Can GCC States Achieve Sustainable Economic Diversification and Development by Driving Entrepreneurship Efforts?

This study provides a comparative analysis of Gulf Cooperation Council (GCC) states that are limited by the finite supply of hydrocarbons but are working to find sustainable growth solutions by migrating to more vibrant entrepreneurship ecosystems. Gulf states expect that by promoting entrepreneurship and encouraging homegrown entrepreneurs, sustainable growth will have an ongoing positive impact on human development, prosperity, and development of the public and private sectors. Such growth will ensure that GCC economies can weather external and internal economic shocks. Nevertheless, there are limits and challenges when it comes to state-led, private-sector development. While GCC states have been engaging in diversification efforts, additional evidence suggests that their primary interest is regime security. By outlining the contemporary context for GCC states, this study argues that low oil prices, regional dependence on hydrocarbons, and trends in economic diversification signal GCC states' preference to bolster their rentier systems with additional state revenue streams. GCC states' expansion into new markets and sectors indicates a fresh search for alternative revenue streams and prestige, which in turn are used to bolster regime security. Such a trend sets trajectories and implications for the region that could lead to economic stagnation and the need for additional diversification strategies. This study fills an important gap in the literature by conducting a comprehensive and comparative analysis of state-led entrepreneurship efforts, diversification processes and limits, and challenges to state-led, private-sector development in the GCC.