BUSN4100 Business Research Methods : Tourism and Hospitality

Research Title: The relationship between entrepreneurship and economic development An evaluative study of SMEs in Abu Dhabi

Literature and Introduction must cover theories for all variables in the title Entrepreneurship, Economic Development and SMEs

Must be applied to: Entrepreneurship, Abu Dhabi Economic Development, SMEs in Abu Dhabi

Must include facts and figures from Entrepreneurship, Abu Dhabi Economic Development, SMEs in Abu Dhabi

Research methodology must have basic elements like research philosophy, design, research type, approach, data collection method.

Introduction

Plans in the Arabian Gulf economy are diverse and involve not only investing in oil and gas but also getting people to business activities. The United Arab Emirates non-oil sector include, construction, tourism and hospitality, according to Feuilherade, 10% of all future government tenders will be given to Small and Medium Enterprises. This will give a chance to all potential entrepreneurs to have access to  the lucrative public sector market. Moreover, entrepreneurs now have an option of turning to the KFED. The agency, which is separate from the government, offers a range of training and funding programs to Emirati entrepreneurs as well as small businesses. Meanwhile in Abu Dhabi, there is a Small and Medium Enterprises division in the department of economics development. The division contains a business incubation center for local entrepreneurs which allows them to develop their small businesses and projects. The high penetration of smartphones in the Middle East has made Abu Dhabi a hotbed of tech start-ups. This has attracted investors who are aiming to tap into the promising new business potential. 

1.1 Research hypotheses

H1 Entrepreneurship is the greatest contributor of the Abu Dhabi economy

H2 Oil and gas in Abu Dhabi are the once that have contributed to the economic growth

Ho Entrepreneurship has no contribution to Abu Dhabi’s economic growth

Ho Oil and gas have no significant contribution to Abu Dhabi’s economy

H3 entrepreneurship and SMEs have a negative contribution to the economy

1.2. Aims and objectives of the study

The study will be conducted with an aim of

justify;">(i) Understanding the role of entrepreneurship in Abu Dhabi economy

(ii) Examine the potentiality of entrepreneurship in Abu Dhabi

(iii) Determine the various ways in which the government is engaging to foster the entrepreneurial efforts.

2.0. Literature review

Despite the efforts of the study to understand entrepreneurship in Abu Dhabi, the data available on entrepreneurship is very limited moreover, there is no official definition of small and medium enterprises. However, data from non-governmental estimates show that entrepreneurship accounts for about 45% in Abu Dhabi SME population and it is one of the largest in the United Arabs Emirates. According to Global Entrepreneurship Monitor (GEM) 9% of Emiratis, consist of business owners, with 4% being foreign business owners. Consequently business ownership in Abu Dhabi could be slightly higher if were not for the regulations on foreigners (Anfara, 2016). In the United Arab Emirates, Abu Dhabi does very much better in terms of business establishment and entrepreneurship, compared to Dubai. The unique phenomenon in all the seven emirates is that part-time business owners who share the entrepreneurial activity with other activities run about 82% of the business establishments. In most cases, the entrepreneurs are in government or in state-owned enterprises.  The reason that most of these business owners are part-time owners is that most of them are risk aversive. For instance, there is a very strong stigma in the society regarding failure, which makes people to fear gambling with business ventures in Abu Dhabi. Moreover, government job are available in Abu Dhabi and well-paying making many of the Emiratis reluctant to forego such a source of income (Mohammed, 2014). Another factor that has contributed to the characteristic of part-time business ownership is the fact that banks in Abu Dhabi easily give loans to employed individuals moreover, the in cases where loan repayment fails it leads to imprisonment.  In total, all these factors hinder the growth of entrepreneurship as well as the SMEs in Abu Dhabi. However, the data provided by GEM partially can support the anecdotal evidence. The fear of venturing into entrepreneurship is assumed to be the major contributor to the low number of SMEs in the Emirate. Otherwise, about 40% of Emiratis perceive market opportunities in Abu Dhabi. This figure is also in line with other studies done on the Emirate previously.

2.1. A profile of an Emirati entrepreneur

The characteristics profiled on this section are those of an entrepreneur who in any of the seven Emirate. However since the emirates operate under the same policies, the characteristics can as well be used to understand the characteristics of an entrepreneur in Abu Dhabi. The Emirati entrepreneur has the following traits

• The entrepreneurs are mostly male aged between 24-35, with a post-secondary education and a monthly income of close to $ 5000. The entrepreneurs mostly seek advice mostly from family, friends and their networks, while advice from the professionals account for a very small percentage. Emirati entrepreneur seeks the advice from family mostly that is 76.7% and from friends that is 82.8% in the personal networks. On the other hand, professional advisory networks for example bankers that is 10% and the lawyers that is 10% are among the least consult. This can suggest that United Arab Emirates entrepreneurship involves small-scale activitiesprimarily (Huidobro et al., 2014).
• Emiratis show optimistic attitudes towards entrepreneurship, with nine in ten perceiving that there is sufficient media attention on the entrepreneurship, whereas four in five perceive entrepreneurship as a good career choice. However, only 1 out of every 20 is actively involved in the startup efforts. Therefore, there is a gap in between the way entrepreneurship, which is perceived in the society.
• Among various reasons, Emirati entrepreneurs has closed their business, financing, and non-profitability issues ranked on top that are 39.4 % and 19.5 % respectively. Interestingly, 51% women remarked as “personal reasons” in comparison to only 15 % men. On the other hand, only 24% female entrepreneurs has cited the non-profitability in comparison to 44 % men. The suggestion is that the profitability may not be the key driver of the female entrepreneurship in the United Arab Emirates and that women may face social barriers to set out the business activity than men as the key role they play in management of household(McLachlan, 2012).

Other contributors to the barriers hindering entrepreneurship in Abu-Dhabi include,

• Cultural Barriers:

The cultural belief that failure is bad in the society is among the main barriers that are hindering entrepreneurs from starting up businesses. This affects the high startup rate in the emirate. The number of entrepreneurs facing this obstacle is very a in that one in every three entrepreneurs are experiencing it.

• Educational Barriers:

It is estimated that 60 % of the entrepreneurship in Abu Dhabi are able to see entrepreneurial opportunities. However, only 50% of the entrepreneurs are confident that they have the required skills to take on the entrepreneurship since they have the required education to analyze the opportunities.

• Internationalization Barriers:

In the 14% of all SMEs in the United Arab Emirates only 4% of the enterprises owned by Emiratis, export 75% of their goods and services. This shows there is lack of networking in the small and medium sized entrepreneurships in the Arab Emirates. Emirati-owned small and medium sized entrepreneurship export 75% or more of their goods and services compared to 14% of all SMEs in the UAE (McLachlan, 2012).

3.0. Methodology

The main purpose of the proposed research is to investigate the relationship in between the role of small and medium enterprises in economic development in Abu Dhabi. In other words, the proposed research will aim to determine the meso-level, micro-level, and macro-level determinants of the entrepreneurship on small and medium sized entrepreneurship of Abu Dhabi Emirate, and how the entrepreneurship influences the development of the town economy. For meeting the intended goals of the research study, a 3-dimension evaluation on entrepreneurship and economic development will be identified, which is based on the past studies as well as the review on literature on entrepreneurship. The dimensions to be applied are Macro, Meso and Micro level determinants of entrepreneurship. These categories will be structured in such a way that it has a list of the independent variables, as studied to the multiple regressions. Every category can include the list of the independent variables that suited to the multiple regression. The research will pose the following questions which will be helpful in data collection (Mier, 1991).

• To what level do individual characteristics of entrepreneurs in Abu Dhabi, influence the SMEs? (Macro-level factors)
• What factors dictate the entrepreneurial, level at macro level, how have these factors of entrepreneurship influenced the economy of Abu Dhabi?
• Is the level of entrepreneurship in Abu Dhabi being affected by the characteristics of the Emirate in Abu Dhabi?  
• How are the characteristics of SMEs in Abu Dhabi Emirate contributing to the level of entrepreneurship?
• How do the same characteristics influence economic growth?
• How does factors such as social cultural values and norms influence entrepreneurship influence entrepreneurship in Abu Dhabi?  
• What factors are used as determinants at macro-level?
• How do these factors affect the economic development?

The above questions will be tackled based on their relevance to the research objective.

3.2. Characteristics of the Proposed Research

The proposed research will use a descriptive study to deliver the information. According to Kumar (2015), descriptive study is used to explain and give information on available concerning situation, community, group of people. In the same way, the proposed research will help to describe and give information on the determinants and the consequences of entrepreneurship in relation entrepreneurs in SMEs of Abu Dhabi.  The proposed study will rely on previously set up theories of the entrepreneurship as well as local economic growth, which will be considered as descriptive. The reason for using the descriptive research is due to the supportive theories use in the study (Hussey and Hussey, 2017). Correlation is other feature of the research. The different identified factors that can affect entrepreneurship and the impact on the regional economic performance will be analyzed. Accordingly, the findings will be decided on the basis of their strengths of the correlation in between the variables. In this regard, the study will be considered as the correlation type. In view of Bryman (2014) when the strength of arelationships in between the variables is discovered it can be considered as the correlation type of the research. The important thing is that the proposed research need to have the exploratory characteristics. The empirical researches are scant in Abu Dhabi in the proposed area. According to Kumar (2015), the given research may be of exploratory in nature when extensive knowledge of the particular problems under the examination that is not available before the starts. The research will employ both the qualitative as well as quantitative methodologies that imply the application of the mixed methods in this research study. This is essentially due to the various advantage of the approach. As mentioned by Creswell etal (2017), the usage of qualitative and quantitative approaches both in the combination mat provides the better understanding of the research problems

3.3. Population and Sample Size

The population of this study will be composed of the entrepreneurs in small and Medium Enterprises of Abu Dhabi. The researcher can accomplish the research work in this region on small and Medium Enterprises and how they can integrate to the economy via their economic and employment path. This is comparative advantage for the researcher truly in order to design the research methodologies in the advance. According to the context of the region, it gets ready for the available constrains in the study region. Database of Entrepreneur found in the Abu Dhabi nad will be used as the sampling frame. On this basis of the distinct criteria for example, balancing gender of the owner, business needs to be in the operation for at least 1 year. A business venture that exhibited the entrepreneurial features and firm size as well as the types of business activities, approximately 250 entrepreneurs, systematically can be selected. Accordingly, quantitative data can be collected from the sample enterprises. Regarding the qualitative data, 25 entrepreneurs out of 250 sampled entrepreneurs can be selected with determination that are assumed potentially resourceful entrepreneurs for problems under the investigation.

3.4. Instruments

The research can apply both the quantitative and qualitative instruments. Survey questionnaire can be used to enable the systematic collection of the quantitative data predominantly. This may be very useful to measure the variables and the level of the relationship with the entrepreneurship can be listed in conceptual framework of the study. Survey questionnaires will comprise both the closed ended and open-ended questions thqat is structured according to conceptual framework relating to the qualitative. The structured interview can be conducted with selected entrepreneurs purposefully, who are also involved for the survey questionnaire, as this could help for the descriptive data and for putting what the entrepreneurs could say as it is. In depth, interview will be carried out with concerned government offices for example, the Regional Office, Zonal small and medium entrepreneurship 9 Development Office, and with the Leaders of Business Associations found in town. The pilot study can be employed first for ensuring reliability and the appropriateness of study for example the research questions may operate well and also function of instruments may be appropriate. This may highly depend on the availability of the resources like time.

3.5. Analytical Methods

Data may be collected quantitatively, which will be analyzed by the use of the Statistical Package for Social Scientists (SPSS) software updated version. This system will help in performing the statistical tests for example analysis of variance, correlations, factor analysis, multiple regressions, and reliability. For making the analysis procedural, the questionnaires may be coded and entered to the SPSS for statistical analysis. The Multiple regressions can be key statistical technique to be used throughout the analysis. It helps to measure the relationship in between both the independent and dependent variables. This was outlined in the conceptual framework. In such case, the single dependent variable such as local economic growth and multiple variables such as listed in the conceptual framework will be analyzed by using the technique. With the help of the multiple regression analysis, the correlations will be produced that will capable in measuring the strength of association in between any of the two pairs of the variables. This m,ay help in identifing the main determinants of the entrepreneurship in this study region. Beta coefficients can be used for deriving the information about relative contribution of every independent variable

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