U.A.E. has long served as a magnet for entrepreneurs throughout the region who are looking to start or scale businesses. The Global Entrepreneurship and Development Institute’s 2016 “Global Entrepreneurship Index” ranks U.A.E. ahead of every other country in the region.
Entrepreneurship is now becoming a significant growing element in the Middle East. However, the recent growth of startups in the Middle East and North Africa is extraordinary. As a result, it continues to gain momentum amidst the economic and political challenges besetting the region. There is no doubt that the unprecedented growth of telecommunications, information and communications technology worldwide plays an important role in clearly shaping the future directions of this generation’s entrepreneurs and future business leaders.
Growth of Startups
Today, Startups are shaping a new economic landscape across the MENA region based on a culmination of several factors. For instance, technology, innovation and demand for new ways for businesses to engage amongst the consumers. Enterprises now are leveraging technology to make their operations easier, faster and offering innovative services that improve people’s daily lifestyles.
Entrepreneurs – when enabled to generate businesses – can create jobs, sustain innovation and contribute to wealth growth. Governments recognize the strong potential of entrepreneurship, therefore they increasingly invest and prioritize the needs of entrepreneurs through programs and partnerships within the private sectors. Establishing support for entrepreneurs in forms of investments like angel investing, growth equity capital-models, and government-backed lending within certain countries. In the GCC region, countries like Saudi Arabia and UAE are proactively allocating funds for SMEs to catalyze economic activity.
Data from the World Economic Forum (WEF) reveals that the Middle East and North Africa (MENA) region will need to create 75 million jobs by 2020 – 40 percent more from what it has created in 2011. All sectors of society have agreed that entrepreneurship is an important solution to the needs of the Arab Youth.
According to WEF reports, 13 percent of the MENA region’s working population engaged in entrepreneurial activity. Which is far more than in the US, Germany or Japan – but not at the same level of entrepreneurship. Also, reflecting robust economic activity as most entrepreneurs were involved in meeting basic needs such as food, shelter and security.
A Rise in the Technological Sector
The increasing accessibility to digital technology prompts the growth of many tech startups in the region. These are run mostly by a generation of entrepreneurs that are well-versed in this sector. Young people want to make a change – and they want it fast. Startups vary in form and intention. Due to the high accessibility of technology, startups concentrate on many activities in this sector. With the ever-increasing ubiquity of technology, it is not surprising that many MENA startups anchor their business on what they know best – digital technology – making it among the most popular in the region. One of the world’s biggest technology events, GITEX, which takes place annually in Dubai, featured the GITEX Global Startup Movement for the first time in 2016 which attracted more than 400 technology startups from 60 countries that showcased their projects.
UAE is leading the region as a tech startup hub with a multitude of incubators supporting startups in the country. Data analyst firm CB Insights reported that UAE-based technology startups have raised approximately USD 2.3 billion in 2016.
While there are hundreds of those whose time not yet arrived, there are several MENA startups that remain inspirations, having successfully launched and continue to receive support from investors. Many of these successful startups have capitalized on the e-commerce boom, providing products and services through the internet. In addition, they offer a range of services that include recruitment, retail, fashion, property, news, transport, and others.
There is no doubt that technology is a key factor in the success of most of these entrepreneurs. As a result, the sector remains the most attractive and with the most number of startups. There is no other place to witness the vibrancy of the Arab youths than in the offices, startup hubs and conferences that gather the young entrepreneurs looking to one day make a big mark in the business world. SMEs are not a new phenomenon in the Arab region. They, in fact, form the main sector helping many economies thrive in the face of an ongoing global economic slowdown. However, it is remarkable to see the new round of success in Arab entrepreneurship surrounding technology as internet penetration and mobile usage continue to expand in many areas.