The second programme of Oman Manufacturing Strategy 2040 represents an important step towards building a more competitive, innovative and diversified industrial sector. It focuses on promoting entrepreneurship, encouraging start-ups, facilitating the establishment and growth of businesses, and strengthening the contribution of local enterprises to industrial development and economic diversification. The ambition to build a sustainable manufacturing sector goes beyond attracting investments and establishing factories. It also requires nurturing a new generation of entrepreneurs and developing Omani enterprises capable of innovating, producing, expanding and competing in regional and international markets.
The programme adopts a comprehensive approach to entrepreneurship development, recognising that businesses at different stages of development have different needs and require differentiated support services. Accordingly, it proposes establishing a three-tier system of entrepreneurship services. The first level focuses on open-access capacity-building programmes for anyone interested in starting a business, whether employed or unemployed. These programmes cover essential business skills, including financial management, cash-flow planning, marketing, export readiness and project management, providing aspiring entrepreneurs with the fundamental knowledge required to establish and manage sustainable businesses.
The second, intermediate level specifically targets holders of the Riyada Card. It aims to facilitate access to business opportunities, particularly through one-off government procurement projects and tendering opportunities, while supporting the establishment and expansion of medium-sized enterprises. The third and most advanced level focuses on developing enterprises with the capacity to undertake larger and longer-term government contracts. Through specialised support, these businesses can strengthen their operational capabilities, expand production capacity, invest in technology and become more competitive in the marketplace.
The programme also seeks to broaden participation in the entrepreneurial ecosystem by expanding access to support services for different segments of society, including Omani public-sector employees. This requires developing an appropriate regulatory framework to ensure transparency and prevent conflicts of interest, while enabling eligible public employees to benefit from entrepreneurship support initiatives and the Riyada Card scheme.
A particularly important dimension of the programme is its focus on industrial entrepreneurship. It proposes establishing a dedicated industrial business incubator to promote the creation and development of manufacturing enterprises in the priority sectors and activities identified under Oman Manufacturing Strategy 2040. This initiative reflects the importance of directing entrepreneurial activity towards productive industries, manufacturing, industrial components and value-added services. Such enterprises can contribute to strengthening domestic supply chains, reducing import dependency, increasing local value addition and enabling Omani businesses to participate more effectively in regional and global value chains.
In addition, the programme places emphasis on developing advanced mentorship and business guidance services. This includes establishing a national network of mentors, industry experts and experienced business leaders who can provide free advisory services to aspiring entrepreneurs and owners of promising projects. The objective is to improve the connection between business ideas and the expertise, networks and resources required to transform them into commercially viable enterprises. Advanced capacity-building programmes will also be linked to vocational education and training institutions in Oman, strengthening the connection between entrepreneurial capabilities, technical skills and the evolving needs of the manufacturing sector.
Another central pillar of the programme is improving the performance of the national innovation system, with a particular emphasis on stimulating innovation at the firm level. Rather than limiting innovation activities to universities and research institutions, the programme seeks to encourage companies and factories to become active participants in research, technological development and innovation. Among its proposed initiatives is the establishment of Manufacturing Innovation Factories across industrial areas, providing an enabling environment for practical experimentation, product development, process improvement and the adoption of advanced manufacturing technologies.
The programme also proposes introducing an innovation voucher mechanism, consisting of small grants that enable SMEs to purchase specialised technical, research and advisory services from universities, public research institutions and specialised research centres. This approach would strengthen collaboration between industry and academia while enabling smaller enterprises to access expertise and technologies that might otherwise be beyond their financial and technical capabilities.
To further encourage investment in research and development, the programme proposes developing fiscal incentives for manufacturing companies, including the introduction of R&D tax credits. In parallel, competitive grants would be made available to support businesses in developing new products and improving production processes in Oman. These measures aim to encourage private-sector investment in innovation, reduce the financial risks associated with technological development and strengthen cooperation between manufacturing companies, universities and research institutions.
Public procurement is another important instrument within the programme. It recognises that government procurement should not be viewed solely as a mechanism for purchasing goods and services, but also as a strategic policy tool for supporting local industries, promoting entrepreneurship and stimulating innovation. Accordingly, the programme proposes prioritising a selected group of strategic manufacturing SMEs through a long-term tendering programme. This would provide qualified Omani enterprises with more predictable business opportunities, enabling them to strengthen production capabilities, invest in equipment and technology, develop their workforce and gradually qualify for larger contracts.
To complement this initiative, the programme proposes providing project financing to participating enterprises and offering advanced capacity-building services to improve their technical and operational readiness. This integrated approach would help local businesses meet contractual requirements, improve productivity and establish themselves as reliable suppliers within domestic and international industrial supply chains.
Beyond supporting existing enterprises, public procurement can also be used to stimulate innovation. The programme therefore advocates adopting international best practices, including relevant OECD approaches, to integrate innovation objectives into public procurement policies. By embedding clear targets within national innovation policy, government demand can become a catalyst for the development and commercialisation of innovative products, technologies and industrial solutions by Omani companies.
Access to finance represents another critical component of the programme, particularly given the capital-intensive nature of manufacturing activities and the longer investment horizons often associated with industrial ventures. Traditional bank financing may not always be sufficient or suitable for innovative start-ups and emerging manufacturing enterprises. For this reason, the programme proposes introducing and developing venture capital financing mechanisms to support new manufacturing ventures.
These mechanisms include Government Venture Capital (GVC), through which government-financed equity investments can support promising businesses, and Corporate Venture Capital (CVC), whereby established companies invest equity in emerging enterprises with innovative technologies, products or industrial solutions. Such financing instruments can complement conventional lending and provide innovative manufacturing businesses with the patient capital required to develop, commercialise and scale their operations.
Ultimately, the second programme of Oman Manufacturing Strategy 2040 reflects a broader transformation in the approach to SME development and industrial policy. The objective is no longer simply to facilitate business registration, establish more companies or increase the number of SMEs. Rather, it is to develop productive, innovative and competitive enterprises with stronger technical, technological and managerial capabilities.
The programme seeks to strengthen the contribution of Omani enterprises to domestic value addition, develop local suppliers, create quality employment opportunities for Omani nationals and facilitate their integration into regional and global value chains.
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