Culture and Entrepreneurship in the United Arab Emirates
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Culture and Entrepreneurship in the United Arab Emirates François Facchini 1
& Louis
Jaeck 2 & Chafik Bouhaddioui 2
Received: 9 October 2019 / Accepted: 27 April 2020/ # Springer Science+Business Media, LLC, part of Springer Nature 2020
Abstract It is well known that entrepreneurship plays a key role in economic development; however, its cultural underpinnings remain a marginal field of study. This paper is an attempt to fill this gap. The development trend of the oil-rich United Arab Emirates (“UAE”) is at the heart of debates surrounding the effects of culture on economic choices and outcomes. In order to move away from an oil-based economy and provide private sector jobs for its growing number of nationals, the UAE has promoted and implemented diversification strategies over the last 20 years. Yet, less than 2% of the private sector workforce is composed of UAE nationals. The latter prefer working in the public sector because of better salary and working conditions. This paper seeks to explain the cultural foundations of the lack of entrepreneurship among UAE nationals. It conducts a survey among students from United Arab Emirates University and tests the determinants of their entrepreneurial intentions. It shows that the students’ culture is holistic and rather hostile to entrepreneurship. Such disinterest is stronger because of fear of stigmatization associated with business failure and because of social prestige associated with public sector jobs. Our results not only confirm the cultural specificity of Rentier States but also invite the launching of educational programs aimed at modifying students’ beliefs over entrepreneurship. Such cultural change seems inevitable in the context of a transition from an oil-based to a knowledge-based economy. Keywords Culture . Entrepreneurship . Middle East and Rentier State
* François Facchini francois.facchini@univ–paris1.fr Louis Jaeck [email protected] Chafik Bouhaddioui [email protected] Extended author information available on the last page of the article
Journal of the Knowledge Economy
Introduction This article addresses the lack of entrepreneurship in the United Arab Emirates (UAE) and highlights that the main driver is the existence of a culture which is not supportive of entrepreneurship. The absence of an “Entrepreneur Class” is not only characteristic of the UAE, but it is also prominent in every Rentier State. The first use of the term “Rentier State” is found in Mahdavy (1970, p. 429) who simply defined it as applying to “those countries that receive on a regular basis substantial amounts of external rent”. Originally, the concept of Rentier State has emerged to explain how problems in public finances affect political changes. In its famous contribution on the origin of tax systems, Ardant (1972) explains how taxpayers have contributed to build democracies by defending their natural rights. The underlying general principle is no taxation without political representation (Anderson 1987, pp. 9–10). The State becomes a rentier if it does not need
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