Title: Fostering innovation through startups: an exploration into the anatomy of

emerging entrepreneurial ecosystems of Kingdom of Saudi Arabia.

Abstract:
In the landscape of entrepreneurial ecosystems of emerging markets, startups and innovations
are dynamic in nature, which is shaped by availability of resources, obstacles, and stakeholders.
With a focus on Saudi Arabia, an emerging market with a host of startups, an extensive
literature review is conducted to understand the nuances of promoting innovation through
startups. The study aims to examine the multifaceted dimensions of entrepreneurial ecosystem
of Saudi Arabia. A qualitative approach (interviews and case studies) is adopted for the study.
The research work explores the entrepreneurial mindset among the Saudi citizens, their
intentions, skills, driving force towards entrepreneurial activities. It also examines the effects
of government policies, access to funds for startups and presence of good infrastructures in
promoting innovations.
The study observed that…………………….
The study could be helpful to the different stockholders of the Saudi Arabian ecosystem in
understanding the business environment as a whole, factors behind the growth of startups. It
may also be helpful to the government and policy making bodies to make strategies to enhance
business environment and foster innovations through startups.

Keywords: Entrepreneurial ecosystems, emerging markets, innovation, risk-taking,

proactiveness, sustainability, inclusivity, collaboration, digital transformation.
1. Introduction:
In the dynamic landscape of emerging markets, the heartbeat of economic growth resonates
within the vibrant fabric of startups. This study seeks to shed light on the experiences of startups
as they navigate the intricate pathways of innovation, risk-taking, and proactiveness in order to
assess how well these emerging markets entrepreneurial ecosystems support the creation of
startups.
Emerging markets, characterized by rapid economic development and transformative shifts,
provide fertile ground for the sprouting of startups. Agtmael coined the term "Emerging
markets" while working for the International Finance Corporation (Bajpai, 2023). The category
of emerging markets encompasses three distinct groups, defined by income levels: low-income,
characterized by a Gross National Income (GNI) per capita of $1,025 or less; lower middle-
income, with a GNI per capita ranging between $1,026 and $4,035; and upper middle-income,
spanning GNI per capita values between $4,036 and $12,475 (Startup Genome, 2023). Startups,
are often born out of necessity and fuelled by a spirit of resilience, play a pivotal role in shaping
the economic growth path of their respective country. Unlike their counterparts in developed
markets, startups in emerging markets face unique challenges, and come with new
opportunities which demand a nuanced understanding of the ecosystems that nurture their
growth. Innovation is defined as successfully bringing new ideas into the market, which
requires investment and entails some level of risk. Innovation is a continuous pursuit of
improvement and creative thinking which drives positive change in various facets of industry
and development for progress. It can materialize through diverse forms, including introduction
of cutting-edge technology, novel product lines or segments, innovative production processes,
or an improvement of existing products. Innovation is the means by which entrepreneurs either
create new wealth-producing resources or tap the potential of existing resources to generate
wealth. It is, therefore, an inherent function of entrepreneurship.
Several theories have been presented to model this aspect of ecosystem like Ajzen's Theory of
Planned Behavior (1991) and the Entrepreneurial Event Model by Shapero & Sokol (1982),
and Theory of Innovation and Entrepreneurship (TIE) (Drucker, 1985). The TPB, and EVM
models states that innovative thinking , proactiveness, and risk taking abilities are key
entrepreneurial traits which drives development of new products early, use of smart marketing
strategies, or adoption of new cutting-edge technology quickly, demonstrating positive
thinking and forward-looking approach. It is noteworthy that when individuals see themselves
as capable and opportunities as viable, they're more likely to take the leap into
entrepreneurship. The TIE extends this and adds that some external forces/unexpected events
are required to make individuals take risks and adopt entrepreneurial lifestyle. He also stressed
that newer technologies replace older technologies through technological innovation.
Another aspect of any ecosystem is the set of factors that contribute to make doing business
easier. This is well explained by Institutional Theory (North, 1990) which is often termed as
lens for corporate governance model. It highlights the roles of social, political and economic
systems can influence organizational behavior and drive change. It relates to - how formal and
informal institutions, regulatory and cultural norms, influence startup behaviour. These factors,
such as government policies, the presence of world-class educational institutions or research
labs, along with early access to funds, can be collectively termed under the umbrella of "Ease
of Business". The ease of doing business and perceptions of government support are crucial in
attracting investment to a specific market, ultimately reflected in the performance of businesses
and the economic growth of the country.
World-class educational and research institutes, such as the Manchette Institute of Technology
in the USA and the IITs in India, not only train and provide skilled manpower but also often
serve as incubation centres for entrepreneurial activities. The presence of venture capital and
positive government financial policies that provide easy access to funds for startups contribute
to the favourable environment that fosters innovation and startup. Kingdom of Saudi Arabia
has taken several initiatives to improve the ease of doing business by providing easy access to
funds for startups and key policy changes. The creation of the Small to Medium Enterprises
General Authority (Monshaa’t) in 2016 is a pivotal step in improving ease of doing business,
streamlining support for SMEs by addressing regulatory barriers, offering access to finance,
and providing marketing assistance. It has introduced strategic initiatives, including the
establishment of the Saudi Venture Capital Company (SVC) and MiSK Innovation, promoting
a conducive environment for startups with expert support and streamlined entry to markets.
Startups will benefit from a three-year exemption from commerce taxes for small and medium-
sized firms (SMEs) (Abboud, 2024). The overhaul of bureaucratic processes in the past years
have further accelerated the establishment of new startups, reflecting a commitment to ease of
business for entrepreneurs.
This study delves into the startup ecosystem, exploring the interplay of innovation and ease of
doing businesses. It enables a comprehensive understanding of how entrepreneurial
endeavours, financial systems, and innovation intersect within the startup ecosystem in
emerging markets with a focus on the context of Saudi Arabia.
1.1 Problem Statement:
In the landscape of entrepreneurial ecosystems in Saudi Arabia, startups play a pivotal role in
driving innovation, economic growth, and job creation. However, there are knowledge gaps in
how the entrepreneurial ecosystem work, making it hard to develop effective strategies for
encouraging innovation and lasting entrepreneurship. The identified areas of concern are:
• There is a shortage of a comprehensive and cohesive theoretical framework that
addresses the multifaceted dimensions of entrepreneurial ecosystems in Saudi Arabia.
• There are limited insights into the specific challenges and opportunities faced by
startups in emerging markets, particularly in terms of innovation, risk-taking, and
proactiveness.

1.2 Significance
The goal of this study is to explore how entrepreneurial ecosystem in Saudi Arabia supports
innovation through startups. The findings of this study may provide valuable insights for
developing strategies to nurture innovation and foster startup growth. By understanding the
factors influencing entrepreneurial behavior and innovation, policymakers can adapt
regulations to better assist startups and promote innovative ecosystems. Additionally, investors
and venture capitalists can use present study's conclusions to identify promising enterprises
and potential investments, potentially leading to increased economic growth. The governments
may take initiatives to promote knowledge exchange, strengthen research institutions, establish
networks of support for entrepreneurs, ease the fund access, and organise startup promotional
events.

2. Literature Review: Theoretical Background

Agtmael coined the term "Emerging markets" while working for the International Finance
Corporation (Bajpai, 2023). The category of emerging markets encompasses three distinct
groups, defined by income levels: low-income, characterized by a Gross National Income
(GNI) per capita of $1,025 or less; lower middle-income, with a GNI per capita ranging
between $1,026 and $4,035; and upper middle-income, spanning GNI per capita values
between $4,036 and $12,475 (Startup Genome, 2023). The ten largest emerging markets that
constitute 31% of the world’s nominal GDP are, China, India, Brazil, South Korea, Mexico,
Indonesia, Saudi Arabia, Turkiye, Taiwan, and Poland (Bajpai, 2023). A study by Startup
Genome (2023) shows that Europe has largest percentage of emerging market share (41%) as
shown in Figure 1. Notably, the Middle Eastern and North African (MENA) countries have
comparatively lower share of 4% in this ecosystem, slightly more than the sub-Saharan Africa,
and Oceania region.

EMERGING ECONOMY
2%
Europe 4%3%
North America 5%
Asia
Latin America 16% 41%
MENA
Sub-Saharan Africa
Oceania

29%
 Fig. 1: Share of Emerging markets (Startup Genome, 2023)
2.1 Entrepreneurial ecosystem
Moore coined the term “Ecosystem” in his article published in Harvard Business Review
during the 1990s. He stressed that businesses operate in an environment comprising of
interconnected firms, suppliers, financiers, and customers (Moore, 1993). This environment,
termed as ecosystem, facilitates entrepreneurs to discover opportunities, introduce innovative
products, collaborate with established enterprises to develop and scale up the business. The
entrepreneurial ecosystem is defined as a dynamic and interconnected network of
entrepreneurs, investors, policymakers, educational institutions, and support organizations.
These ecosystems bring together various elements such as social networks, support
organizations, infrastructure, and cultural norms that facilitate entrepreneurial activities (Li,
2010). They are the wheels of development. Growth and development of any country are
directly linked with the promotion of entrepreneurial ecosystem of the country. The public-
private model in fostering entrepreneurial education has a significant and positive result in
improving attitude and intention of public towards entrepreneurship (Silveyra et al., 2021).
Entrepreneurial ecosystems play a crucial role in fostering innovative start-ups (Hassen, 2020).
For the growth of entrepreneurial ecosystem, awards, recognition, and innovation promoting
activities are important tools which encourages startups, and entrepreneurs to come with
innovative ideas to foster growth and development (AlAstal, 2023). Thus, ecosystem acts as
catalyst to encourage startups to move forward for growth and provide essential nutrients for
their incubation and success.).
The ecosystem comprises of human resources with entrepreneurial mindset which is the most
important driving force behind successful enterprises and ever growing ecosystems.
Isenberg is one of the frameworks contributed significantly to entrepreneurship ecosystems
(Brown, 2014). It emphasized that successful entrepreneurship is not just about the individual
entrepreneur or startup but is embedded in a broader system or ecosystem. The frameworks
encompass six domains with twelve sub-elements including policy, markets, human capital,
finance, culture, institutional and infrastructural supports.
One of the components of the Isenberg that explains the dynamic of entrepreneurial ecosystem
is policy regulated by the government. Promoting innovation and entrepreneurship throughout
the nation or within a specific region is an essential responsibility of the government
(Fuerlinger et al., 2015). Additionally, it refers to the degree to which government and
leadership not only endorse and promote entrepreneurial endeavours but also establish rules
and regulations to oversee them (Liguori et al., 2018).
Another domain in Isenberg that shapes the dynamic of entrepreneurial ecosystem is market.
It is the extent to which entrepreneurs have access to early adopters, distribution channels
(Liguori et al., 2018), and network of entrepreneurs and multinational corporations (Silva et
al., 2021). It also encompasses of proficiency in product development, establishing reference
customers, and receiving initial reviews (Ali et al., 2021).
Human capital is the third domain in Isenberg. It involves having a skilled labour force and
efficient educational institutions that foster and endorse entrepreneurship (Ashri, 2013). The
cultivation of human capital is essential for securing sustainable economic advantages.
One of the most significant contributions of a healthy entrepreneurial ecosystem is providing
the financial resources required to start or expand a business (Karaki, 2021) as indicated in
Isenberg. Suitable financing involves exploring debt and equity funding options accessible to
entrepreneurs, including bank loans, and venture capital.
Culture is another domain in Isenberg that reveals an inspiring culture which enhances the
social standing of entrepreneurs, shares success stories, and encourages risk-taking and
experimentation (Ashri, 2013). The entrepreneurial ecosystem is significantly influenced by
the cultural context and societal attitudes, as evidenced by people's perspectives on
entrepreneurship, the prevailing conditions, and expectations related to initiating a business
(GEM, 2012).
To foster the development and expansion of entrepreneurial businesses, it is imperative that
entrepreneurs have access to resources as a support, the final domain in Isenberg. Hence,
institutional support plays a crucial role in the sustainability of entrepreneurial activities,
serving as a means of promotion, facilitation, and support.
In the 2023 Global Startup Ecosystem Index, Saudi Arabia was lagging at 66th position,
emphasizing the need to foster innovation and entrepreneurship in order to drive economic
growth and technological advancements (reference: Global Startup Ecosystem Index). The
significance lies in the creation of dynamic innovation hubs that not only contribute to job
creation and attract investments but also enhance the nation's global competitiveness. However,
challenges emerge for countries with lower rankings, indicating potential obstacles such as
regulatory complexities, limited funding, and insufficient infrastructure. Bridging these gaps is
essential to ensure a conducive environment for startups to flourish globally, fostering
economic development and technological progress. The stockholders of an entrepreneurial
ecosystem could be categorized as individuals with entrepreneur aspirations, and the systems
facilitating and encouraging them, thus the factors influencing an entrepreneurship are
Innovation and Entrepreneurship, and the Ease of Business. These two aspects have been
described in the following paragraphs.
2.2 Innovation and Entrepreneurship
The Theory of Planned Behavior (TPB) has become one of the most utilized theories in terms
of explaining and predicting behaviours of individuals. The TPB’s main assertions are that
behavior is preceded by one’s intentions to perform the behavior and perceived control over
the behavior (Ajzen 1991). According to the TPB, an individual's aspirations as an entrepreneur
include their desire and commitment to engage in entrepreneurial activities. A person's startup
intention is a tangible manifestation of their intent to launch and manage a business. The level
of effort people is willing to put into completing a particular task is shown by their intentions,
which are a representation of the motivational variables affecting and moulding people's
behavior. Almost all entrepreneurship scholars that have incorporated the TPB into their
research establish the foundation that starting and growing a business are planned behaviours
(Kolvereid and Isaksen 2006; Krueger and Reilly 2000; Krueger et al. 2000).
Krueger et al. (2000) state that much of human behavior is planned, and it is difficult to envision
starting a business where a startup is launched simply as a conditioned response to a demand”.
Entrepreneurship is an intentional process in which individuals cognitively plan to carry out
the behaviours of opportunity recognition, venture creation, and venture development.
According to TPB, intention to start an entrepreneurial venture depends on personal desirability
of entrepreneurship (personal attitude), the social acceptability of entrepreneurship to a
normative reference group (subjective norms) and the perceived feasibility and control of
actually becoming an entrepreneur (perceived behavioural control) (Ajzen, 1991).
The Entrepreneurial Event model (TEE) (Shapero & Sokol, 1982) suggests that starting a new
business hinges on two crucial components: the individual's entrepreneurial intentions
(credibility), and the occurrence of a significant event like influence of partner, mentor,
investor, or idols. These events necessitate certain degree of feasibility (financial support,
mentor, partner, and family) desirability (culture, family, mentor, and peers) and readiness to
act on the business opportunity. Thus, innovative behavior is as a fundamental pillar for
startups, deeply ingrained in the entrepreneurial ethos (Lee, 2019). Schumpeter (1934)
expressed similar opinion with the ground-breaking contributions for understanding the
transformative power of innovation through the lens of creative destruction, a process integral
to fostering economic advancement. From the literature review, it is observed that to explore
innovative and entrepreneurial endeavours, two major aspects need to be explored are;
Entrepreneurship Mindset among Saudi citizens, and how unexpected events and
Technological Advancements are driving them towards entrepreneurship.
2.2.1 Entrepreneurial mindset
The entrepreneurial mindset, influenced by the Theory of Planned Behavior (TPB) and the
Entrepreneurial Event Model (EEM), reflects individuals' attitudes and traits regarding
entrepreneurship. Entrepreneurial mindset is defined as the ability for critical and creative
thinking (Handayati et al., 2020) and it is a key element in triggering new venture creation and
involves various decision-making processes within entrepreneurial ecosystems (Ogunsade et
al., 2020). It includes motives, skills, and thought processes contributing to entrepreneurial
success (Wesarat et al., 2022). Creativity is considered an important component of many
entrepreneurial ventures (Davis et al., 2016). This encompasses characteristics such as risk-
taking propensity, creativity, initiative, and resilience (Jiatong et all., 2021). Within TPB,
positive attitudes and perceived control over entrepreneurial actions, shape intentions towards
entrepreneurship. Meanwhile, EEM highlights how an entrepreneurial mindset predisposes
individuals to recognize and respond to opportunities within the ecosystem triggered by events.
2.2.2 Unexpected events and technological breakthrough:
The Entrepreneurial Event Model (EEM), reltes the individuals' attitudes and traits regarding
entrepreneurship when faced with some unexpected events. The unexpected events refer to
unforeseen external factors which disrupt the entrepreneurial activities or make drastic changes
to individuals or general public life (Drucker, 1985, & Gries and Naurde, 2021). These events
may include economic downturns, regulatory changes, or shifts in market demand. These
events test the resilience of the individuals, and ecosystem as a whole. Within the TPB,
unexpected events force individuals to reassess their attitudes and perceptions and search for
entrepreneurial scope, and feasibility. Schumpeter and Drucker (1985) places significant
emphasis that newer generation technologies replace the existing or older generation
technologies, driving technological innovation to foster economic growth and development.
Technological advancement and breakthroughs, as aligned with TPB and EEM, reflect
Schumpeter's notion of "Technological entrepreneurship," where entrepreneurs leverage new
technologies to create innovative products or services to replace older technologies.
Schumpeter argued that technological progress disrupts existing industries, creates new
markets, and drives economic transformation.

2.3 Ease of Business

This Institutional Theory (proponent: North, 1990 ) (Yang and Morgan, 2011) relates how
different institutions, formal and informal, regulatory and cultural norms, influence startup
behavior. This theory highlights that firms operate within specific social and institutional
circumstances which shapes their strategies and governance practices. These factors can be
collectively termed as “Ease of business”. The ease of doing business and perceptions of
government support gets reflected in the performance of businesses, which in turn influences
entrepreneurship. This involves evaluating the satisfaction with ease of business operations,
government startup policies, and regulatory frameworks. The presence of venture capital,
skilled labour force, research institutions, and professional services infrastructure all contribute
to the positive environment that fosters innovation and entrepreneurship (Bahrami and
Evans,1995). It is particularly relevant in emerging markets, where institutional shifts are
significant. The social, political and economic systems which can influence organizational
behavior and drive change could be Government Policies, the Access to Funds and Good
Infrastructure.
2.3.1 Government policies
The businesses and investments are greatly influenced by government policies. A supportive
policy, foster an atmosphere that is favourable to the establishment, expansion and prosperity
of startups. These policies can be funding programmes, investment incentives, reduced
regulations, and tax breaks. Initiatives to lower bureaucratic barriers can expedite procedures
and promote efficiency, while open and predictable regulatory frameworks give businesses the
security and trust they need to prosper.
2.3.2 Access to funds and good infrastructure
Access to funds is vital for startups to start, expand, and scale up the venture. Bootstrapping is
the most basic form of fund available to the founders, which allows founders to use personal
savings or revenue to retain control and demonstrate viability. Friends, family, and
acquaintances can provide initial support, leveraging personal relationships and shared belief
in the venture. Presence of angel investors, mentorship, crowdfunding platforms enable
startups to validate ideas and start the business. Government grants, along with corporate
partnerships, prove very helpful for the startups to get funds for operations, often at reduced
rate of interest or no interest. By strategically leveraging these resources, startups propel their
growth and success. World class educational and research institutes play a vital role in the
development of entrepreneurial aspiration in students. These institutions function as cradle of
innovation, information generation, and talent cultivation. They are hub of knowledge transfer,
giving entrepreneurs access to best practices, cutting-edge research, and new technology.
This comprehensive literature review sets the stage for an in-depth analysis of the
entrepreneurial landscape in Saudi Arabia, framed within the context of Vision 2030. At the
heart of this exploration is the entrepreneurial ecosystem, a dynamic and interconnected
network comprising entrepreneurs, investors, policymakers, educational institutions, and
support organizations. The proposed study delve into the unique challenges and opportunities
faced by startups in the Kingdom, offering strategic insights to foster a robust innovation and
entrepreneurship ecosystem. Through a multidimensional exploration that encompasses
education, digital transformation, sustainability, and collaboration, the study aspires to
contribute to the blueprint of entrepreneurial ecosystems, guiding Saudi Arabia towards
becoming a global beacon of innovation and entrepreneurship.
Understanding the link between economic development and innovation within Saudi Arabia
could be helpful in unleashing its full potential and achieving new growth heights.
2.4 Saudi Arabia: an ecosystem of innovation and entrepreneurship
Saudi Arabia, guided by its Vision 2030, is poised to embark on a transformative journey
toward becoming a global beacon of innovation and entrepreneurship. Through strategic
initiatives, educational reforms, technological integration, and collaborative partnerships, the
Kingdom will carve out a path to sustainable economic growth, fostering a culture of creativity
and innovation for generations to come. In the heart of the burgeoning entrepreneurial
landscape of emerging markets, Saudi Arabia stands as a testament to the dynamic innovation
unfolding within nascent economies. This investigation explores the stories of trailblazing
firms that personify creativity, tenacity, and revolutionary power. Saudi Arabian businesses are
among the most inspiring instances of this, revolutionizing industries and advancing the
development of the international entrepreneurial community. Young population and expanding
economy: Saudi Arabia is home to a sizable, tech-savvy youth population that is ready to adopt
new businesses and technology (Sandeep, 2023) as well as a rapidly expanding economy.
Strong entrepreneurial heritage and a large number of prosperous family companies and
business owners in Saudi Arabia foster an entrepreneurial culture (Sandeep, 2023).
Kingdom of Saudi Arabia is transforming its economy with ventures into new sectors and
investments in technology, and renewable energy-driven future. The path to transformation
have been well planned and clearly laid out in “Vision-2030”. Some of the successful Saudi
Arabian startups are Unifonic (2006), Unifonic (2006), Red Sea Farms (2018), Nana (2016),
Dawul (2020), and Almatar (2019).
A study to map the Entrepreneurship Ecosystem of Saudi Arabia was conducted by Rahatullah
Khan (2013) then he developed the framework in 2016. In the study done by Rahatullah Khan
(2016), he mentioned that the Saudi Arabian government and the private sector have
collaboratively initiated various measures to address the national priority of youth employment,
economic activity, and private wealth creation. There is a potential for further development at
strategic, institutional, and enterprise levels. Implementing planned interventions is crucial for
fostering entrepreneurship growth, with anticipated positive effects on policy institution. Thus,
there is a need of state of art framework for the future planning. There is also for an exvaluation
of efficiency, and effectiveness of various policies the government of KSA has initiated to
encourage startups.
3. Research Gaps
In the landscape of entrepreneurial ecosystems, startups and innovations are dynamic in nature,
which is shaped by availability of resources, obstacles, and stakeholders. With a focus on Saudi
Arabia, an emerging market with a host of startups, an extensive literature review is conducted
to understand the nuances of promoting innovation through startups. From the literature review,
it is observed that knowledge gaps exist in the intricacies of these ecosystems, making it
challenging to develop effective strategies for encouraging innovation and lasting
entrepreneurship. The identified research gaps are as follows:
1. There is an absence of a comprehensive and systematic framework that addresses the
multifaceted dimensions of entrepreneurial ecosystems in Saudi Arabia.
2. For the growth of any financial ecosystem, it must possess people with entrepreneurial
traits. Limited insights exist into the entrepreneurial skills of the general population of
Saudi Arabia, particularly in terms of innovation, risk-taking, and proactiveness.
Gaining insight into the mindset of people may help in understanding their
entrepreneurial capabilities.
3. The Kingdom of Saudi Arabia is undergoing significant policy transformations. The
influence and effectiveness these policies are in fostering innovation through startups
should be studied.
4. The Kingdom of Saudi Arabia boasts some world-class institutions. A study on the
influence of educational and research organizations in the Saudi Arabian ecosystem
may help understand their effect on startup incubation, networking, knowledge sharing,
etc.
5. From literature reviews, it is evident that access to resources plays a crucial role in the
success of startups. A study on resource access may help understand the role of new
investment initiatives of the Saudi Arabian government in promoting entrepreneurship.
4. Research Aim and Questions:
This research aims to address the identified gaps in the literature by developing a theoretical
framework that explores the intricacies of entrepreneurial ecosystems in emerging markets. By
exploring how startup intention, entrepreneurship and innovative behaviour, along with ease
of business interact, the study aims to provide useful insights for policymakers, organizations,
and entrepreneurs, helping to improve entrepreneurial ecosystems. The objectives/research
questions of the study are;
1. What are the distinctive traits and challenges faced by startups in emerging markets,
and how do these factors influence their innovative behavior?
2. What strategic interventions and support mechanisms can be devised to empower
startups in emerging markets, fostering a conducive environment for sustainable
innovation and entrepreneurial success?

5. Theoretical Framework
This study is supported by a theoretical framework that aligns with established theories to
improve its analytical basis. The relevant theories are; Entrepreneurial Event Model (Shapero
& Sokol, 1982), the Theory of Planned Behavior (Ajzen, 1991), and Institutional Theory (Yang
and Morgan, 2011). These theories highlight how innovation and entrepreneurship as well as
ease of doing business have a significant impact on the growth of the entrepreneurial
ecosystem. The variables and the related hypothesis are described in the following paragraphs.
With growth of the startup taken as dependent variable, the theoretical framework of the study
is shown in the Figure 1.
 Fig. 1: Theoretical Framework
The views on the link between the independent variables (Innovation & entrepreneurship, and
Ease of business) and the success of startups may be influenced by the moderator variables like
Gender, Age, Designation, and Education. While the individual characteristics like gender, age,
and designation may influence the behavioural pattern. The ease of business in a country may
have significant overall influence on the ecosystem. The nation with positive government
policies, greater access to capital, infrastructure like presence of world class
research/educational institutions, and business possibilities, all of which could have a
favourable effect on the link between innovations and startup activities. On the other hand, a
lack of these resources and market limits, may make it harder converting startup activities into
profitable ventures. As the success of startup activities may have direct contribution into the
economic growth of a country; growth of startup is taken as dependent variable. The dependent
variable (growth of startup) shows the influence of by independent variables (Innovation &
entrepreneurship, and Ease of business) on individuals towards entrepreneurship.

6. Methodology
A qualitative empirical research has been conducted to explore the Saudi Arabian
entrepreneurial ecosystem. This study targeted a diverse range of participants across various
roles within the Saudi Arabian entrepreneurial ecosystem, including entrepreneurs, investors,
policymakers, and support organizations. The researchers employed a stratified random
sampling technique, categorizing participants based on their roles, experience levels, and
gender. Individuals with different capacities (including entrepreneurs, investors, policymakers,
and support organizations) within a startup ecosystem are approach and interviewed (for 30-60
minutes each) within the entrepreneurial ecosystem in emerging markets like Saudi Arabia.
The findings of the study are described in the following paragraphs.

7.Data Analysis, Results, And Discussion

A qualitative empirical research has been conducted to explore the Saudi Arabian
entrepreneurial ecosystem. This study targeted a diverse range of participants across various
roles within the Saudi Arabian entrepreneurial ecosystem, including entrepreneurs, investors,
policymakers, and support organizations. The researchers employed a stratified random
sampling technique, categorizing participants based on their roles, experience levels, and
gender. Individuals with different capacities (including entrepreneurs, investors, policymakers,
and support organizations) within a startup ecosystem are approach and interviewed (for 30-60
minutes each) within the entrepreneurial ecosystem in emerging markets like Saudi Arabia.
The findings of the study are described in the following paragraphs.

Part of findings……...
8. Conclusions
The governments may take initiatives to promote knowledge exchange, strengthen research
institutions, establish networks of support for entrepreneurs, ease the fund access, and organise
startup promotional events………………..
……………….

References/Bibliography
o Ade Freeman, Marvin Taylor-Dormond, September 2013, World Bank Group Support
For Innovation And Entrepreneurship An Independent Evaluation, Ieg World Bank.
o Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior and Human
Decision Processes, 50(2), 179–211. doi:10.1016/0749-5978(91)90020-T.
o Luigi, B. F. Schiantarelli, and A. Sembeneli, Banks and innovation: micro-econometric
evidence on Italian firms. Journal of Financial Economics, 90, 197-217, 2008.
o Bahrami, H., & Evans, S. (1995). Flexible re-cycling and high-technology
entrepreneurship. California Management Review, 37(3), 62–89.
https://doi.org/10.1016/j.jbusres.2018.01.032
o Bajpai, P., (2026), The Top Emerging Markets in the World, June 26, 2023.
https://www.nasdaq.com/articles/the-top-emerging-markets-in-the-world
o Bakici, T., Almirall, E., & Wareham, J. 2013. The Role of Public Open Innovation
Intermediaries in Local Government and the Public Sector. Technology Analysis &
Strategic Management, 25(3): 311–327.
https://doi.org/10.1080/09537325.2013.764983
o Booher, D. E., & Innes, J. E. 2002. Network Power in Collaborative Planning. Journal
of Planning Education and Research, 21(3): 221–236.
https://doi.org/10.1177/0739456X0202100301
o Claudel, M. 2018, From Organizations to Organizational Fields: The Evolution of
Civic Innovation Ecosystems, Technology Innovation Management Review, Volume
8, Issue 6, Pp. 34-47.
o Cohen, B., Almirall, E., & Chesbrough, H. 2016. The City as a Lab. California
Management Review, 59(1): 5–13. https://doi.org/10.1177/0008125616683951
o Cooke, P. 2016. The Virtues of Variety in Regional Innovation Systems and
Entrepreneurial Ecosystems. Journal of Open Innovation: Technology, Market, and
Complexity, 2(1): 13. https://doi.org/10.1186/s40852-016-0036-x
o Desouza, K. C., & Bhagwatwar, A. 2012. Citizen Apps to Solve Complex Urban
Problems. Journal of Urban Technology, 19(3): 107–136.
https://doi.org/10.1080/10630732.2012.673056
o Drucker, Peter F. Innovative and Entrepreneurship, Practice and Principles. Harper &
Row, Publishers, Inc. 1985.
o February 25, 2020 Building early stage funds in emerging markets and developing
countries insights and learnings from the market place, World Bank Group.
o Gascó, M. 2016. Living Labs: Implementing Open Innovation in the Public Sector.
Government Information Quarterly, 34(1): 90–98.
https://doi.org/10.1016/j.giq.2016.09.003
o Gerometta, J., Häussermann, H., & Longo, G. 2005. Social Innovation and Civil
Society in Urban Governance: Strategies for an Inclusive City. Urban Studies, 42(11):
2007–2021. https://doi.org/10.1080/00420980500279851

• H. Tang, Q. Yao, F. Boadu, and Y. Xie, Distributed innovation, digital entrepreneurial

opportunity, IT-enabled capabilities, and enterprises’ digital innovation performance: a
moderated mediating model. Eur. J. Innovation Manag., 26 (4), 1106–1128, 2023.

o Holland JH. 1995. Hidden Order: How Adaptation Builds Complexity. New York:
Helix Books (Addison Wesley)

• J. Cao, S. H. Law, A. R. B. A. Samad, W. N. B. Mohamad, J. Wang and X. Yang, Effect

of financial development and technological innovation on green growth—analysis
based on spatial Durbin model. Journal of Cleaner Production, 365, 1-15, 2022.

o Kontokosta, C. E. 2016. The Quantified Community and Neighborhood Labs: A

Framework for Computational Urban Planning and Civic Technology Innovation.
SSRN Electronic Journal, 23(4): 67–84. https://doi.org/10.2139/ssrn.2659896
o Lee, J., Kim, D. and Sung, S. (2019), The Effect of Entrepreneurship on Startup Open
Innovation: Innovative Behavior of University Students, J. Open Innov. Technol. Mark.
Complex. 2019, 5, 103; doi:10.3390/joitmc5040103
o Leminen, S., Westerlund, M., & Nyström, A.-G. 2012. Living Labs as Open-innovation
Networks. Technology Innovation Management Review, 2(9): 6–11.
https://timreview.ca/article/602

• M. A. Baloch, I. Ozturk., F. V. Bekun, and D. Khan, Mode ling the dynamic linkage
between financial development, energy innovation, and environmental quality: does
globalization matter? Bus. Strat. Environ., 30 (1) 176–184, 2021.

o Omar Idrissi Amraoui. Morocco - MIDDLE EAST AND NORTH AFRICA- P150928-
Financing Innovative Startups and Small and Medium Enterprises Project -
Procurement Plan (English). Washington, D.C. : World Bank Group.
http://documents.worldbank.org/curated/en/099520001112333282/P15092800b35190
b50b7040af8bbe425f73
o Peter W. Roberts, Genevieve Edens, Abigayle Davidson, Edward Thomas,
Accelerating Startups In Emerging: Insights From 43 Programs, May 2017, Deloitte.
o Richard Cantillon, 1755, Essay on the Nature of Commerce, SCI LIBRARY.
https://cooperative-individualism.org/cantillon-richard_essay-on-the-nature-of-
commerce-1755.pdf
o Ritala, P. and Gustafsson, R. (2018), Q&A. Innovation and Entrepreneurial Ecosystem
Research: Where Are We Now and How Do We Move Forward?, Technology
Innovation Management Review, Volume 8, Issue 7.
o Sandeep Ganediwalla, 2023, KSA: Mecca of Tech Unicorns, September 2023, Redseer
Analysis, Desk Research, Redseer Strategy Consultants.
o Schaffers, H., & Turkama, P. 2012. Living Labs for Cross-Border Systemic Innovation.
Technology Innovation Management Review, 2(9): 25–30.
https://timreview.ca/article/605
o Schumacher, J., & Feurstein, K. 2007. Living Labs – The User as Co- Creator. In
Proceedings of the 13th International Conference on Concurrent Enterprising (ICE),
Sophia Antipolis, France.
o Shapero, A., & Sokol, L. (1982). Some social dimensions of entrepreneurship in C. Kent,
D. Sexton and K. Vesper (eds) The encyclopaedia of entrepreneurship Englewood
Cliffs.
o Shin, Y., & Shin, D. 2016. Modelling Community Resources and Communications
Mapping for Strategic Inter-Organizational Problem Solving and Civic Engagement.
 Journal of Urban Technology, 23(4): 47–66.
https://doi.org/10.1080/10630732.2016.1175826
o Snow, C. C., Håkonsson, D. D., & Obel, B. 2016. A Smart City Is a Collaborative
Community: Lessons from Smart Aarhus. California Management Review, 59(1): 92–
108. https://doi.org/10.1177/0008125616683954
o Voss, G., & Carolan, N. 2012. User-Led Design in the Urban / Domestic Environment.
Journal of Urban Technology, 19(2): 69–87.
https://doi.org/10.1080/10630732.2012.698067
o Wareham, J., & Almirall, E. 2011. Living Labs: Arbiters of Mid- and Ground-Level
Innovation. Technology Analysis & Strategic Management, 23(1): 87–102.
https://doi.org/10.1080/09537325.2011.537110
o West, M. A., & Farr, J. L. (Eds.). (1990). Innovation and creativity at work:
Psychological and organizational strategies. John Wiley & Sons.
o Y. Liu, D. Ji, L. Zhang, J. An, W. Sun, Rural financial development impacts on
agricultural technology innovation: evidence from China. Int. J. Environ. Res. Publ.
Health, 18 (3), 1-17, 2021.
o Yang, H. Morgan, S. L., 2011, Business strategy and corporate governance: theoretical
and empirical perspectives, Business Strategy and Corporate Governance in the
Chinese Consumer Electronics Sector, Chandok Publishing, Pages 23-46.
https://doi.org/10.1016/B978-1-84334-656-2.50002-8
o Ziv Baida, Global Startup Ecosystem Index 2023, Startup Blink
o Fuerlinger, G., Fandl, U., & Funke, T. (2015). The role of the state in the entrepreneurship
ecosystem: insights from Germany. Triple Helix, 2(1), 1-
26. https://doi.org/10.1186/s40604-014-0015-9
o Noelia, F.-L., & Rosalia, D.-C. (2020). A dynamic analysis of the role of entrepreneurial
ecosystems in reducing innovation obstacles for startups. Journal of Business Venturing
Insights, 14, e00192. doi:10.1016/j.jbvi.2020.e00192
o Singh, V. K. 2020. Policy and Regulatory Changes for a Successful Startup Revolution:
Experiences from the Startup Action Plan in India. ADBI Working Paper 1146. Tokyo:
Asian Development Bank Institute. Available:
https://www.adb.org/publications/policy-regulatory-changes-successful-startup-
revolution-india
o Wisuttisak, P. 2020. Comparative Study on Regulatory and Policy Frameworks for
Promotion of Startups and SMEs in Japan, the Republic of Korea, Malaysia, and
 Thailand. ADBI Working Paper 1206. Tokyo: Asian Development Bank Institute.
Available: https://www.adb.org/publications/comparative-study-regulatory-policy-
framework promotion-startups-smes
o Yoshino, N., and Taghizadeh-Hesary, F. (2015). Analysis of Credit Ratings for Small
and Medium-Sized Enterprises: Evidence from Asia. Asian Development Review,
32(2), 18–37. doi:10.1162/ADEV_a_00050.
o Larkin, M., Derek O., 2018, Collaboration between start-ups and corporates a practical
guide for mutual understanding, World Economic Forum, REF 170118 - case 00038358
o Drucker, Peter F. Innovative and Entrepreneurship, Practice and Principles. Harper &
Row, Publishers, Inc. 1985.
o Jiatong W, Murad M, Bajun F, Tufail MS, Mirza F and Rafiq M (2021) Impact of
Entrepreneurial Education, Mindset, and Creativity on Entrepreneurial Intention:
Mediating Role of Entrepreneurial Self-Efficacy. Front. Psychol. 12:724440. doi:
10.3389/fpsyg.2021.724440
o Gries, T., Naudé, W. (2021). Extreme Events, Entrepreneurial Start-Ups, and
Innovation: Theoretical Conjectures. EconDisCliCha 5, 329–353
https://doi.org/10.1007/s41885-021-00089-0
o Sandeep Ganediwalla, 2023, KSA: Mecca of Tech Unicorns, (2023), Redseer Analysis,
Desk Research, Redseer Strategy Consultants.
o Richard Cantillon, (1755), Essay on the Nature of Commerce, SCI library.
https://cooperative-individualism.org/cantillon-richard_essay-on-the-nature-of-
commerce-1755.pdf
o Abboud, J. (2024), KSA – The Premier Hub for Startups in MENA by 2030, BSA
Middle East Law Firm. https://bsabh.com/knowledge-hub/news/ksa-the-premier-hub-
for-startups-in-mena-by-2030)
o Sarasvathy, Saras D. (2001), Causation and effectuation: toward a theoretical shift from
economic inevitability to entrepreneurial contingency, Academy of Management
Review, Vol. 26, No. 2, 243-263.
o Drucker, P. F. (1985), Innovation and Entrepreneurship, by New York: Harper & Row,
277 pp.
o Moore, J.F. (1993). Predators and prey: A new ecology of competition. Harv. Bus. Rev.,
71, 75–86.
o Silveyra, G., Rodríguez-Aceves, L., Charles-Leija, H., Saiz-Álvarez, J.M. (2021),
Human flourishing: An enabler of entrepreneurial intention in Latin American students.
Eur. Bus. Rev., 33, 999–1018.
o AlAstal, A.Y. (2023), Emerging technological innovation in Gaza Strip municipalities:
An entrepreneurial approach. Journal of Innov. Entrep. 12, 27.
o Ajzen, I. (1991), The theory of planned behavior. Organizational Behavior and Human
Decision Processes, 50(2), 179.
o Kolvereid, L., and Isaksen, E. (2006), New business start-up and subsequent entry into
self-employment. Journal of Business Venturing, 21(6), 866–885.
o Krueger, N. F., Reilly, M. D., and Carsrud, A. L. (2000). Competing models of
entrepreneurial intentions. Journal of Business Venturing, 15(5–6), 411–432.