Despite Setbacks, A Bright Future Ahead For Startups And SMEs In The Middle East, Says London Business School Survey
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The London Business School has released the data and results of a survey it conducted about entrepreneurship and SMEs in the Middle East. The survey, whose results were published in December last year, was conducted with 500 members of the London Business School community, which included alumni, executive MBAs, and members of the school’s Middle East Club. While the survey’s participants’ were from a variety of nationalities, it’s worth mentioning that 33% of them originate from Saudi Arabia, and 25% from the UAE, which together make up 58% of the participants. It’s also worth noting that 89.2% of the survey’s participants identified themselves as being male.
The vote of confidence is high. Entrepreneurship is growing in the Middle East.
Most of the survey’s participants showed confidence at the growth rate of the region’s entrepreneurial ecosystem. 37.7% described growth as “fast” and 30.2% described it as “steady”- that said, 24.6% believe that entrepreneurship is growing at a “slow” rate. Of course, it’s important to take into consideration the diversity of economies in the region. In the UAE, Qatar, and Saudi Arabia, we’ve seen long-term and aggressive initiatives to improve tech infrastructure and other conditions that will increase entrepreneurship. That may not be the case in countries such as Egypt and Jordan, whose entrepreneurs often cite infrastructural blockades to innovation.
To ‘trep or not to ‘trep? That is the question.
When asked about their “appetite” for entrepreneurship, almost half (45.4%) of the respondents said that they have considered setting up their own business, but haven’t pursued it just yet. Is it a matter of confidence or comfort? While 23.1% of the respondents claimed to have already set up at least one business, 45.6% are rather confident of starting up their own enterprises soon, and 26.9% aren’t. All in all, it’s safe to say that most people are just waiting for the right time- maybe they’re trying to garner resources, or looking for the right partner.
SMEs are overcoming a “less than supportive” environment.
The survey’s participants were asked to judge the current situation for SMEs, and 56.3% say that there is certainly room for improvement, primarily in the realm of getting more “support.” While only 10.4% believe that SMEs have been doing poorly, the remaining third of participants believe that SMEs are doing well. Half of that third believes that SMEs are managing to do well in a “less than supportive” environment. While more entrepreneurial ecosystems in the GCC are becoming more SME-friendly, some SMEs in other countries are struggling to reach their full potential. It’s another case of flourishing economics being able to provide more for their entrepreneurial ecosystem than others. That being said, whether you’re in the UAE or in Egypt, there is always more than can be done to give SMEs a lift.
More guardian angels –a.k.a. investors- are needed.
Given that there’s more that can be done for the Middle East’s entrepreneurial ecosystem, what are some of the ways do just that? When asked to rank certain measures that could be taken as areas needing improvement, the highest average went to the need for more “private” or angel investors. That said, most of the other measures weren’t far behind, including “more new business incubators,” and “more government funding,” in addition to “private sector mentors/guidance.” However, “fostering female entrepreneurship” was at the bottom of the list- but that might not be surprising, given that almost 90% of the survey’s participants are male.
F&B and tech is where it’s at.
Which sector appears to be the most promising in the Middle East? The majority (36.5%) claims it’s F&B, and 29.8% say IT and tech. Travel and tourism, hospitality, marketing and media all fall below 10%. Whether it’s the GCC, the Levant, or North Africa, there always have been many F&B ventures. We’ve noticed some external efforts to take them to a new level, but not as much as tech. In the GCC, we’ve seen Qatar, Saudi Arabia, and the UAE heavily prioritize creating spaces and conditions worthy of a flourishing tech industry. In Lebanon, we’ve seen the emergence of the UK Lebanon Tech Hub, and a similar initiative that the French ambassador announced at the second edition of BDL Accelerate last December.