2020 Entrepreneurial Activity Review

Oman’s measures of entrepreneurial activity in 2020 reflect an economy clearly impacted by the COVID-19 pandemic; however, simultaneously, the pandemic appears to be driving less of that activity than might be expected. In 2020, 48% of adults (18–64) in Oman reported that their household suffered an overall loss of income because of the pandemic. This was about the average rate for all GEM economies, although it was a little lower than for peer economies Qatar (51%) and Kuwait (54%). Yet, despite these income losses, the Omani population, while still highly ambitious, seemed slightly less inclined to pursue entrepreneurship: the rate of adults intending to start a business within the next three years fell from 63% to 57%, just behind Kuwait (58%). Yet, unlike some of its GEM peers in the Middle East, only 51% of those prospective entrepreneurs reported that the pandemic had influenced their intentions, lowest among its peer economies. This suggests there could be many Omanis pursuing entrepreneurship for factors unrelated to the pandemic, even if it did impact their income. 
Omani’s Total early-stage Entrepreneurial Activity (TEA) rate more than doubled between 2019 and 2020, going from 6.7% to 16%, the largest ratio of increase for all GEM economies. There could be many explanations for this, including that a significant portion of Omanis who intended to start a business in previous years (in 2019 it was 63%) ended up doing so in 2020. Additionally, Oman has one of the higher rates of adults intending to hire no additional employees (10.8%) for their business within the next five years, compared to just 1.5% expecting to hire six or more. These figures suggest that, for a strong and balanced recovery from the pandemic, Omanis require targeted policies providing incentives to hire and grow new businesses, rather than starting solo ventures. 

2020 Framework Conditions Review 

All of Oman’s Framework Condition scores increased in 2020 compared to 2019, with one exception. This is remarkable considering the tremendous social and economic difficulties caused by the pandemic. For the condition “Access to entrepreneurial finance” Oman received a 4.9 score (17th among GEM participating economies) from its experts, just below peer economy Qatar, which scored 5.1, and an improvement from its 4.3 score in 2019. This is a welcome sign, given the high entrepreneurial intentions rate in the Adult Population Survey (APS), which found that 57% of adults in Oman expected to start a business within the next three years — which will create a strong demand for finance. Oman also improved significantly in its governance conditions, particularly “Government policy: support and relevance”, for which its 5.2 score, increasing from 4.5 in 2019, placed it 10th among GEM economies. 
These improving conditions led to a relatively strong assessment of the government’s response to the pandemic, which received a 5.8 score, 17th overall, and third among GEM Middle East peer economies, behind Qatar (6.4) and Saudi Arabia (8.4). Oman’s most dramatic improvements came in the education-related conditions. For “Entrepreneurial education at school” Oman’s score increased from 3.5 in 2019 to 4.4 in 2020: ninth among GEM economies and its highest ranking for any condition. In “Entrepreneurial education post-school” Oman made another strong leap, from 4.4 in 2019 to 5.3 in 2020, 13th among all GEM economies. It is telling that Oman’s strongest score improvements came in its government and educational conditions, with experts ranking Oman 17th among all GEM economies for the governmental response to the pandemic. However, their evaluation of the entrepreneurial response to pandemic placed it only 30th among GEM economies. This reflects a higher level of confidence in the government, rather than entrepreneurs, to assist Omanis during this time.