There is no doubt that the culture that the current generation is embracing and will pass on to future generations is the culture of entrepreneurship and owning private projects so that they can manage them and make more money instead of working for other people. The Kingdom of Saudi Arabia was able to achieve the first ranks in the indicators of the Global Entrepreneurship Monitor Report 2019 2020, as it came in first place in the indicator “Knowing someone who started a new project”, which indicates the great competition and high positivity to enter the fields of entrepreneurship by young men and women, and this coincided with the emergence of many business accelerators that contribute to supporting modern establishments.
Through the following lines, we discuss the concept of business accelerators and what are the positive effects they have on the community economy:
What are business accelerators, and what is the history of their emergence?
A business accelerator is a concept that refers to a set of intensive programs offered by some economic entities that give developing companies access to mentorship, investors, and other forms of support that help them become stable and self-sufficient companies. The compensation that these entities receive is often a share or percentage of the project. Before business accelerators, business incubators began to appear in 1959, and their goal was to create an institutional environment that would help and enable startups and business ideas to grow. In 1999, business incubators flourished and many globally known names emerged at the time, such as “TechSpace” and “HotBank 100” and others, along with the development and proliferation of technology companies. The existing models worked to provide good office spaces for new companies in exchange for shares in the company. With the spread of the idea of incubators, these institutions provided spaces for a monthly fee. Then, in 2005, the American programmer “Paul Graham Y Combinator” and owner of the business accelerator “YC”, created some differences on the incubator programs, and thus was the launch of business accelerators. The difference between business accelerators and business incubators
Companies that resort to business accelerators are often startups that have passed the first or founding stages of the project, and are ready to grow and develop, but they need financial support and administrative guidance to gain greater strength, while less developed companies or those who are not ready to enter the second stage of the project, use business incubators instead, as they are designed to support creative ideas from the beginning, and develop them by providing support resources, in addition to the fact that business accelerators offer their programs for a short period of time and in an intensive manner, while business incubators keep projects with them for a period that may reach a year or more.
The impact of business accelerators on entrepreneurship
The presence of business accelerators has contributed to the development of many startups and prevented their bankruptcy or closure, as entrepreneurs often face many obstacles in the growth stage, which leads them to collapse. The “Angel List” platform, which is one of the platforms that helps companies obtain investments, indicated an increase in the number of business accelerators worldwide. The platform indicated that in 2005, there was only one American business accelerator, and today the United States of America contains only 578 business accelerators. There is no doubt that the urgent increase in this type of entity is due to the existence of a significant return and return on commercial activities. In this context, we mention in the following lines some of the advantages of business accelerators as follows:
Intensive development and a guide for investors
Business accelerators work to bring out the best in startups and investors alike, as they work to develop companies intensively and in a period that is often not long, and to carefully examine the participating companies, so investors do not need to waste a lot of time screening and evaluating Startups.
Edrak Marketing & Public Relations
An entrepreneur can rely on a business accelerator to be one of the advocates and promoters of his brand outside the organization, as the accelerator helps you develop your marketing strategy and determine the appropriate locations for your products or services, as well as determine the appropriate outlets that help the company launch towards leadership, so, if the business accelerator that adopts your project has a good commercial reputation, this will likely contribute to attracting many potential customers and investors to you easily.
A good sign to reach investors
Also, obtaining a degree from a reliable and highly rated university qualifies an individual to obtain a prestigious job, and using business accelerators has become a commercial and social verification for investors, that your startup has passed its most difficult stages and is capable of achieving more successes to come, which makes investors willing to put their capital in it safely.
Network of relationships and extensive knowledge
Joining a business accelerator program does not only mean that you will work alongside specialists and consultants, but you will be alongside many emerging companies, which helps you develop your business knowledge and avoid making the mistakes that others have made, and makes your vision clearer towards the goals and challenges that you will face in the next stages. Also, being with members of other companies helps you build a network of relationships, and sends you a feeling that you are not alone in facing the world – as many entrepreneurs feel at the beginning of their work – but rather gives you more motivation and high morale so that you can work harder.
The impact of business accelerators on the local economy
According to a report by the “MAGNiTT” platform, which specializes in data on the world of finance and business, issued in 2018, it indicated that Business accelerators account for 18% of startup funding sources in the Middle East, so there is no doubt that business accelerators contribute to the emergence of many leading companies that will in turn contribute to supporting the national economy. Not only that, but the abundance of business accelerators in the Gulf countries at the present time is in line with the restructuring of the Gulf economies amid the shift from total dependence on oil to supporting the private sector. There are many business accelerators in the Kingdom of Saudi Arabia, including the “InspireU” accelerator, the “TAQADAM” accelerator, and many others.
