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Bringing Balance To The Entrepreneurship Ecosystem In MENA On average, 80% of startup entrepreneurs fail on their first attempt, so it is imperative that the surrounding ecosystem supports them, rather than hinders them.

By Kathleen Bury

Opinions expressed by Entrepreneur contributors are their own.

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The entrepreneurship ecosystem is just like any natural ecosystem- it is balanced only when all of its components are in harmony. However, if one component expands at the expense of another, then the ecosystem becomes in danger of losing that vital harmony, and is no longer capable of maintaining healthy growth or indeed truly serving those that it is intending to serve.

In order for entrepreneurs to have the best chances to grow, they need a well-balanced ecosystem. This goes beyond financial support and solid infrastructure such as Internet, regulatory policies etc. Entrepreneurs need to be nurtured within a balanced entrepreneurship ecosystem that places equal importance on the development of their core human capacity and the strengthening of their leadership capabilities as well as the other areas. This will, in turn, ensure that entrepreneurs can truly live up to their potential to not only grow their business and create jobs within their community, but also develop themselves as capable leaders and empowered individuals who will go on to create a lasting impact within their community.

At this point, we need to stop and ask: is it sensible to provide financial capital to would-be entrepreneurs, who do not have the required entrepreneurial capabilities or core spirit? On average, 80% of startup entrepreneurs fail on their first attempt, so it is imperative that the surrounding ecosystem supports them, rather than hinders them. This means that entrepreneurial support activities should focus on developing, with equal levels of investment, the four key pillars of the ecosystem:

  1. Environment: parenting, primary, secondary and tertiary education
  2. Infrastructure: laws and regulation, Internet and an open market
  3. Financial capital: angel investing, working and equity capital and fair investment
  4. Human capital: mentoring, skills development and leadership

Currently, the human capital part of the ecosystem is not receiving enough investment, and as a result, the imbalance in the ecosystem is not the ideal situation for entrepreneurs to grow in a sustainable manner. It is the entrepreneurs of today who need all of the support to create the jobs that are required to meet current market demands, as opposed to those who are still growing up through the education system and able to take advantage of changes being made within the ecosystem.

Related: How To Keep Your Entrepreneurial Dream Alive In The Arab World

In order to shed light on this critical subject, we recently published a report, Nurturing Human Capital: The Missing Piece of MENA's Entrepreneurship Puzzle, which analyzes the current situation of the entrepreneurship ecosystem across the region, and shares insights into what is needed to enable and empower entrepreneurs to grow sustainable businesses, drive economic growth and strengthen their leadership capabilities.

From our findings, we were able to conclude the following key points on the region's entrepreneurship ecosystem:

1. Development of human capacity is the "key" to achieving substantially enhanced Return on Entrepreneurial Investment (ROEI) ROEI will only be maximized if human capacity development is a critical component of building entrepreneurship and leadership.

2. Entrepreneurs need a balanced ecosystem of support A balanced entrepreneurial ecosystem across all of its pillars, with equal investment between financial and human capital, is needed to truly support an entrepreneur to achieve growth.

3. Entrepreneurs are created through nurture Truly successful entrepreneurs are created through nurture, through the development of their own core human and leadership capacity and capability. To achieve this, they need solid and empowering support throughout this journey.

4. Mentoring provides entrepreneurs with true nurturing Mentoring is "key" within human capacity development for today's entrepreneurs to deliver the much needed economic growth and leadership required, especially as the environment within MENA has not been conducive to nurturing entrepreneurs to date.

5. Holistic and trained mentoring matters for entrepreneurs if we want them to succeed For truly effective nurturing to take place, mentoring needs to be holistic (focused on personal and business): entrepreneurs need to be mentored by trained mentors, and the initial phase of the mentoring relationships need close support, so that the foundations are set for their future development and longevity of relationship.

We believe that it is five to 10 times more difficult to succeed as an entrepreneur in the Middle East than in either Europe or the US. In addition to all of the business challenges entrepreneurs have to deal with, they struggle with loneliness and a lack of confidence in their own ability to succeed. Their nervousness of risk-taking and failure and its implications on them and their families, in addition to the inability to achieve a healthy work-life balance, only makes things all the more difficult.

Related: The Middle East Is Ripe For Technology Entrepreneurship

When considering all of these issues, if we are unable to reach into the soul of the entrepreneur to motivate them, give them confidence and empower them to take on the numerous challenges, overcome the many regional barriers and fight the normal storms of entrepreneurship, specifically through mentoring, the investment made in all other areas of the entrepreneurial ecosystem, particularly financial capital, will not produce a favorable and/or optimized return.

Investing in human capital is just one piece of the entrepreneurial ecosystem puzzle, and has to date not been a key focus area in the region. We believe that it is the foundation upon which all the other components can be optimized and where the greatest return on entrepreneurial investment can be made.

Entrepreneurs are created through nurture, not just by nature. The power of empowered and capable entrepreneurs who have the necessary leadership skills should not be underestimated. Their impact goes beyond job creation and economic growth. They will also be the driving force behind social development and act as role models for many future generations to emulate.

Related: The MENA Startup Ecosystem: Problems And (Potential) Solutions

Kathleen Bury

Chief Executive Officer, Mowgli Foundation

Kathleen Bury is the Mowgli Foundation’s Chief Executive Officer and holds a BA Hons degree in Business and Quality Management from the Nottingham Trent Business School, UK.  With a strong background in several industries, her 13 years of experience includes management consulting, market analysis, energy, entrepreneurship, communications/marketing, knowledge management, process design, event management and writing. Having worked predominantly within startup organizations and teams, Kathleen has a robust understanding of the SME sector and the challenges that entrepreneurs and SMEs face today when setting up and growing their businesses, as well as the need and benefit of mentoring.
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