Tuesday, 6 September 2022


The Middle East — the next enterprise powerhouse?

By Ali Taqi

A question I’m often asked is, “What does it take to start and build a successful business?”

Much is clearly linked to the personalities and abilities of individual entrepreneurs — attributes of confidence, resilience, communication skills, and an eye for numbers and marketing opportunities are regularly cited as key to success.

But the characteristics of the geographical environments and ecosystems that allow enterprise to flourish are also vital.

The United States and the United Kingdom, where I spent some of my career, are well-known for the social and economic conditions that provide a hospitable ecosystem for people starting a business.

My native Middle East has not always been viewed as a hub of dynamic, self-starting enterprise. The region’s global leadership in energy production may help explain that perception — such a strategically important industry may inevitably overshadow other economic activity.

Yet figures from StartupBlink, the global startup ecosystem map and research center, shows our region has 57 startup ecosystems in its index of the top 1k cities for start-ups. In the global country rankings, the UAE, Saudi Arabia, Egypt, Kuwait, Bahrain and Qatar all ranked in the top 100 this year.

This data suggests it may be time to reassess which regions, countries and cities can (and will) provide the most fertile ground to grow and scale a business. The Middle East has clear pedigree as an enterprise hub: This region, at the crossroads of East and West, has been a focus of global trade for millennia. Today’s entrepreneurs in modern Manama, Doha, Dubai, Riyadh and Cairo walk in the footsteps of entrepreneurial forebears who did business over centuries at the souks and ports across North Africa, the Arabian Gulf, the Levant, Turkey and beyond.

Our region’s current stock exchange boom, with initial public offerings soaring in Gulf markets, is fueled by global investors who see MENAT’s huge potential. The Middle East is home to some of the world’s most ambitious economic transformation agendas, accelerating diversification policies that promote new industries and investments — just as economic uncertainty is rising elsewhere in the world.

The optimism is clearly felt by the venture capital community: Our region saw its highest ever level of venture capital funding last year, with USD 2.6 bn flowing into the Middle East and North Africa region in 155 transactions.

Earlier this year, a Dubai Chamber of Digital Economy report showed that the regional financial center accounts for 57% of regional scale-up funding, reinforcing its position as a tech hub. The scale-up news is good region-wide, having collectively attracted USD 9.1 bn, the report says.

Starting a business is one thing, but scaling it is the next challenge — and the UAE, Saudi Arabia and Egypt are all popular destinations for scale-up relocations. Check out our advice on what scaling successfully looks like, published this summer.

Here in Egypt, I’m confident that recent successes will inspire the next generation of entrepreneurs. We’ve supported new businesses in emerging industries, particularly in the renewable energy space, such as KarmSolar as it has grown into a thriving business with over 600 clients — and an ambition to make renewables the main source of electricity across the Arab world. We’ve also partnered with Nile University and the Central Bank of Egypt, under the Nilepreneurs program, which has seen 12 start-ups, across a range of sectors, graduate from the program since 2019.

For me, enterprise is the essence of human development, underpinning social, economic and environmental progress. When encouraged to thrive, and properly supported, entrepreneurs create solutions to societal problems, empowering people to grow individually and as part of their community. Society needs the entrepreneurs of today to innovate to face the challenges of tomorrow.

I’m pleased to have walked the entrepreneur’s journey alongside so many clients, and I look forward to supporting the next generation of ambitious, internationally-minded business leaders on the road ahead.

Ali Taqi (LinkedIn) is head of commercial banking at HSBC Egypt.

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