When I see a business I like to analyze it in two ways, one is the beneficial effects on the Kuwaiti Economy and the other is the business itself, meaning success and what have you.

I’ll explain both and for you so you can see why I perceive business from such a perspective. The second which is the business from a success factor is what I majored in (entrepreneurship) and based on its success the first factor becomes important.

Let me put the idea into perspective, if you own logo design company and started out with yourself as the sole employee and then started to make more money and required more employees you start to employ expatiates, why because their salaries are much cheaper then Kuwaitis, off course you have to include the knowledge and expertise factor in the picture because some Kuwaitis do not have that knowledge at the first place. But again let’s see the flow of money from the logo design company; you start getting more orders from Kuwaiti companies, your wealth increases due to transaction increase, you staff expats, so you created jobs. These jobs by themselves create extra wealth for the Kuwait economy. You see economies run by having money spent in them, which increases the KD value because there is more KD dinar moving around the economy or in economics terms, multiplying. Now multiply this logo company by Kuwait and see how many people are opening business and creating jobs, and these jobs create more jobs because they create demand for more supplies, like food, banking, insurance and rent. But the major flaw in this cycle is that the KD is being transferred outside Kuwait and going into a different market, hence the expat sending money abroad, hence banking, insurance and real estate outside Kuwait. Thus your KD dinar cycle gets reduced and losses value. So as much as we try to create a better economy or a work force we end up draining the cash in the system.

Don’t get me wrong, even for a company that I will be starting closely, I will be staffing expats. I point out this because when discussion occur in a  Diwaniya and the subject is that small Kuwaiti business are creating a better economy it’s not true, surely it is creating wealth to the Kuwaiti owner but not the economy itself.

This entry was posted on Monday, August 2nd, 2010 at 11:13 am and is filed under E-commerce & Internet. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.