This is a guest post by Mehrunisa Qayyum, a consultant on the Middle East / North Africa region, founder of PitaPolicy and Huffington Post Blogger.
“Here’s a mobile app that rates the restaurant/bar/club based on the how many attractive women are there,” explained an Arab Net Summit attendee to me in a Hamraa neighborhood hotspot of Beirut. I had to contain myself. Here I was in Lebanon, attending the Arab Net conference, and trying to challenge another blogger’s belief that innovation in Arab countries is limited to localizing the application of existing startups. Clones, in other words. And the conversation had shifted from “who’s hot” rather than “what’s hot”.
In any case, those arguing that the Arab region can’t innovate may have a case, if you believe the reports that is. A 55 country study reviewing technology & innovation released in early March by the Kauffman Foundation of Entrepreneurship did not mention a single Arab country. Only two came from the MENA region: Turkey and Israel.
But let’s put the non-Arab countries in MENA to the side for a moment. Instead, let’s refocus on reviewing the three factors that jumpstart technology entrepreneurship and innovation: 1) talent; 2) people networks, and 3) funding.
Factors #1 & #2: Talent and People
Talent and great people networks exist in many MENA countries, as was evidenced by the debate by Arab Technology CEOs speaking at the Arab Net Conference. Indeed, Arab Net is a real-life example of this. Arab Net Summit, founded by Omar Christidis, holds technology entrepreneur competitions on both the individual and business level. For example, Qordoba’s online program to create Arabic content online, beat nine other startups–each representing different interests ranging from online gaming to educational missions.
From March 27th to 31st, I met with CEOs and business managers from Lebanon, Saudi Arabia, Egypt and the US – many of whom argued that many Western countries overlook innovation here. Those who criticize the state of innovation in the broader Middle East & North Africa (MENA) region tend to label the technology developments they see as ‘local imitations’. On the downside, the term ‘imitation’ might downplay an opportunity for non-Arabs to invest in the Arabian technology sector.
But, there is an upside: localizing the applications can be a good ‘first step’ business. Good or bad, as Rabea Ataya, CEO of Bayt.com, tells me, “this is the first step towards developing innovative technologies that may be exported globally.” So, the clones may be first, but the innovation tech companies should follow.
Factor #3: Funding
Funding for tech startups is also available in many Arab countries, but linking that with the networks of people presents the biggest challenge.
Take the example of Osama Natto, who is the Founder of Innovative Business Solutions. As a Saudi national, he has made it his business to identify technology innovators and link them to financial capital.
In addition, Arab governments can sometimes easily step in with simple measures. Natto says the Saudi Kingdom has budgeted for “technology cities” where the “Bader” initiative meets with King Abdullah University of Science & Technology and provides seed funding to startups.
Ataya, who represents the hundreds in his generation that traveled abroad for university education, says that the mass exodus for better educational opportunities is no longer necessary. Human capital, coupled with intellectual capital is no longer a challenge in countries like Lebanon, Jordan or Egypt. An oil poor, but people rich country, like Jordan, retains its talent by setting up local technology training facilities. Jordan’s Faculty of Engineering & Technology Training Office is a prime example of a public-private partnership in the tech sector. As a result, Jordan’s public-private partnership plan combines two of our three factors: talent and people networks.
What comes after the clones?
It’s true that there will be plenty of clones in the next few years. But what happens after that? It’s still hard to pinpoint the magic number of startups that need to exist in Arab countries that allow it to become seen as more like the “Silicon Valley” of MENA. Each country varies by population size, local investment trajectory and government regulation. But as George ElKhabbaz, Head of Digital Planning at Born Interactive (Lebanon), Ziad Matar Head of Middle East & Central Asia at Qualcomm (UAE), and Rabea Ataya (Lebanon) argue: we are already there in Lebanon. In fact, Ossama Natto believes that Saudi Arabia is positioning itself to take the lead in facilitating innovation by developing technology clusters.
“They’re not comfortable because they don’t understand the (technology) industry,” says El Khabaz. He shared a local example of how a small Arab based company had to go abroad to grow. Foreign direct investment is government driven. Woopra is a company that developed analytics that had to move to the United States because they could not obtain funding locally in Lebanon.
Israel presents a model where public-private partnerships between governments and business succeed in the technology sector. Israel views technology advances as a national interest. However, Arab governments do not engage the technology sector in this way. As El Khabaz says about Lebanon, “our government should look at this as a primary model.” Look at Israel’s telecommunications sector and defense – they collaborate.
A country with less financial resources, like Jordan, is trying out the public-private partnership model to invest in its local talent. Jordan’s Ministry of Information and Communication Technology (MoICT) implemented a partnership between MoICT and UNESCO Cairo (UCO) to train Jordanian government employees. Who knows? Maybe with additional training, Jordanian government employees will gain the confidence to develop an idea and risk into a private venture? Unfortunately it’s too early to tell.
That might explain why there were many Jordanian tech entrepreneurs competing for startup prizes. In fact, Amman, Jordan ranks in the top 10 cities of the world to launch a tech startup, according to Finaventures.
El Khabaz says” “If Arab and other MENA governments could just give even 10 percent financing,” then this would signal to local private investors to financially support Arab innovation. The 10 percent financing also sends a signal to the small to medium enterprises, which have become a key focus in development plans post Arab uprisings.
But back to the hot app story. The designer I was chatting to may well do ok with his find the “hottest people” app. The question is, where’s the sustainability going to come from Arab innovators?
The answer is that where there is talent, there is innovation. And Arabia has plenty of talent.