GEM POLICY ROADMAP

The Omani economy continues to expand. GDP growth in 2023 was expected to be 4%, while inflation was down below 2%. Growth in Oman has been led by the private sector, with non-public-sector employment rising.

The Sultanate has been investing in entrepreneurial readiness/skills development programs and in a
new incubator program for startups, including professional support. This builds confidence among the adult population, as do increasing numbers of government programs to promote the importance of entrepreneurship activities in Oman.

Further, a public investment plan, the “Oman Future Fund”, is allocating $5.2 billion to boost emerging businesses. Ministerial decisions in 2023 include new regulations for home businesses and an improved regulatory framework for small businesses and incubators.

2023 Framework Conditions Review1

After a two-year decline amid the COVID-19 pandemic, Oman’s entrepreneurial environment quality, measured by the National Entrepreneurial Context Index (NECI) score, is now sharply improving. During the pandemic, the score fell from 5.0 in 2020 to 4.1 in 2021, with little change in 2022 at 4.2. In 2023, this score bounced back strongly, rising to 5.4 and placing Oman 11th among 49 participating GEM economies. A year earlier, this rank was just 38th out of 50.

Each Entrepreneurial Framework Condition (EFC) score, as well as the overall average, typically changes very slowly. In 2022, just one of those conditions in Oman scored as sufficient: Social and Cultural Norms, with a score of 5.0. By 2023, all 13 conditions had increased their scores, with eight shifting from less than sufficient to more than sufficient. The biggest increases were for Physical Environment (up from 4.6 to 6.7), for Social and Cultural Norms (from 5.0 to 6.8) and for Government Policy: Support and Relevance, up from 4.3 to 5.9.

In 2023 national experts were also asked to assess the quality of social support for women entrepreneurs, as well as their access to resources compared to men.

For social support, Oman scored an impressive 5.5, placing it eighth of the 49 economies, but just 2.8 for their relative access to resources, placing it 49th.

2023 Entrepreneurial Activity Review

Despite the strongly growing Oman economy, just under one in five adults reported that their household income had fallen in 2023. This is well down from the two in five a year earlier.

Entrepreneurship has a high profile in Oman, with three out of five adults knowing someone who had recently started their own business, two out of three seeing good opportunities to start their own business (second highest in Level B), and seven out of 10 considering themselves to have the skills and experience to start their own business. Fear of failure is relatively low, with just two out of five who see good opportunities reporting that they would not start a business for fear it might fail. Many people are not deterred, with a massive two out of three of those adults expecting to start their own business within the next three years. This is the highest business intention rate in GEM 2023.

The proportion of adults who were already starting or running their own business in 2023 was just over one in 10. The level for men is much higher (13%) than for women (8.3%), implying three men start a new business for every two women doing the same. The level of Established Business Ownership is very modest, falling from an already low 4.1% in 2022 to just 3.2% in 2023. This implies Oman had more than three adults starting new businesses for every adult owning an established one, a ratio that has persisted over time and which may suggest new businesses face considerable obstacles in becoming established.

To build great wealth or very high income, or to earn a living because jobs are scarce, were the dominant motivations agreed by new entrepreneurs. Just two in 10 new entrepreneurs had customers beyond Oman. This was less than the previous year. Three out of five expected to use more digital technology in the next
six months, while just one in eight expected to employ at least six more people in the next five years. This is low, but not too surprising when two out of five of those starting new businesses in Oman in 2023 were solo entrepreneurs, with one owner and no current employees.

1 A brief description of the GEM approach is given in the footnote on p. 107.