Business incubators have proved to be effective tools for tackling unemployment.
diversifying economies and creating wealth in numerous developed countries. By providing
timely help and support to new ventures, business incubators hold the potential to create and
develop entrepreneurial talent at the micro level and foster an environment for
entrepreneurship at the macro level. Business incubation programmes represent a popular
approach that many countries have used to assist new business start-ups. Saudi Arabia has
struggled with unfavourable demographic tendencies with a dynamic population growth and
registers a high level of unemployment, notably among students (33% of graduates) and lowskilled
manpower. Also, the local economy, that has long been dependent upon the traditional
"transformation industries" needs to be diversified and modernised in order to face the evergrowing
fierce international and regional competition. Small and Medium Enterprises (SMEs)
constitute the majority of the Saudi business (in terms of the number of firms), yet a minority
in terms of revenue. SMEs and enterprising university graduates are believed to be the motors
of developing economies. A business incubation programme in theory is fit in dealing with
obstacles facing SMEs and young entrepreneurs.