{"id":26231,"date":"2026-04-11T06:22:05","date_gmt":"2026-04-11T03:22:05","guid":{"rendered":"https:\/\/arab-digital-economy.org\/?p=26231"},"modified":"2026-04-28T07:21:25","modified_gmt":"2026-04-28T04:21:25","slug":"developing-small-industries-in-arab-economies","status":"publish","type":"post","link":"https:\/\/arab-digital-economy.org\/?p=26231&lang=en","title":{"rendered":"Developing small industries in Arab economies"},"content":{"rendered":"
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Cairo<\/span><\/div>\n<\/div>\n<\/div>\n
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Source: Al-Wafd Newspaper<\/span><\/p>\n

Prof. Dr. Ali Mohammed Al-Khouri<\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

Developing small industries is a vital pathway to reshaping the structure of the Arab economy, transforming it from a rentier economy with limited production centers into one capable of competing within global value chains. The international landscape is witnessing an accelerating integration of precision and flexible industries into global economic networks, and the experiences of countries like South Korea and Vietnam have demonstrated that small and medium-sized enterprises (SMEs) can create quality jobs, generate high-value exports, and drive technological innovation. In contrast, many Arab countries still face a clear gap between their economic potential and their stated aspirations to build competitive industries, due to the absence of profound institutional reforms and a reluctance to create an environment conducive to this transformation.<\/span><\/p>\n

True development begins with building a supportive legislative and regulatory environment for small businesses, one that is not burdened by bureaucratic procedures or hampered by complex licensing and tax requirements, but rather empowers them to grow and expand. Small businesses need a legal framework that protects intellectual property and tiered financing systems ranging from microloans to venture capital and innovation funds. Financing becomes crucial when banks and financial institutions partner with the public sector through government guarantee mechanisms that enhance the creditworthiness of startups and allow them to operate with confidence in their early years.<\/span><\/p>\n

Technological infrastructure remains a crucial element in the future of small industries. A reliable digital infrastructure enables companies to transition to e-commerce, engage with global export platforms, and access markets inaccessible through traditional means. Furthermore, establishing business incubators and innovation accelerators across the Arab world, and linking them to regional incubators in Africa, Asia, and Europe, will create production networks that transcend borders, granting Arab small industries access to modern technologies and advanced management practices. This path also necessitates restructuring education and vocational training to integrate business management, marketing, manufacturing, and modern technology skills into the workforce, rather than leaving them as the domain of individual initiatives.<\/span><\/p>\n

Technical education becomes increasingly important when it is tasked with guiding the labor market as part of the productive structure of the economy. Small industries require skilled labor proficient in precision manufacturing, adept at absorbing new technologies, and able to move easily between different production lines. Therefore, linking technical education with the labor market becomes a strategic necessity, especially if this sector is restructured to become part of the regional manufacturing infrastructure. This link gains added value when coupled with the establishment of joint Arab industrial zones, the integration of value chains among the countries of the region, and the easing of customs and logistical barriers, enabling Arab products to move from the local market to global markets without obstacles that would compromise their competitiveness.<\/span><\/p>\n

The developmental impact extends when a unified Arab brand identity is built, one that carries a clear qualitative value. The existence of an \u201cArab-made\u201d label, with a shared vision and standards, can secure a new position for Arab products in international markets, especially if accompanied by well-considered free trade agreements with influential economic blocs and international industrial exhibitions that showcase small industries as part of a larger Arab economic project. This identity becomes even stronger when linked to local innovation and design, and to the ability of small industries to adapt to the demands of the global market rather than simply imitating imported models.<\/span><\/p>\n

From a broader perspective, small industries represent an opportunity for the Arab world to build a diversified and resilient economy. They are less vulnerable to major shocks, better able to absorb young workers, and more closely linked to innovation and technological growth. Furthermore, they form the basis for expanding the productive economic class, reducing social disparities, and transforming Arab economies from reliance on rentier income to real, exportable production.<\/span><\/p>\n

Looking ahead, it is clear that the success of the Arab world in building globally competitive small industries hinges on the readiness of its political and administrative systems to transition from a welfare state model to an enabling state model, and from a protectionist economy to a competitive one. When a clear political will emerges to restructure the legal and institutional environment, direct capital towards productive sectors, liberalize intra-regional trade, link education to the labor market, and build cross-border manufacturing networks, Arab small industries will have the potential to become a major component of the global economy.<\/span><\/p>\n

The core idea remains that small industries are not merely economic projects, but rather projects to empower the Arab region for a strategic transition to a value-generating economy. When the industrial project transforms into a comprehensive strategic vision that transcends individual government programs and reaches the consciousness of society and its productive forces\u2014a vision shared by the state, society, and the private sector\u2014the Arab region can enter a new phase where small industries become the nucleus of long-term economic growth and a pathway for the gradual relocation of added value within the Arab world, until the region has an influential voice within global value chains.<\/span><\/p>\n

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