Silicon Arabia: Can the MENA Region Become a Viable and Vibrant Hub for Start-Ups? (Part 1)

This Article is written by Shashi Menon who is a web/media entrepreneur, int’l management consultant and works within the strategy and business development at twofour54 (Abu Dhabi Media Zone), where he focuses primarily on identifying strategic business opportunities for twofour54. Recently, he was instrumental in the formation of Comedy Central Studios Arabia. Before joining twofour54, Shashi founded two successful startups in the U.S., the most recent of which was SaaS collaboration tool that was acquired in 2008. Shashi also worked for Oliver Wyman, consulting for a range of emerging markets clients, with a specific focus on telecom, media and technology.

This article is the first in a multi-part series about entrepreneurship in the MENA region.  In this series, I will posit that there are 4-5 key attributes for a sustainable and flourishing start-up ecosystem.

This is also my first post for InteractiveME – the first of many, ideally.  Feel free to offer any feedback.  I tweet at @shashimenon.

Over the past decade, a spotlight has been shined on the MENA region, due heavily to the rapid growth that arguably first took place in Dubai and is now playing out in other key markets in the region.  Such growth has been largely characterized by large, highly visible infrastructure projects: buildings, malls, and hotels, just to name a few.  Other projects got shelved along the way (as a tongue-in-cheek example, see The Onion’s recent satire on Dubai here).

But what about small businesses – start-ups?  Has any of this economic development really impacted regional entrepreneurs in any material way?  What’s missing to make the region a vibrant environment for entrepreneurship, something that has long been sought by regional leaders?  Is it actually possible to turn the MENA region into Silicon Valley, known the world over as the pinnacle of start-up activity?

There isn’t a lot of data about the number of start-ups in the Middle East, but it’s quite clear that there is a long way to go to make this a reality.  Around the region, a number of governments and organizations are trying to catalyze start-up activity by trying to address various barriers that they believe to be inhibitors of entrepreneurship.

In June of last year, a reporter for The National, Tom Gara, blogged about Jordan’s increasing start-up activity (here and here), calling Jordan “the most exciting community of technology start-ups in the region.”  While he acknowledged that comparisons to Silicon Valley are undoubtedly premature, Jordan is likely the closest equivalent to Silicon Valley that currently exists in the MENA region (though, in recent years, Lebanon is increasingly a hot spot).  And why is this?  Although Gara presented a number of different theories, one quote was particular salient: “The Jordanian government’s biggest contribution to entrepreneurs has been to ‘get out of the way,'” according to Emile Cubeisy, who runs a venture capital fund called IV Holdings.

Is this, in fact, the case?  Can the best action by governments be to step out of the way?  In the long run, I say yes.

In my view, a vibrant start-up ecosystem requires five key factors (in no particular order):

Infrastructure, both physical and regulatory
Talent (human capital)
Investment capital
Culture of adoption

Some of you might immediately think that there needs to be a market, but that is not necessarily the case – at least not in the traditional, domestic sense of the world.  Technology and globalization are changing the definition of “market” to extend far beyond any geographical boundaries.  Countries like India (e.g. software industry) are good examples of this.

The first four of the factors listed above are fairly clear, but it is the fifth — an inherent culture of adoption — that is the so-called “secret sauce” for Silicon Valley, and perhaps the single most unifying characteristic.

Some of these elements — though certainly not all, and in varying degrees — currently exist within the MENA region.  Can the rest of these factors fall into the place?  Yes, but with time and with a more organized and concerted effort from around the region.

In the coming weeks, I will explore this topic in more detail.

Comments are open.

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These posts have been added by guest contributors from different backgrounds with extensive knowledge and experience in their fields.


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  3. Gentlemen, thanks for the kind comments. I’m looking forward to posting the subsequent parts of this series and going into more depth about these topics.

    In my mind, the last three elements I described (investment capital, mentors, and culture of adoption) are the most in-need in the region. They are challenging to attain, but help to create a self-reinforcing cycle once they exist.

  4. I think Shashi has hit the nail on the head with this blog – I think more easily and readily available funding vehicles should be available and also promoted for bright ideas and bright entrepreneurs. Just referring to your mention of a market for entrepreneurialism, I also think that this is not the case, I think the good entrepreneur would identify the smallest market at his/her disposal, furthermore to be a great entrepreneur its about creating a market that was never really there in the first place, I think Nassim Taleb supports this notion in his book, Black Swan.

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