physical Infrastructure (All Scores Re-Scaled to a 0 (Lowest)—10 (Highest) Point Scale)	2019	2020	2021	2022
How satisfied are you with Riyadh’s transportation infrastructure (e.g., parking, roads, and traffic flow) in relation to your business needs?
Average: Nascent entrepreneurs	6.19	8.30	8.24	8.00
Std. error: Nascent entrepreneurs	0.12	0.11	0.11	0.11
Average: New and established owner-managers	7.23	8.29	8.24	7.42
Std. error: New and established owner-managers	0.18	0.13	0.13	0.16
Average: Total	6.59	8.30	8.24	7.76
Std. error: Total	0.10	0.08	0.08	0.09
ANOVA test, p-value	0.000	0.952	0.998	0.003
How satisfied are you with Riyadh’s telecommunications and Internet access and speed for your business needs?
Average: Nascent entrepreneurs	5.46	8.67	7.88	8.22
Std. error: Nascent entrepreneurs	0.14	0.10	0.13	0.10
Average: New and established owner-managers	6.80	8.52	7.66	7.62
Std. error: New and established owner-managers	0.14	0.12	0.14	0.14
Average: Total	5.98	8.61	7.77	7.98
Std. error: Total	0.10	0.07	0.09	0.08
ANOVA test, p-value	0.000	0.387	0.264	0.001
How satisfied are you with the availability and price of additional physical space in Riyadh to grow your business relative to your business needs?
Average: Nascent entrepreneurs	4.62	8.35	7.95	7.86
Std. error: Nascent entrepreneurs	0.13	0.11	0.12	0.11
Average: New and established owner-managers	5.94	8.04	7.81	7.41
Std. error: New and established owner-managers	0.17	0.15	0.14	0.16
Average: Total	5.12	8.24	7.88	7.68
Std. error: Total	0.11	0.09	0.09	0.09
ANOVA test, p-value	0.000	0.118	0.485	0.023
Total averages
Pa: Physical infrastructure: Average score for nascent entrepreneurs	5.46	8.44	8.02	8.03
Pa: Physical infrastructure: Std. error for nascent entrepreneurs	0.10	0.08	0.09	0.08
Pb: Physical infrastructure: Average score for new and established owner-managers	6.70	8.29	7.90	7.49
Pb: Physical infrastructure: Std. error for new and established owner-managers	0.13	0.10	0.11	0.13
P: Physical infrastructure: Total average score	5.93	8.39	7.96	7.81
P: Physical infrastructure: Total Std. error	0.08	0.06	0.07	0.07
ANOVA test, p-value	0.000	0.266	0.429	0.000

Source: Authors.

).

4.10. Demand

The demand pillar summarizes the average state of market dynamics, including the size and growth of the regional market and access to external markets. However, in this work we focused exclusively on the potential demand (

Table 13. Average scores for items related to demand: longitudinal description and comparison between nascent entrepreneurs and new and established owners.

Items for Pillar 10: Demand (All Scores Re-Scaled to a 0 (Lowest)—10 (Highest) Point Scale)	2019	2020	2021	2022
In the next six months, there will be good opportunities for starting a business in the area where you live.
Average: Nascent entrepreneurs	7.85	8.82	9.05	8.25
Std. error: Nascent entrepreneurs	0.14	0.08	0.08	0.10
Average: New and established owner-managers	6.39	8.02	8.90	8.05
Std. error: New and established owner-managers	0.21	0.15	0.12	0.14
Average: Total	7.29	8.53	8.98	8.17
Std. error: Total	0.12	0.08	0.07	0.08
ANOVA test, p-value	0.000	0.000	0.306	0.261
Total averages
Da: Demand: Average score for nascent entrepreneurs	7.85	8.82	9.05	8.25
Da: Demand: Std. error for nascent entrepreneurs	0.14	0.08	0.08	0.10
Db: Demand: Average score for new and established owner-managers	6.39	8.02	8.90	8.05
Db: Demand: Std. error for new and established owner-managers	0.21	0.15	0.12	0.14
D: Demand: Total average score	7.29	8.53	8.98	8.17
D: Demand: Total Std. error	0.12	0.08	0.07	0.08
ANOVA test, p-value	0.000	0.000	0.306	0.261

Source: Authors.

).

Similar to ref. [3], in our analysis, the pillars that made up the quality of an entrepreneurial ecosystem were divided into systemic factors (networking, leadership, finance, talent, knowledge, and services) and environmental factors (culture, formal institutions, physical infrastructure, and demand).

Table 14. Aggregate average scores of emerging entrepreneurs, new and established business owners, and residents of Riyadh for the ten pillars that make up the quality of the entrepreneurial ecosystem: rankings of the pillars from highest to lowest each year.

	2019		2020		2021		2022
Demand	7.29	Demand	8.53	Demand	8.98	Demand	8.17
Culture	6.79	Physical infrastructure	8.39	Culture	8.04	Physical infrastructure	7.81
Knowledge	6.70	Culture	8.18	Physical infrastructure	7.96	Culture	7.57
Leadership	6.48	Talent	7.40	Services	7.61	Formal institutions	7.42
Services	6.16	Knowledge	7.19	Knowledge	7.50	Services	7.09
Formal institutions	6.09	Services	7.16	Talent	7.10	Talent	7.05
Physical infrastructure	5.93	Formal institutions	6.85	Formal institutions	6.69	Knowledge	7.00
Talent	5.87	Leadership	6.61	Leadership	6.54	Leadership	6.97
Networking	5.13	Networking	6.15	Networking	6.37	Networking	6.53
Financing	3.42	Financing	4.62	Financing	4.40	Financing	4.39

Source: Authors.

shows the status of the pillars each year between 2019 and 2022.

Finally,

Table 15. Change (%) on the pillars’ perception between the years 2019 and 2022.

Pillar	% Change 2022/2019
Physical I. (framework)	31.70
Finance (systemic)	28.36
Networking (systemic)	27.29
Formal I. (framework)	21.84
Talent (systemic)	20.10
Services (systemic)	15.10
Demand (framework)	12.07
Culture (framework)	11.49
Leadership (systemic)	7.56
Knowledge (systemic)	4.48

Source: Authors.

shows the progress made between 2019 and 2022 in the perception of the pillars by nascent entrepreneurs and owner-managers as a whole.

Table 16. Hypotheses tested and their results.

Hypothesis: On average, nascent entrepreneurs and new and established owner-managers, show opinions/actuations that can be considered statistically equal or at the same level
To interpret the conclusions, NE = nascent entrepreneurs and OM = new and established owner-managers	Conclusions
	2019	2020	2021	2022
Attend local business networking events with a similar frequency	NE > OM	NE > OM	NE = OM	NE = OM
Consider that, in Riyadh, it is easy to get in touch with other owner-managers of young business personally.	OM > NE	NE = OM	OM > NE	NE = OM
Consider that if you need any advice or help regarding your business, you can easily find the right people through your network.	NE > OM	NE = OM	OM > NE	NE = OM
Most business owner-managers in the same industry and region as you actively participate in at least one local business network.	OM > NE	NE = OM	NE = OM	NE = OM
You know someone personally who started a business in the past 2 years	OM > NE	NE = OM	NE > OM	OM > NE
Consider that, in Riyadh, you will often see businesses that primarily aim to solve social problems.	NE > OM	Not measured	OM > NE	NE = OM
Networking average perception	OM > NE	NE = OM	OM > NE	NE = OM
Get advice on your new business through mentoring from established entrepreneurs in Riyadh.	NE = OM	NE > OM	NE = OM	NE = OM
Provide mentoring advice to new business owners and managers	OM > NE	NE = OM	NE = OM	NE = OM
A startup or business in your area was a strong influence on your decision to start your own business.	NE = OM	NE > OM	OM > NE	NE = OM
Leadership average perception	OM > NE	NE > OM	OM > NE	NE = OM
In your opinion, there are sufficient sources of external seed capital in Riyadh.	NE > OM	NE > OM	NE = OM	OM > NE
Acting as an informal investor	NE = OM	NE = OM	NE > OM	NE > OM
Finance average perception	NE = OM	NE = OM	NE > OM	NE > OM
In Riyadh, there is no shortage of certain types of employees needed to run a business.	NE > OM	OM > NE	NE > OM	NE > OM
You can afford to hire the people you need to run your business locally.	NE > OM	NE = OM	OM > NE	NE = OM
You are satisfied that the skills of the Riyadh workforce are sufficient for your business needs.	NE > OM	NE = OM	NE = OM	NE = OM
You have the knowledge, skills, and experience to start a new business.	NE = OM	NE = OM	NE > OM	NE = OM
Talent average perception	NE > OM	OM > NE	NE = OM	NE = OM
Your business is built on what you have learned from a person or organization in your area.	NE = OM	NE > OM	NE = OM	NE = OM
Knowledge average perception	NE = OM	NE > OM	NE = OM	NE = OM
Your new business is strongly supported by a regional program designed to help start businesses (e.g., an accelerator or incubator program).	OM > NE	NE > OM	NE = OM	NE = OM
In general, there are enough workshops and other training opportunities accessible in Riyadh to learn the business skills you need for your business.	NE = OM	NE > OM	NE = OM	NE = OM
Services and intermediaries average perception	NE = OM	NE > OM	NE = OM	NE = OM
The bureaucracy and regulations you encounter when starting your business are not serious problems.	NE > OM	OM > NE	NE > OM	NE = OM
In Riyadh, it is easy to start a business, agree/disagree.	NE > OM	NE > OM	NE = OM	NE = OM
Formal institutions average perception	NE > OM	NE = OM	NE = OM	NE = OM
Most people in Riyadh are supportive of individuals who are interested in becoming entrepreneurs.	NE > OM	NE = OM	NE = OM	NE = OM
Fear of failure is not a barrier to starting a new business.	NE > OM	NE = OM	NE > OM	NE > OM
In Riyadh, most people consider starting a new business a desirable career choice.	NE > OM	NE = OM	NE > OM	NE = OM
In Riyadh, those who are successful in starting a new business have a high level of status and respect.	NE > OM	NE = OM	NE = OM	NE = OM
Culture average perception	NE > OM	NE = OM	NE = OM	NE > OM
Satisfaction with transportation infrastructure (e.g., roads, parking, traffic flow)	OM > NE	NE = OM	NE = OM	NE > OM
Satisfaction with telecommunications; Internet access and speed	OM > NE	NE = OM	NE = OM	NE > OM
Satisfaction with the price and availability of additional physical space to grow your business	OM > NE	NE = OM	NE = OM	NE > OM
Physical infrastructure average perception	NE = OM	NE = OM	NE = OM	NE > OM
In the next six months, there will be good opportunities to start a business in the area where you live.	NE > OM	NE > OM	NE = OM	NE = OM
Demand average perception	NE > OM	NE > OM	NE = OM	NE = OM

Source: Authors.

summarizes all the hypotheses tested and their results. The significant results and their signs have been mentioned in bold. Nascent entrepreneurs include new entrepreneurs starting a business with the age of up to 6 months and owner-managers include business up to 3.5 years.

5. Discussion

Table 4, Table 5, Table 6, Table 7, Table 8, Table 9, Table 10, Table 11, Table 12, Table 13, Table 14, Table 15 and Table 16 and Figure 3, Figure 4, Figure 5, Figure 6, Figure 7, Figure 8, Figure 9, Figure 10, Figure 11 and Figure 12 extensively describe the perception and evolution of the 10 pillars that shaped the quality of the entrepreneurial ecosystem in Riyadh, following Stam’s vision from the perspective of the key actors involved (nascent entrepreneurs on the one hand and new and established owners on the other), as well as collectively. They also contrast the wide range of hypotheses about the behavior of these two groups, regarding their perceptions of the state of these pillars.

In this section, the conclusions that can be drawn from these contrasts are presented in the following summarized figures and tables. Subsequently, the conclusions derived from the results obtained regarding each pillar are discussed.

5.1. The Networking Results

As we have shown in Table 4, the assessment of the Riyadh entrepreneurial ecosystem network showed a positive evolution between 2019 and 2022. A significant improvement between 2019 and 2020 could be attributed to the intensification of online communication during the pandemic lockdown. Since then, this change has been maintained and even improved in all the aspects analyzed over the period. However, it is also true that Riyadh has witnessed an increased number of events related to entrepreneurship, such as annual conferences like LEAP, RISE-UP, STEPS, Biban events organized by Monsha’at (the national small and medium enterprises development authority), and GEN (Global Entrepreneurship Network) events in recent years, which have had a very positive impact on the ecosystem.

Emerging entrepreneurs seemed to be more active than owner-managers in attending local business networking events, especially in 2019. However, since then, owner-managers have increased their participation, and in the last two years, the two groups have been practically equal. This finding was consistent with the commented intensification of entrepreneurship events celebrated in Riyadh in previous years.

The perception that it is easy to personally connect with other owners of young companies in Riyadh seemed to be much more accurate for owners than for emerging entrepreneurs in 2019, but this changed significantly for the better during the pandemic, and now both groups seem to be practically equal in this aspect.

The same can be said for the perception that “if you need advice or help with your business, you can easily find the right people through your network”. Similarly, there was a significant and positive change in the perception that most owner-managers in the same industry and region actively participated in at least one local business network. The differences between emerging entrepreneurs and owner-managers have almost disappeared, and the perception is significantly better.

Owner-managers used to report higher proportions of knowledge over other entrepreneurs, but the pandemic has affected this perception. As a result, the reported share decreased significantly in 2020 and 2021 and recovered in 2022. In the case of nascent entrepreneurs, the longitudinal analysis showed the same picture, but with lower knowledge rates.

Nascent entrepreneurs were much more aware of the existence of enterprises with social components in 2019, but the situation changed significantly and since 2021 both groups increased this perception significantly. The pandemic increased the visibility and involvement of companies in social activities and actions, which continued until 2022 and was reported by both groups at similar levels.

5.2. The Leadership Results

As seen in Table 5, in terms of leadership, entrepreneurs and owner-managers operating in the Riyadh ecosystem have had a significantly positive perception since 2019. This perception experienced a slight dip during the lockdown period for owner-managers, and a similar effect was observed for entrepreneurs in 2021. However, they have since recovered and resumed their upward trajectory in 2022.

The Riyadh ecosystem is seen as a collaborative and inspiring environment, characterized by significant mentoring activities. Entrepreneurs have found and continue to find role models who inspire them to start their businesses.

5.3. The Results on Financing

As shown in Table 6, financing within Riyadh’s entrepreneurial ecosystem was assessed based on two critical factors: the availability of external seed funding and informal investment. In 2019 and 2020, emerging entrepreneurs showed a more positive perception compared to business owners. In 2021, however, both groups showed higher scores, indicating an overall improvement. Nevertheless, the level of participation in informal financing remains lower among business owners compared to nascent entrepreneurs. Consequently, there is still room for improvement in this aspect, although the availability of external sources of startup funding is highly rated, especially in the post-pandemic era. Notably, the low average score in 2019 clearly indicated a significant shift towards a more positive perception of startup funding from 2020 onwards.

The government started several initiatives for mainstream and alternative financing during and after the pandemic. The Saudi Venture Capital Company (SVC), formulated to facilitate the availability of venture funding, has backed since its inception 43 private capital (venture capital, private equity, venture debt, and private debt) funds that have supported 700+ startups and SMEs via $2 billion in assets under management. Another noteworthy example is an initiative by Monsha’at, in collaboration with the Ministry of Investment, for providing financial support to entrepreneurs and small and medium enterprises to reduce financing gaps to support their establishment, growth, and sustainability.

According to a recent report by [30], Saudi Arabia has improved significantly in the rankings among MENA region countries for venture investment with major deals, such as $170 million Series C by Foodics, $100 million Series B by FinTech Tamara, and $100 million Series C by TruKKer. Moreover, a record year in 2022 witnessed unprecedented funding, both for formal and informal investment.

5.4. The Results on Talent

As shown in Table 7, the availability of talent in Riyadh’s entrepreneurial ecosystem, along with other aspects of its quality, has changed for the better since the pandemic. The factor that ecosystem actors have relied on the most is their ability and experience in starting and managing businesses. On the other hand, the weakest aspect in this regard has been the presence of certain types of professional profiles to hire. On this issue, nascent entrepreneurs were generally slightly more optimistic than owner-managers, but the issue is not yet fully resolved. However, entrepreneurs and owner-managers agree that they can find the employees they are looking for locally, especially since 2020, and they are also quite satisfied with the level of education of these employees.

5.5. The Results on Knowledge

As seen in Table 8, the perception of knowledge, measured as the ability to learn from successful business examples within the ecosystem, was very positive in the case of Riyadh. This perception remained stable from 2019 to 2020 and even reached a slightly higher level in 2021, possibly due to the innovation efforts required for economic recovery from the impact of the pandemic on the local business community. These circumstances forced economies to look inward and reduce their external dependence. In conclusion, this element appeared to be one of the most robust and well-established aspects of the ecosystem.

5.6. The Results for Services and Intermediaries

As shown in Table 9, another solid element of the Riyadh environment was the perception of ecosystem actors regarding the support they received from business incubation and development programs, incubators, accelerators, and similar initiatives. Both nascent entrepreneurs and business owners and managers had a positive perception, which has improved since the pandemic. The government’s commitment to economic transformation goals and its strong focus on entrepreneurship and diversification were reflected in these results. The availability of resources to train people in business creation and management was also perceived positively. Again, government actions to promote this type of education, at least at the higher levels, were numerous and, in line with the general commitment to entrepreneurship, the best way to achieve economic transformation from oil to other sectors.

5.7. The Results Related to Formal Institutions

As seen in Table 10, the institutional support for the ecosystem, as measured by the extent to which bureaucratic processes pose a challenge to starting a business and the ease of integration into the Riyadh market, has shown a reasonably positive assessment since 2020. Moreover, the opinions of both nascent entrepreneurs and business owner-managers have become more aligned. The highest ratings were achieved in 2020 and 2021, possibly due to the government’s efforts to mitigate the economic impact of the pandemic. In 2022, the perceptions remained relatively stable, although slightly below those of the previous years.

5.8. The Results on Culture

As displayed in Table 11, highly valued by both Riyadh’s population and its budding entrepreneurs and business owners, the cultural background of the city’s ecosystem is its most valuable asset. The perception of societal support for entrepreneurship reflected the Saudi government’s commitment to its development. This support was already high in 2019 and, in the following years, especially in 2020 during the lockdown, ecosystem actors demonstrated their courage to face the situation, reducing the fear of failure and highlighting that entrepreneurship was supported by the population and was successful in the field.

5.9. The Physical Infrastructure Results

As expressed in Table 12, the adequacy of physical infrastructure to meet the needs of entrepreneurs in Riyadh has improved significantly since 2020. While it was considered sufficient in 2019, it was not considered excellent. In 2020, the perceptions improved significantly across all indicators related to this issue. However, the group of emerging entrepreneurs rated these resources slightly better than owner-managers. In 2021 and 2022, the latter group slightly penalized them, possibly due to the increased costs resulting from the inflation caused by the Ukrainian conflict. Nevertheless, it can be said that the Riyadh ecosystem is currently well supported by physical infrastructure. The government (through Monsha’at) has launched the initiative for developing and operating business accelerators and incubators and has been providing incentives to the sector to establish accelerators and incubators that contribute to supporting entrepreneurs. Notable examples include the MISK accelerator, Code by MCIT, The Garage by KACAST, and more. An emphasis has been made to develop these in priority areas, such as sports, digital content, and computer gaming, etc. Moreover, Monsha’at has also launched an innovation centers initiative focusing on the specific innovative areas aimed at building the capabilities of entrepreneurs and small and medium enterprises and benefiting from their ideas to develop marketable products.

5.10. The Results on Demand

As seen in Table 13, the perception of the potential demand among the population of Riyadh, aspiring entrepreneurs, and business owners was quite positive. In 2019, the rating was already high, but from 2020 onwards, it became very high, indicating that the ecosystem is developing and has excellent prospects.

5.11. Discussion of the Overall Evolution of the Perceptions of the Ten Pillars

According to Stam’s theory, the systemic pillars are the ones that make the biggest difference between high quality ecosystems and those that are not. Thus, the framework pillars are more externally provided and less dependent on the actors within the system themselves, but rather serve as a support. Therefore, the systemic pillars are an excellent reflection of the actors’ actions and the innovation they bring to the development of the ecosystem.

The position of some of these pillars has remained relatively stable (see Table 13), and their consistent placement at the top identifies them as the stronghold of the ecosystem. For example, demand consistently ranked first each year, except in 2020 due to the impact of the pandemic. Culture fluctuated between second and third place. Physical infrastructure improved from sixth to first place in 2020 and fluctuated between third and second place since then. Knowledge, on the other hand, made less progress and, although rated well, fell from third place in 2019 to eighth in 2022, although not far from seventh and sixth. The most important aspect of this result was the recognition that, although the systemic conditions are improving, the framework conditions still prevail. The most critical case is financing, which, despite being a systemic condition, consistently ranked last, ranging between sufficiency and near-sufficiency. This pillar requires the most attention among those analyzed.

Looking at Figure 12, it is clear that the framework conditions have evolved more significantly. However, there were significant improvements in the systemic conditions, with the exception of funding/financing, which emerged as the one that requires the most attention.

In detail, looking at Table 14, we can see that among the pillars that have improved the most, there were two systemic (networking and talent) and two environmental (physical infrastructure and formal institutions) pillars. However, those that made the least progress were all systemic (leadership, financing, and knowledge).

Focusing on improving the systemic pillars is crucial for Riyadh to achieve a differentiated status compared to other ecosystems in different continents. Moreover, competing with emerging ecosystems in the Middle East is even more critical. By addressing the areas that have shown the least progress, actors within the system can push Riyadh to become a more competitive, distinctive, and dynamic ecosystem.

6. Conclusions

The Riyadh entrepreneurial ecosystem plays a prominent role in the Middle East as one of the key drivers of entrepreneurship and innovation in the region. One of the main reasons is that the Vision 2030 initiative in Saudi Arabia has established ambitious objectives aimed at achieving economic diversification and diminishing its reliance on oil. At the core of this idea is the establishment of a robust entrepreneurship environment. The government has undertaken many efforts aimed at providing support to startups, encompassing regulatory improvements, facilitating access to capital, and fostering infrastructural development, which has helped to develop and grow the Riyadh entrepreneurial ecosystem.

The main findings of the study are as follows.

First, Riyadh’s entrepreneurial ecosystem aims to promote economic development, foster job creation, drive economic diversification, and position Riyadh as a reference center for startups and emerging companies in the region. Several elements support these goals. First, Riyadh has a robust infrastructure, including modern facilities, co-working spaces, and incubation centers that provide a conducive environment for the development of new businesses. In addition, the government has implemented policies and programs that encourage entrepreneurship and investment in startups, such as streamlining bureaucratic procedures, establishing investment funds, and encouraging collaboration between the public and private sectors.

Second, the entrepreneurial ecosystem in Riyadh has experienced remarkable growth, where emerging entrepreneurs seem to be more active than owner-managers in attending local business networking events. As a result, the entrepreneurial ecosystem has expanded from a limited number of small and medium-sized enterprises prior to the implementation of Vision 2030 to innovative technology startups that have had a significant impact on improving quality of life. This growth has occurred over a span of six years, despite the challenges posed by a global pandemic. In the year 2022, the Kingdom of Saudi Arabia ranked second among Arab nations in terms of overall investment value. Saudi startups received a substantial amount of US$1.2 billion in funding, encompassing venture, corporate, and equity capital. Saudi Arabia ranked third in the area in terms of the number of signed deals, with a total of 91, trailing behind the United Arab Emirates and Egypt [30]. Riyadh, being the political and financial capital of the Kingdom, has benefited immensely from all the investments of resources by the public and private sectors.

Third, since the pandemic, there has been greater openness between established pre-pandemic entrepreneurs and newcomers, which has increased the dynamism within the entrepreneurial system and made it easier to do business. This has encouraged the creation of startups and their rapid acceleration, thus strengthening the entire ecosystem. As the influx of investors into the market increased, a corresponding rise in the number of startup founders was observed. In Riyadh, there has been a noticeable rise in the number of experienced professionals who are choosing to go from their long-standing, distinguished employment spanning two decades, to establish their own startup ventures [31]. It is not solely limited to the demographic of young individuals who have recently completed their education and are enthusiastic and eager to embark on their professional journeys. This observation provides significant insight into the ongoing cultural transformation occurring in the Kingdom, as a growing number of Saudi individuals aspire to pursue entrepreneurship—an aspiration that was largely uncommon a decade ago. However, this trend also demands more training and business development programs to strengthen the skills of entrepreneurs and improve their ability to scale their businesses.

Fourth, the entrepreneurial ecosystem in Riyadh encompasses a diverse range of areas, such as fintech, e-commerce, healthcare, and renewable energy. The Kingdom’s youthful demographic, characterized by their proficiency in technology, along with the growing rate of digital integration, offers a substantial market for pioneering solutions. Startup companies are utilizing nascent technologies, such as artificial intelligence, blockchain, and the Internet of Things (IoT), to tackle both local and global issues. Riyadh’s entrepreneurial ecosystem also benefits from an active community of entrepreneurs, mentors, and investors who provide support, knowledge, and resources to entrepreneurs. However, the government has implemented several initiatives involving various stakeholders to promote entrepreneurship in different sectors. These include Monsha’at, SVC, Jada, the Central Bank, as well as regulatory authorities and government entities that provide support to startup founders and contribute to the growth of the entrepreneurial ecosystem in Riyadh. However, some elements need to be strengthened to move forward in achieving these goals. For example, there is still a need for a greater diversification of funding sources, both in terms of seed capital and venture capital, to ensure the sustainable growth of startups.

Fifth, it is also important to promote collaboration and knowledge sharing among different ecosystem stakeholders at the local and international levels to leverage the best practices and successful experiences from other entrepreneurial ecosystems. In conclusion, Riyadh’s entrepreneurial ecosystem plays a critical role in the Middle East region, with aspirations for economic development and regional leadership. Strengthening key elements of the ecosystem, such as financing, entrepreneurship education, and collaboration among stakeholders, is essential to progress toward these goals.

Sixth, we found that among the ten pillars studied, there were four that improved the most in the Riyadh entrepreneurial ecosystem: two systemic (networks, talent) and two environmental (physical infrastructure and formal institutions), while it was in the systemic pillars (leadership, financing, and knowledge) that the least progress was made in the period 2019–2022.

Finally, the limitations of this work were due to its local and not general nature, having analyzed only the entrepreneurial system of Riyadh, which makes its conclusions applicable to this entrepreneurship hub and has some peculiarities compared to other hubs in other countries. In future studies, we will compare Riyadh with other entrepreneurship hubs in other MENA countries so that the conclusions of the study can be applied to more general settings.