This month, the World Economic Forum (WEF) and the Forum of Young Global Leaders (YGL), in collaboration with Booz & Company, launched the Accelerating Entrepreneurship in the Arab World report, which highlights ten recommendations to promote a vibrant entrepreneurial ecosystem across the region.
Policy-makers, business leaders, academia and civil society leaders are all aiming to match the enthusiasm felt around the region with a clear plan for job creation. The report contains interviews with 20 Young Global Leaders from around the globe and several case studies featuring Young Global Leaders and other entrepreneurial successes.
The ten recommendations are:
- Offer a helping hand. Established entrepreneurs should give time, advice and seed funding to aspiring entrepreneurs.
- Change behaviours and evolve the culture. Discuss entrepreneurship every day and generate hype around a handful of success stories.
- Bring entrepreneurship to the classroom. Everyone in high school and university should learn entrepreneurial principles.
- Bring entrepreneurship to the office. Companies should encourage employees to unleash their own talent.
- Do not imitate Silicon Valley. Identify and leverage your country’s own unique resources.
- Welcome new ideas. Engage domestic and foreign workers to encourage a free flow of expertise and enterprise.
- Break the stereotype. Great entrepreneurial ideas can come from anyone in any industry.
- Embrace the diaspora. Tap successful entrepreneurs living abroad for their advice and connections.
- Eliminate red tape. Governments should give many kinds of support to all types of entrepreneurs.
- Expand the venture capital (VC) model. VCs need to go beyond funding and provide a support structure for entrepreneurs.
- Lifestyle or passion: Entrepreneurs who are motivated in this way create businesses in fields where they have a particular interest, talent or knowledge. They may combine a hobby with a profession and may choose not to expand the business in order to remain in control.
- Social good: These individuals are motivated by a social problem and use entrepreneurial principles to create, organize and manage a venture that will bring about socio-economic change for a particular group. Rather than measure their success by revenue and profits, these entrepreneurs typically equate success with social impact.
- Fame and fortune: These entrepreneurs aim big and are driven strongly by the profit motive. They want to grow their businesses, dominate their industries and be acknowledged for their success.
In addition, there are three external forces or circumstances that drive entrepreneurship (p. 8):
- Innovation: Some entrepreneurs create new demand by nourishing an innovative idea they have conceived or acquired; they build a new business by combining know-how and capital.
- Opportunity: Entrepreneurs who recognize a demand/supply gap in the market, an unmet need or an opportunity for change can seize that opportunity. In doing so, they create value for themselves and society.
- Necessity: Entrepreneurs in this category have been forced by their environment to seek self-sufficiency and satisfy their basic needs of food, shelter and security.
“A key to accelerating job creation in the MENA region is fostering an entrepreneurial environment. Not only do start-ups employ their owners, but the spillover benefits for the larger economy can be significant: multiple sources of innovation; increased competition; efficiency and productivity; economic flexibility and adaptation; job creation; supply chain development; seedbeds for future growth; and the inclusion of more elements of society. Indeed, once start-ups mature into small and medium-sized enterprises (SMEs), they become significant contributors to employment and gross domestic product (GDP)” (p. 7).
Particular attention is given to understanding the entrepreneurial ecosystem. This is illustrated using four concentric circles describes a “enablers”. I hope the diagram used to describe this and assess this in the region, below, is clear enough.
The four circles, or elements of the ecosystem, are:
- Personal Enablers: these affect the entrepreneur’s individual development. These enablers allow the entrepreneur to gain the necessary knowledge, expertise and know-how to create and run a business, while also offering support and helping entrepreneurs to build their confidence.
- Financial Enablers: the financiers who commit their money so the entrepreneur can create or grow the business.
- Business Enablers: the professional enablers that provide critical professional and technical support.
- Environment Enablers: a diverse group of environment enablers, including the regulatory framework, infrastructure, lobbying organizations, prevailing culture and media.
This is a relevant and engaging report. Well worth the read for anyone working in the MENA region or for anyone interested in creating places for entrepreneurship and innovation.