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ENTREPRENEURSHIP Opinion: Startup Rising

The Gulf

It should be no surprise that the Middle East is now home to a thriving community of entrepreneurs helping drive economic growth

A JOURNALIST recently asked me how I could still believe in tech-based entrepreneurship in the Middle East today. In the midst of the terrible news of late in Egypt and over two years in Syria, it is hardly an idle question.

It was hardly the first time I have been asked. Right after the attacks on the US consulate and embassy in Benghazi and Cairo I received similar calls. During one of the mass rallies in Cairo last December an editor wanted to pull a piece I was working on about the rise of accelerators there.

The attacks, of course, were horrible and when I asked how many had tried to seize the consulate and embassy, the reporter noted two or three hundred. He was stunned when I noted that four months earlier I was in Beirut judging the MIT Arab Enterprise startup competition. Over 5,000 companies from North Africa to Yemen, representing over 14,000 entrepreneurs - nearly 40 per cent women - pitched amazing ideas. The editor was equally shocked when I told her about my friend who was in a different “demonstration” in Cairo that December. He was among several thousand attending the TEDX Cairo summit - a spin-off of the famous Long Beach, California gathering which attracts some of the greatest innovators around the globe - with over 50,000 watching the conference streams live around Egypt.

The numbers are, however, beyond anecdotal. According to a Booz & Co/Google study last year, while the region lags others in internet penetration, the number of internet users in Arab countries has been growing faster (23 per cent annually versus a global 14 per cent), and is expected to exceed 140 million next year. As mobile penetration exceeds 100 per cent in almost every country, and smart phone reach is expected to break 50 per cent within three years, online access will accelerate.

Those who are online tell a remarkable story of change over the last five years, with clear ramifications for the future. Eighty-three per cent use the internet daily, and half of those for at least five hours a day. Unsurprisingly, over 40 per cent would like to start their own businesses.

So why believe in tech-based entrepreneurship in the Middle East?

Because it is here as it is revolutionising every corner of the globe; it is at scale; and it solves problems traditional institutions have not come close to doing alone.

I cannot tell you what will happen tomorrow or in six months in the Middle East, but within the next decade there will be a lot more technology in the hands of a lot more people. Broadband access and smart phones are not merely better phones and entertainment devices, but super computers in the hands of millions. This means millions of people having at their fingertips, and essentially for free, most of the world’s collective knowledge. This means millions having the ability to affordably connect, share, collaborate and reach markets unthinkable less than a decade ago.

Today’s courageous entrepreneurs in the Middle East are a great lens into what can come from all this. I am regularly pitched remarkable tech-enabled capabilities to supplement education/tutoring online; innovative mobile payment solutions; apps to help monitor crucial health issues; apps to crowd-share information to navigate traffic and to crowd-fund ideas. Even small, traditional merchants and craftsmen are accessing larger customers online. And I see big ideas in mobile technology, alternative energy, around natural resources (like desalination) that may change the world.

That we will live in parallel universes in the Middle East as in other emerging growth markets - perhaps all markets - should come as little surprise. From my vantage point, we are all in the throes of enormous transition: 20th century, top-down command and control policies that too often favour too few, versus 21st century, bottom-up problem solving and innovation that technology has enabled at an unprecedented level.

It is remarkable to me, then, how many traditional government and business institutions don’t understand the opportunity under their noses. Some of it is generational - if one was raised in an era where constrained capital favoured a select few, it is easy to look at any change as a zero sum game. And the risk of startup companies failing - in fact, more companies than succeed - is a reality no one loves. 

But these are new days, with new challenges and new tools and a new generation eager to take them on. But it is also the most mobile generation in the region’s history. Ecosystems matter, and should leaders proactively embrace this new generation something remarkable will be unleashed. If they ignore it, or pay it lip service, their best will move where they can succeed.

Christopher M Schroeder is a US-based internet entrepreneur and venture investor. His new book, Startup Rising: The Entrepreneurial Revolution Remaking the Middle East is the first to document the rise of tech startups in the Arab world, and came out last month.

Originally published in The Gulf on September 3, 2013.

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