In Europe and the United States, tech entrepreneurs usually don’t have too much trouble getting their hands on hardware. But for Ayman Arandi, who runs a start-up in the West Bank, importing even simple electronic components is an uphill battle.
The experience of entrepreneurs like Arandi is highlighted in a new report from the World Bank Group and the World Economic Forum. The Arab World Competitiveness Report finds that start-ups in the Middle East and North Africa (MENA) face a host of often-debilitating hurdles.
Many struggle to get essential equipment, break into new markets, and secure business licenses. On a societal level, those obstacles act like a brake on economic growth, the report says. By making it easier for entrepreneurs to get their businesses off the ground, MENA governments could create jobs, spark innovation, and fight poverty, the report concludes.
The competitiveness report comes as many Arab countries are looking for ways to tackle unemployment and jump-start their economies. Twenty-seven percent of young people in the region are unemployed and with MENA's population expected to double to 700 million by the end of the century, job creation will be crucial, the study says.
Although challenges remain, the study notes some improvements in the economic environment affecting entrepreneurship. Governments, especially in the Gulf Co-operation Council, have launched efforts to provide crucial seed funding to start-ups. That includes Saudi Arabia, which created a $1 billion fund to invest in small and medium enterprises. Bahrain and Oman have both launched $100 million-plus initiatives to support start-ups, and Lebanon aims to inject as much as $600 million into innovative firms.
To keep that momentum going, the report recommends that governments continue to support small and medium enterprises (SMEs), which create four out of every five new jobs in emerging markets. It urges governments to encourage innovation, improve Internet infrastructure, pass laws that make it easier for SMEs to access loans, and invest in education especially in up-and-coming fields such as information technology.
It could also help heal some of MENA’s wounds. More than 10,000 adults and children in the West Bank and Gaza now use Ayman Arandi’s sensory rooms, which have been a lifeline for many in an enclave with a history of violence. “When you see the result in the kids, that’s the best thing ever,” Benhassine says. “That’s the biggest motivation right there.”